Energy efficiency and cost-saving opportunities in public and commercial buildings - The case of air-conditioners in DAIKIN Vietnam

In addition to economic benefits, reducing electricity bills when participating in the DR program to adjust the electrical load, DAIKIN once again confirms the reduced electricity consumption when installing the VRV integrated with the SmartDR64 solution, customers will save at least 8% - 15% of electricity consumption/month.

In the globalizing process, in most countries, both developed and developing countries, the commercial and public construction sector is one of the fastest-growing energy-consuming sectors. This is mainly due to the growth of commercial and public activities and their related needs for heating, ventilation, and cooling (HVAC), IT services, and lighting, .etc..

In April 2022, the IEA released a report on air conditioning in collaboration with the Association of Southeast Asian Nations (ASEAN) Member States, which includes ten Southeast Asian states: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The report highlights that electricity use for air conditioning in buildings in ASEAN has grown about sevenfold since 1990 to around 80 TWh in 2020. In comparison, electricity consumption from air conditioning in 2020 was around 100 TWh for the EU and about 430 TWh for China.

There are large differences in air conditioner ownership across the region, with more than four-fifths of households in Brunei Darussalam, Malaysia, and Singapore owning an air conditioner in 2017, compared to fewer than 10% in Cambodia, Indonesia, Lao PDR, Myanmar, Philippines, and Viet Nam. Nevertheless, with continued economic development and population growth across the region, the IEA projects that air conditioner stock across ASEAN will grow from nearly 50 million units in 2020 up to 300 million units in 2040. Consequently, electricity demand from air conditioning in the region could reach 300 TWh in 2040.

In this context, in 2022, the Ministry of Industry and Trade (MOIT), as well as international organizations, have organized many conferences on energy efficiency and energy saving, whereby the conferences emphasize the content of energy efficiency that needs to be aimed at commercial, public buildings, and urban areas are key areas where CO2 reductions can be cost-effectively achieved. It is therefore imperative that all parties take all necessary steps to disseminate good practices, promote investment in energy efficiency and provide technical solutions for the commercial and building sector. This includes behavioral changes in how companies, architects, urban planners and building users, investors, and air conditioning manufacturers, design and operate buildings, the non-residential house must be actioned in urgently.

Mrs. Ly Thi Phuong Trang - COB of DAIKIN VietNam shared DAIKIN’s solution at the Training conference on economical and efficient use of electricity for power units and electricity users
Mrs. Ly Thi Phuong Trang - COB of DAIKIN VietNam shared DAIKIN’s solution at the Training conference on economical and efficient use of electricity for power units and electricity users

According to the forecast of GIZ (Germany), the total amount of air conditioners using in the Vietnamese market will be 25÷30 million units in 2025. Using air conditioners makes electrical consumption increase continuously (2÷5% of electricity generation per year). Consequently, the CO2 emission (i.e. direct and indirect) will increase rapidly, when there are no administrative solutions for the collection and recovery of refrigerants such as R22, R410a, R32, etc in air conditioning.

Prediction for Vietnam's electricity industry, warns of an imbalance between supply and demand due to the contribution of energy consumption from large air conditioning systems, such as those used in commercial buildings, offices, shopping malls, and medical facilities, which often require high amounts of electricity and energy. Several air conditioning technologies and energy management strategies have sought to minimize consumption to reduce billing costs and improve system efficiency.

Typically, the VRV system is integrated with the SmartDR64 solution that was researched and piloted by DAIKIN, one of the solutions highly appreciated by senior experts in the energy sector in 2022. This solution has been researched since 2021 and launched out to the market in 2022 for testing by DAIKIN. This solution proposes a Demand Respond (DR) framework for planning the day-to-day and hour-to-hour operation of an air conditioning system to minimize energy costs and ensure thermal comfort. VRV system integrated with SmartDR64 - load adjustment solution is an energy-saving solution, implementing power load adjustment programs to bring efficiency to users with fast payback time and sustainable savings.

Apart from this, the VRV system integrated with Smart DR64 will operate optimally, and efficiently using electricity based on an artificial intelligence application; Manage and operate the VRV system according to list, block/area/region and actively monitor the system remotely effectively; Participate in adjusting the electrical load of the VRV system through adjustments, settings, remote and automatic control; Connect and communicate closely with the Customer Information Management System of the electricity seller (Electricity Companies, Power Corporations); Management and monitoring of electricity usage of VRV system via the internet; Statistics and reports on the electricity consumption of the air conditioning system by day, month, and year.

Additionally, the benefits of the optimal operation and saving electricity, when integrating the SmartDR64 solution, the VRV system also has the feature of performing DR load adjustment events when receiving the request of the electricity seller or the dispatching unit, this is an additional benefit/incentive for customers when participating in the DR program with EVN, contributing to ensuring the balance of electricity supply and demand, and at the same time-saving money, electricity costs for customers.

