Head Office and Manufacturing P.O. Box 120 Moorebank, N.S.W.

1875
62-66 Governor Macquarie Drive, Chipping Norton Telephone: 61 2 9725 8888
N.S.W. 2170, AUSTRALIA Fax: 61 2 9725 8444

Zoned label, Air conditioning & Pool Pumps Team

Appliance Energy Efficiency Branch
Energy Division
Department of Industry, Innovation and Science

18th March, 2016

Consultation RIS Air Conditioners and Chillers

Thank you for allowing Daikin Australia the opportunity to provide comment on the proposed
changes to Energy Performance Standards for Air Conditioner and Chillers as outlined in the
Consultation Regulatory Impact Statement of February 2016.

As you may be aware, Daikin Australia has been a strong advocate for the adoption of Seasonal
Performance ratings and we are extremely pleased to see that this superior and more customer
focussed methodology has been proposed.

We are in general agreement for all the Option B2 reform proposals, except for reform proposal
No. 10 (Align the MEPS levels for fixed and variable speed air conditioners) to which we strongly
object due to the extremely adverse energy use outcome and consumer cost impact of this
proposal. Our supporting rationale is as below.

Adverse outcome of removing Part Load MEPS compliance

If the current No.10 Reform Proposal is adopted as is, it will require many manufacturers to
increase the size and cost of their products by an amount that is way out of proportion to the
extremely minimal energy efficiency gain. Furthermore, as the data below shows, a MEPS
compliant fixed speed model of equivalent cooling capacity would use 24% more energy per
annum that a variable speed model that would be removed from the market by this proposal.

Type Difference
Variable Fixed Value %
Full Capacity (W) ful(35) 15616 15616 0
Full Power Input (W) Pful(35) 5166 5037 -129 -2.5%
Tested Half Capacity (W) half(35) 7957
Values Half Power Input (W) Phalf(35) 2231
EER full 3.023 3.100 0.08 2.6%
EER half 3.567
ISO Annual Load (kW/h) LCST 11449 11449 0
16358- Annual Energy (kW/h) CCSE 2799 3478 678 24.2%
1 Cooling Performance CSPF 4.090 3.292 -0.80 -19.5%
Comparison of MEPS compliant fixed speed v non complaint variable speed of same capacity

Daikin Australia Pty Limited Consultation RIS Air Conditioners and Chillers Page 1
The variable test data in the preceding table is actual test data from a Daikin 15.6kW model,
which sits in the most popular ducted segment of the Australian market (ie 6 horsepower). The
fixed data is a fictitious model, it assumes a fixed speed system with identical output capacity
but with a lower input power that delivers an EER equal to the applicable MEPS level for this type
of product (ie 3.1). Only the full capacity and input power for the fixed speed system are applied to
the CSPF calculation, other data used in the calculation such as low temperature performance and
cycling degradation factor are based on default values in AS/NZS 3823.4.1. As there is likely to
some changes to the temperature bin data in AS/NZS 3823.4.1 we have used the reference ISO bin
data for calculations. To simplify the comparison, we have removed the additional variable of
stand-by power consumption and assumed that EER = AEER.

The spreadsheet used to calculate the CSPF also shows the system EER at each bin temperature, as
noted in the table above the EER at 35C is 3.023 and 3.10 for the variable and fixed speed
respectively. At 34C the EER for the variable system is 3.211 compared to 3.12 for the fixed speed
system.

The above comparison uses a system with an EER of 3.023 which is MEPS x 0.975, the current part
load clause in AS/NZS 3823.2 has an EER limit requirement of MEPS x 0.95. If we increase the
tested input power for the variable system to 5,300 watts so that the EER = MEPS x 0.95, the fixed
speed system with an EER of 3.1 will still consume 23.9% more energy over the year.

In the table below, I have provided data for another Daikin model that uses a compressor with
improved part load performance, the test data for this model also includes test data at minimum
inverter capacity rather than using the default values in the Standard. As this ducted model has an
EER of 3.176 it would comply with MEPS (assuming zero stand-by power). I have compared the
CSPF calculation and annual energy consumption to a fictitious fixed speed model with identical
performance at full capacity. In this example, the fixed speed system uses an additional 669 kW/h
or 78% more energy over the year than the equivalent part load optimised variable speed system.

