The Growing Cooling Demand Challenge

The rapidly growing electricity demand from air conditioning is posing challenges to electricity reliability and energy security.
Published: Tue 23 Sep 2014

Air conditioning has been named among the top 10 greatest engineering achievements of the 20th century, but such is the demand that there is only a small window of opportunity to put in place policies to transform markets to more efficient and smarter technologies before millions of inefficient units lock in demand for years to come.

At a roundtable at the recent Fifth Clean Energy Ministerial in Seoul, South Korea, participants looked into this issue, with the aim to understand and address the emerging challenges.

Electricity demand from air conditioning

Globally, the additional electricity demand in 2020 from room air conditioners bought this decade is expected to amount to more than half of the electricity generation projected to be added from solar and wind over the period. Rising incomes and large population centres in hot climates mean that emerging economies are poised for rapid increases in peak electricity demand for air conditioning. For example, in China over a span of 20 years, ownership of room air conditioner units in urban households leapt from virtually none in 1990 to over 100% (more than one unit per household) in 2010. India is poised to see similar explosive growth, with air conditioner sales increasing by about 15% annually since 2004. Within the next two decades, electricity demand for cooling in India could increase by more than ten-fold.

Such increased cooling demand not only affects overall energy usage but also is the largest contributor to peak load on a per-appliance basis. Cooling comprises 40%–60% of summer peak load in large metropolitan cities with hot climates, such as New Delhi, India, and can triple peak load on the hottest days in some areas. By contributing to peak electricity loads, growing cooling demand is increasingly stressing electricity networks, leading to more frequent brownouts and blackouts.

This rise in electricity demand can be managed through a combination of policies to enhance the efficiency of cooling equipment, design buildings to require less cooling, improve system-wide efficiency with district cooling, and utilize demand response technologies and programs. However, there are barriers to the widespread adoption of energy efficient technologies and demand response for cooling.

Barriers to energy efficiency and demand response adoption

Technology and markets: While many efficient technologies already exist, cost and lack of markets are preventing the broader uptake of these technologies. Installation and maintenance can also be as important as the efficiency of the equipment.

Consumer behaviour: Motivating consumers to choose more efficient products requires payback on the cost premium within two or three years. Consumers need an incentive to participate in demand response programs and to overcome the often higher upfront cost of efficient technologies. In addition, how the products are used must be considered, as many consumers do not use optional features that require programming or provide energy usage information.

System-wide approaches: There is a need for holistic solutions to focus on the absolute energy drawn by devices connected to the grid, taking into account peak demand and the relevance of demand response measures. System benefits are difficult to deliver through regulations that are designed for individual products.

Policy and regulatory: Government policymakers and regulators need to provide leadership and vision as industry wants predictability in the regulatory environment to guide investments, as well as input into the regulatory process. Standards are needed to enable the creation of markets for these technologies and approaches.


● There is a need for holistic solutions to focus on the absolute energy drawn by devices connected to the grid, taking peak demand into account. Strong leadership and partnerships between public and private sectors are needed to attain the appropriate balance of regulation and market-based solutions.

● Regulations should evolve to incentivize utilities and consumers for desired behaviours.

● While the technology for more efficient and demand response-ready equipment exists, standards are needed to provide a technology-neutral, level, transparent, and predictable market.

● Technologies, policies, and financing mechanisms must come together for solutions to be affordable.

● Of paramount importance is understanding consumer behaviour and then engaging and informing the consumer to motivate a change in energy use.

Further reading

Public-Private Roundtables at the Fifth Clean Energy Ministerial