Minimum Energy Performance Standards (MEPS)
Policy measure

According to Garcia et al. (2007), the Energy Efficient Act of 2002 introduced two Minimum Energy Performance Standards (MEPS) for equipment and appliances as a policy instrument to reduce energy demand following electricity shortages in Brazil in 2001.


The MEPS covered ‘standard’ (mandatory) and ‘high-efficiency’ (voluntary) motors. In 2005, high-efficiency MEPS became mandatory for all motors in the Brazilian market.    

Implementation

The first product that was affected by  the regulation was the squirrel cage three-phase induction electric motor, which uses around 32 percent of Brazil’s electricity supply. Through the Brazilian Labelling Program (PBE), Brazilian motors manufacturers, the CEPEL (responsible for motors testing) and INMETRO (PBE coordinator) reached consensus on defining a series of sequentially more stringent efficiency targets for both standard and high-efficiency classes of this product on a voluntary basis (Garcia et al., 2007).

Challenges

This production transition is expected to have a profound impact on industrial processes as well as on equipment prices for industrial consumers, including significant changes in the manufacturing process. This requires new equipment, tools and operation schedules affecting all and specifically small manufacturers. Economies of scale achieved with the production increase will therefore in great part be balanced by the needs for new investments, meaning the price of high efficiency motors, which today is about 40 percent higher than that of standard motors, will not change significantly. The production transition will also require substantial increases in the use of specific materials like ferro-silicon plates, for which there is only one supplier in the national market. Another example is steel – some action may be necessary to assure adequate supply of steel to prevent impacts on retail motor prices (Garcia et al., 2007).

Outcomes

According to Garcia et al. (2007), the success of this process justified the decision to make the MEPS mandatory for induction motors. The implementation of the MEPS not only promoted energy saving but also benefited the Brazilian motor manufacturers since these standards eliminate competition, in particular, from less efficient foreign units, sold primarily as components. The voluntary process improved Brazilian motor energy efficiency significantly. The last step in the adoption of MEPS saved 1 percent of electricity used by motors, postponing the construction of a 250MW hydroelectric power station. Currently (2007), all manufacturers have a high efficiency motors production line representing only around 10 percent of production. The next step for legislation towards energy efficiency was taken in December 2005, entering into force four years after approval, namely the Interministerial Ordinance 553 which specifies a single set of MEPS levels, eliminating efficiency levels that are lower than those previously defined as being ‘high efficiency’. This implies that only high efficiency motors will be manufactured in Brazil after 2010 (Garcia et al., 2007).


The motor substitution is generally advantageous for individual companies. The average cost of the energy conserved based on motor substitution usually covered by the Brazilian electrical system expansion at a 12 percent discount rate, is far below the winning bids in auctions for the Brazilian electrical system expansion. Furthermore, it does not include the social and environmental benefits of saving electricity (Garcia et al., 2007).

References

Garcia, A.G.P., Szklo, A.S., Schaeffer, R. and McNeil, M.A., 2007. Energy-efficiency standards for electric motors in Brazilian industry. Energy Policy, 35, pp. 3424-3439.