Refrigerator Replacement Programs in Brazil

Abstract
Brazil’s Electric utilities have invested about 80 million dollars annually in low-income energy
efficiency programs, about half of their compulsory investments in end-use programs under current
regulation. Since 2007 the regulator has enforced the need to provide evaluation plans for the
programs delivered. In this context this paper presents an assessment of refrigerator replacement
programs for low-income households that have been introduced in the Brazilian urban and peri-urban
slums. Several reasons contribute to make refrigerators attractive appliances for such programs: (a)
high share of the residential energy consumption, specially in the Northeast and North regions; (b)
high appliance penetration among low-income households; (c) most of low-income households own
refrigerators more than 10 years old; d) the energy consumption should be higher in such households
due to the precarious electrical installations and consequently inadequate energy quality and voltage
provision, then reducing the performance of the appliance. Firstly the paper introduces an overview
about refrigerator replacement programs in Brazil. The characteristics of the low income population
and refrigerator stock in use are presented. A case study of refrigerator replacement program is
presented at the end.

1. Introduction
More recently, following the example of many countries, Brazil has created mechanisms to finance
public interest activities during the restructuring of its power sector [1] [2], guaranteeing funds to invest
in energy efficiency, energy research and development (CTEnerg). Electricity distribution companies
are obliged to invest part of their annual revenues in energy efficiency program under the regulator’s
supervision (Table 1). Since 1998 part of these funds have been used by the distribution companies
to invest in energy efficiency programs for low-income consumers. During the period 2005/06 almost
61% of the utilities investments in compulsory energy efficiency were dedicated to low-income
programs [3].

Table 1 presents the current allocations of Brazilian utilities’ compulsory investments in energy
efficiency and R&D programs. The total annual investments in energy efficiency programs is about R$
300 millions [3]. Only Distribution utilities are required to invest in efficiency programs: amounting to
0.5% of their annual revenues. Public interest energy efficiency programs can be funded by the
CTEnerg fund.

Table 1: Allocation of the 1% electricity revenues in Energy Efficiency and Energy R&D
programs by the type of utility in Brazil (Law 9.991/00)

Notes: CTEnerg is the public interest energy fund; ANEEL is the Brazilian Electricity Regulatory
Agency, MME is the Ministry of Mines and Energy.

The present paper is structured as follows: firstly, a brief analysis is made of the Brazilian experience
with energy efficiency programs of refrigerator replacement. Secondly the context of low-income
population and refrigerator stock characteristics is described. Third results of a case study are
presented and finally the findings of the present paper are shown.

National Experience

The domestic experience in Brazil on implementing energy efficiency programs for low income
consumers is not so recent. It has been practiced for some time with different objectives by some
utilities, especially through residential lighting programs whose objective is to substitute incandescent
bulbs with compact fluorescent lamps. Such experiences have started in the early nineties by the
utilities CPFL and CEMIG (Electricity Utilities located in the southeast part of the country), followed by
CESP [4] and afterwards by other utilities through the National Electricity Conservation Program
(PROCEL). It is worth mentioning the lighting program experiences for low-income households by
CEMIG in the Vale do Jequitinhonha in 1995 and by COELCE (Electricity Utility placed in the state of
Ceará) in the city of Fortaleza in 1997.

Since then, there is reasonable knowledge on different schemes and strategies to implement energy-
efficient lighting programs, ranging from donation-based programs to more sophisticated mechanisms
of commercialization, such as through rebates, financing or discount prices.

The experience of COELCE including those focused on the low-income population, of using rebates
through the local retail market seem to be a feasible implementing strategy, even though difficulties
were faced in that period related to the product novelty and lack of preparedness by the retail market
sector for this kind of campaign. One of the advantages of seeking the involvement of the local
commerce in energy efficiency programs is the higher assurance of promoting a gradual market
transformation for energy-efficient lighting equipment.