Analyzing and testing of automatic power load adjustment technology from KICOTRANS building connecting API with Ho Chi Minh City Electricity Corporation (EVNHCM). Tested on 01 floors with 12 devices/floor, the results are calculated in 2h00 of the event with the registered power cut down to 5KW on 24/3/2021 and on 25/3/2014 registered for adjustment 25KW reduction. In fact, after the event ended, the electricity output decreased more than expected, on March 24, 2021, the electricity output was cut off by 10KW/floor, and on March 25, 2021, cut off by 34 KW/floor, respectively.

Analyzing and testing of automatic power load adjustment technology from KICOTRANS
Analyzing and testing of automatic power load adjustment technology from KICOTRANS

The DAIKIN air conditioner market is dominated by the latest VRV product, Daikin VRV 5 S-series,... inverter and control technology that minimizes energy consumption for optimal energy savings is integrated with SmartDR64 is a groundbreaking study by DAIKIN in 2022.  According to market research and estimation by DAIKIN as manufacture, air conditioning  industry in Vietnam is expected to grow at 7-8% y-o-y until 2030.

This article proposed a low computational and economic cost solution SMART DR 64 of DAIKIN for planning and managing air conditioning systems. The application of this DR approach in HVAC systems is a useful methodology to reduce billing costs and improve comfort since it only requires a computer center and remote-control devices for the equipment to be managed. Furthermore, HVAC systems are ideal for the implementation of DR strategies due to their high-power demand and high consumption.

VRV Series 5 is integrated with the SmartDR64 solution
VRV Series 5 is integrated with the SmartDR64 solution

Although there are regulations on energy efficiency standards and labels from the Ministry of Industry and Trade (MOIT) for air conditioners in Vietnam, Vietnam has not yet received the full benefits of energy efficiency standards in buildings public and commercial homes due to the dominance of low energy efficient air conditioners used in offices and commercial establishments. DAIKIN's SMART DR 64 technology and products has just completed the testing phase in 2022, it is expected to pilot 2023 from 6-10 projects of SMART DR 64 for buildings under EVN. After this period, Smart DR 64 technology will be widely installed on commercial buildings and offices nationwide when the effectiveness has been confirmed by specialized units such as EVN, MOIT, and related agencies in the energy sector.

Therefore, this article aims to assess the energy efficiency situation in public and commercial buildings in Viet Nam as far as air-conditioners are concerned and determine energy efficiency opportunities in reducing electricity consumption and cost in buildings.

Coming back to the case of DAIKIN's SMART DR64 to calculate the amount of electricity reduced in 2 working hours for a 10-story of KICOTRANS building, with a total of 12 devices participating in the DR event, the capacity of using indoor units of the building is calculated at 100%, the amount of electricity saved/day/building is at least 360 kW to 1,224 kW.

The beneficial to of electricity saved through participating in the DR program with SMART DR64, is only the retail price of electricity for normal hours is calculated without considering the peak hour price when implementing the DR is 2,666 VND/kWh. It is estimated that 1-day KICOTRANS building can save from 1 million VND to 3.5 million VND for the days of participating in DAIKIN's integrated electrical load adjustment event (SmartDR64 ).

The beneficial to of electricity saved through participating in the DR program with SMART DR64 for 1-day KICOTRANS building
The beneficial to of electricity saved through participating in the DR program with SMART DR64 for 1-day KICOTRANS building

In addition to economic benefits, reducing electricity bills when participating in the DR program to adjust the electrical load, DAIKIN once again confirms the reduced electricity consumption when installing the VRV integrated with the SmartDR64 solution, customers will save at least 8% - 15% of electricity consumption/month with reference to actual electricity expenses of Kicotrans project in September - October 2022.

By virtue of many training programs, conferences, and seminars on energy efficiency in buildings in 2022, receiving from the feedback of some large customers of buildings and offices, it can be seen that limitations in terms of finance, customers' knowledge is not universal, adequate guidance on energy-saving and on technologies is inadequately provided on the long-term benefits of efficient energy use of machines air conditioning, solutions to reduce electricity bills, as well as the procurement process at public institutions that favor products and solutions that are the main factors hindering energy efficiency and solutions for air conditioning.

Member of Training conference on economical and efficient use of electricity for power units and electricity users highly focused on DAIKIN’s solution
Member of Training conference on economical and efficient use of electricity for power units and electricity users highly focused on DAIKIN’s solution

It is suggested by some customers and investors that the Vietnamese government should implement financial incentive programs and support reducing the price of air conditioners to support the energy efficiency of air conditioners or support policy, pilot, and create motivation for manufacturers on energy-saving solutions for air conditioners such as DAIKIN to constantly offer customers using saving electricity products and solutions. This will greatly contribute to increasing energy efficiency in line with the target of implementation of Viet Nam’s comprehensive national energy efficiency program targeting all sectors of the economy in the period 2019-2030.

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