Studies carried out by several utilities in Brazil indicate a significant waste of electricity in low income
households due to inadequate electricity use, caused by the lack of information about its rational use,
precarious electrical installation, use of refrigerators which are in bad condition and buildings without
ventilation and natural lighting [5].

Field surveys carried out by COELBA (a utility from State of Bahia in Northeast Brazil) show that
refrigerators represent until 70% of total low-income household’s electricity consumption whereas
lighting accounts for 20% [6].

Table 2 summarize some results of refrigerator replacement programs for five electricity Brazilian
utilities. The energy savings estimated with this programs range from about 43% to 82%.

Table 2 Refrigerator replacement programs implemented by utilities in Brazil.

COELBA CELPA CEMAT ELETROPAULO CEB

Number of refrigerators 8023 1300 2522 3150 2400
consumption (MWh/year) – Before 5362 2184 2300 4158 1604
replacement
consumption (MWh/year) - After 2301 390 777 907 682
replacement
Energy saving (MWh/year) 3061 1794 1522 3250 921
Energy saving (%) 42,9 82,1 66,2 78,2 57,5

2. The Low-income Population

About 37% of the Brazilian residential consumers are considered to be low-income consumers and
receive subsidies amounting to around R$ 120 million per month. The proportion of low-income
consumers is higher in the Brazilian Northeast and North regions, respectively 66% and 43% of their
residential consumers. There are almost 18 million consumers classified as low income in the country,
of which 43% are concentrated in the Northeast region, followed by the Southeast (36%). Information
on low income consumers by region is provided in Table 3.

2
Table 3 – Number of low-income electricity consumers by region (2005)

Source: [7]. Note: data from October 2005.

Data from PNAD 2004 (Survey from household sector) also show that the income of more than 30%
of the Brazilian households is less than two minimum wages - SM1 (Table 4).

Table 4 – Distribution of households by income classes in % (2004)

The Refrigerators and the Low-Income Household

This report is based on the results of a country-wide field survey into household appliance ownership
whose records were provided by ELETROBRÁS . For the present report, information was compiled
related to household refrigerator ownership levels and refrigerator characteristics which were
available from the survey. The survey was conducted on a sample of 9,850 consumers selected from
the Brazilian electricity distribution utilities.

About 96% of the Brazilian households have refrigerators (Figure 1). The Northeast region has the
lowest ownership, but nevertheless so reaches 92%. Refrigerators only are responsible by about 30%
in average in the share of electricity consumption in the low-income households. See table 5

1
Minimum Wages same as Salário Minimo (SM)

3
 Table 5 –The structure and average consumption by end-uses by income classes in minimum
wages (m.w.)1

Income (m.w) <1 1–2 2-3 3–5

kWh/ (%) kWh/ (%) kWh/ (%) kWh/ (%)

End Use month month month Month

Lighting 18 20,8% 22 20,0% 28 19,2% 33 18,0%

Refrig. 30 35,4% 37 33,1% 39 26,0% 43 23,5%

Freezer 3 3,2% 4 3,4% 6 4,0% 8 4,5%

Note: 1- Minimum Wage: In 2006 it has a value of R$ 350/month.
Air Con. 0 0,0% 1 1,0% 2 1,4% 4 2,1%

TV set 13 15,0% 15 13,2% 16 11,1% 18 9,6%

Showers 14 15,9% 18 16,6% 28 18,9% 33 17,8%

Others 8 9,7% 14 12,8% 29 19,4% 45 24,6%

Total 85 100,0% 111 100,0% 148 100,0% 183 100,0%

Figure 1: Saturation levels for residential refrigerators: Brazil and regions (% of electrified
households)

Source: Own elaboration from the Survey Eletrobras

Around 30% of Brazilian refrigerators are more than 10 years old (Figure 2). Furthermore, the majority
of the oldest refrigerators, as expected, are found amongst the lowest income families (Figure 3),
averaging 8 years old. It was also possible to verify the most common refrigerator models in the
surveyed regions. In the North and Northeast regions the model Consul 280 predominates; in the
Southeast and Center West regions there is predominance of the model Brastemp 260 and in the
South region, the model Brastemp 320. These are important inputs to carry out electricity
consumption estimates. None of these models are grade-A labeled appliances.

4
Figure 2: Refrigerators distribution in Brazil according to their declared age (years)

Source: Own elaboration from the Survey Eletrobras/PROCEL

3. Case Study

This case study was done amongst 141 low income consumers in the State of Bahia, in the
metropolitan area of its capital, Salvador. These households have been surveyed in order to better
understand their consumption patterns. Individual end-use metering was done in 20 households
(refrigerators). Measurements were made continuously during 7 days on the existing refrigerator and
ex-post measurements will also be made. A larger program consisting of 13 thousand low-income
households is being designed by the same utility.

In this section the data collected on the existing refrigerators is presented along with
estimates of the potential electricity savings expected from the replacement program.

About 35% of the existing refrigerators are in poor condition and 66% of the total surveyed
are more than 10 years old. Regarding their size, about 50% have volumetric capacity equal or below
300 litres.

Ex-ante measurements

The end use voltage averaged 126,11 V, which corresponds to the voltage required by the
refrigerators in use in Brazil. The power factor measured in the selected households is low, averaging
0.69 (ranging from 0.43 to 1), below what is established by the current national regulation (minimum
of 0.92). These lower values indicate the situation of higher distribution losses in this area.

The average energy consumption of the existing refrigerators is about 83 kWh, twice as much the
best models currently available in the domestic market. Table 6 shows the results from the
measurement of 17 refrigerators.

5
Table 6: Ex-ante measurements
Household Current Wattage Apparent Power factor Consumption hours on kWh/month*
(Amps) (W) Power (VA) (W/ Va) (kWh) (h)

1 INITIAL MEASUREMENT 1,94 188 232 0,81 - -

FINAL MEASUREMENT 1,68 142 198 0,7 24,51 165 108,74

2 INITIAL MEASUREMENT 2,45 155 313 0,48 - -

FINAL MEASUREMENT 2,45 160 300 0,52 20,47 139 107,80

3 INITIAL MEASUREMENT 1,51 123 186 0,66 - -

FINAL MEASUREMENT na na na 1 9,97 184 39,66

4 INITIAL MEASUREMENT 0 0 0 1

FINAL MEASUREMENT 2,4 160 290 0,5 20,45 139 107,69

5 INITIAL MEASUREMENT 1,92 180 227 0,79 - -

FINAL MEASUREMENT 1,49 123 181 0,67 18,72 166 82,55

6 INITIAL MEASUREMENT 2,2 174 280 0,63 - -

FINAL MEASUREMENT 2,64 253 350 0,76 25,52 167,00 111,86

7 INITIAL MEASUREMENT 2,12 181 266 0,67 - -

FINAL MEASUREMENT 2,07 175 258 0,67 9,66 55,37 127,71

8 INITIAL MEASUREMENT 2,09 183 277 0,66 - -

FINAL MEASUREMENT na na na 1 14,41 138 76,44

9 INITIAL MEASUREMENT 1,96 173 228 0,74 - -

FINAL MEASUREMENT na na na 1 20,87 213 71,72

10 INITIAL MEASUREMENT 1,98 183 238 0,76 - -

FINAL MEASUREMENT 1,72 146 209 0,69 11,22 140 58,66

11 INITIAL MEASUREMENT 1,77 146 213 0,68 - -

FINAL MEASUREMENT 1,93 170 235 0,7 14,74 156 69,16

12 INITIAL MEASUREMENT 2,17 124 282 0,43 - -

FINAL MEASUREMENT 2,2 149 286 0,52 28,43 188 110,70
13 INITIAL MEASUREMENT 1,65 120 220 0,54 - -

FINAL MEASUREMENT 1,63 121 214 0,56 13,78 187 53,94

14 INITIAL MEASUREMENT 1,74 147 233 0,63 - -

FINAL MEASUREMENT 1,64 126 219 0,57 14,96 188 58,25

15 INITIAL MEASUREMENT 1,33 106 157 0,65 - -

FINAL MEASUREMENT 1,28 100 157 0,64 9,99 165 44,32

16 INITIAL MEASUREMENT na na na 1 - -

FINAL MEASUREMENT 1,77 138 232 0,59 24,06 164 107,39

17 INITIAL MEASUREMENT 1,26 105 148 0,7 - -

FINAL MEASUREMENT 1,21 98 146 0,67 15,63 165 69,34

Average 1,81 143,54 226,61 0,69 17,06 159,65 82,7

Notes: * assuming 732h/month. The final measurement was made seven days after the
initial measurement. Three household measurements presented discrepancies and are
being revised. na: not available (the refrigerator was disconnected at the time).

3.2 Ex-post and estimated savings: the new refrigerator

The program will replace the existing refrigerator by a new model with internal volume of 252
liters. The adjusted monthly consumption estimated is 16.8 kWh2.

2
This value will be checked against on site measurements that will be performed during June/2009.

6
 Comparing the existing measured average refrigerator consumption and the estimated
consumption of the new refrigerator, the estimated savings per household is

82.7 – 16.8 = 65.9kWh/month

4. Conclusions
Refrigerators represent an interesting appliance for low income energy-efficiency programs. This is
attributed to (a) their high participation in total residential energy consumption; (b) high appliance
penetration among low-income households; (c) most of low-income households own refrigerators
more than 10 years old; d) the energy consumption should be higher in such households due to the
precarious electrical installations and consequently inadequate energy quality and voltage provision,
then reducing the performance of the appliance; (e) when compared to newly available models the
energy consumption gap is enormous.

These results illustrate the quantitative amount of electricity savings that can be expected from such
programs. In the course of the following months further cost-benefit analysis will be made, together
with evaluation of household satisfaction and the performance of the new refrigerator in that context.

7
References
[1] Jannuzzi, G. M. (2000). Public Goods and Restructuring of the Brazilian Power Sector: Energy
Efficiency, R&D and Low Income Programs. 2000 Summer Study on Energy Efficiency
Buildings "Efficiency and Sustainability", Asilomar, California, ACEEE.

[2] Wiser, R., C. Murray, et al. (2003). International Experience with Public Benefits Funds: A
Focus on Renewable Energy and Energy Efficiency, Energy Foundation, China Sustainable
Energy Program: 100.

[3] Vidinich, R. (2006). Impactos da Mudanças Legais e Estratégicas na Execução de Programas

de Eficiência Energética. Apresentação. XVII SENDI, Belo Horizonte, MG.

[4] Jannuzzi, G.M., Dornelas, V. and Bittencourt, M. Evaluation of Residential Lighting Projects in
Brazil. In: 4th European Conference on Energy-Efficient Lighting, 1997, Copenhagem.
Proceedings: 4th European Conference on Energy-Efficient Lighting. Copenhagen, IAEEL. CD
Rom.

[5] Mascarenhas, A. C. R. and D. Nunes (2005). Avaliação do Consumo de energia após melhoria
nas instalações elétricas internas e substituição de lâmpadas em habitações populares. VIII
Encontro Nacional sobre Conforto no Ambiente Construído - IV Encontro Latino-Americano
sobre Conforto no Ambiente Construído, Maceió, Alagoas, Brasil.

[6] Mascarenhas, A. C. R. and A. C. C. Pinhel (2006). Doação de Refrigeradores Eficientes para a

População de Baixa Renda na COELBA. SENDI Seminário Nacional de Distribuição de
Energia Elétrica, Belo Horizonte, CEMIG.