Type Difference
Variable Fixed Value %
Full Capacity (W) ful(35) 6990 6990 0
Full Power Input (W) Pful(35) 2207 2207 0 0.0%
Half Capacity (W) half(35) 3514
Half Power Input (W) Phalf(35) 745
Tested
Min Capacity min(35) 2954
Values
Min Power Input Pmin(35) 492
EER full 3.167 3.167 0.00 0.0%
EER half 4.717
EER min 6.004
ISO Annual Load (kW/h) LCST 5125 5125 0
16358- Annual Energy (kW/h) CCSE 855 1524 669 78.3%
1 Cooling Performance CSPF 5.997 3.363 -2.63 -43.9%
Comparison fixed speed v variable speed of same full capacity and input power

While the above model has an EER of 3.167, if it had a stand-by power consumption of 15 Watts or
more it would have an AEER less than 3.1 and therefore not be able to be sold under the current
Option B2 proposal, even though it has a huge energy saving over the fixed speed model.

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The argument for eliminating the part load allowance to reduce peak load on the electricity
distribution system is technically very weak. Even the worst case variable speed product with an
EER of MEPS x 0.95 will only increase the power consumption for that particular air conditioner by
5% at rated capacity. Considering that only 15% of registrations are using the current part load
option and that annual sales account for around 10% of installed stock the annual impact will be a
5% x 15% x 1% = 0.00075% on the total air conditioning load for a particular region, the
percentage impact on total peak load will be even lower due to load associated with other
electrical appliances and lighting. This case assumes that all air conditioners are turned on and
operating at full load. It would be extremely unlikely that nearly all air conditioners will be on due
to consumer absence or commercial premises closed for the day, furthermore, many installations
that have been turned on before the peak would be operating at part load.

The Australian air conditioning industry has spent millions of dollars making most of their products
AS 4755 compatible at the request of the electrical distributors. Demand Management is by far the
most effective and appropriate way to address peak demand. We are aware of successful demand
response trail programs by the electrical industry using the internet connectivity of modern air
conditioners to achieve significant demand reduction without additional infrastructure of DRED or
smart meters, this is the way of the future and the way to curtail excessive demands on the
distribution system. Using a consumer focussed Energy Efficiency scheme to indirectly try to solve
peak load cost issues for electrical distributors is inappropriate and will add further manufacturing
and subsequently consumer costs with little benefit. Australian consumers are already paying
additional costs due to the inclusion of an AS 4755 interface in most products, which to our
knowledge, is really only being utilised in a small section of the Australian market.

Regarding the US DOE re-introduction of EER based MEPS in hot-dry states, it should be noted that
this applies to cooling only equipment and the required EER is fairly low for the type of equipment
in scope and that SEER is still also required. Furthermore, we have been advised that the DOE is
planning to amend the requirement to allow a lower EER for equipment that has a higher SEER.

The minimum physical testing required to determine the CSPF of a variable capacity air
conditioner is full and half capacity testing at T1 conditions. If an air conditioner has a poor full
capacity EER it will impact on the final CSPF result (and also the half capacity result) so it would be
unlikely that relying solely on CSPF as the MEPS metric would result in a dramatic drop in full
capacity EER of new models.

If EER is deemed to be the applicable MEPS metric in the immediate future, we propose that the
part load allowance be retained but modified to require that:- variable speed products that have
an AEER less than MEPS and greater than MEPS x 0.9 shall have a CSPF (or HSPF) of greater than
the equivalent fixed speed CSPF (HSPF) for the applicable MEPS level x 1.1. For example, for
ducted split systems under 19kW the applicable MEPS level is 3.1. For a fixed speed ducted system
with a full capacity EER of 3.1 the resulting CSPF (using default values in the standard and ISO
temp bins) is 3.292. Therefore, a variable system that has an EER of between 0.9 and MEPS shall
have a minimum CSPF of 3.292 x 1.1 = 3.621). Alternatively, we could require that for every %
point the EER is below MEPS, the CSPF shall be the equivalent number of % points over the fixed
speed CSPF for an EER at MEPS). Both proposals impose no additional testing burden and can be
easily audited from the registration data that manufactures will provide.

We note the following paragraph in the RIS (page 11):-

However, if the SEER standard and associated Zoned Label are adopted it will allow variable speed
compressors to demonstrate their superior energy efficiency performance over fixed speed

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compressors, and incentivise improvements in part load energy efficiency performance. Thus, the
rationale for the part load compliance pathway would no longer exist.

While this statement is correct for variable speed products that have an AEER exceeding the MEPS
level, products such as those outlined in the 2 tables above would not get the opportunity to
demonstrate their superior energy efficiency and performance because they would be banned
from the market if the part load compliance pathway is removed.

We appreciate the difficulties outlined in the RIS related to setting an appropriate CSPF / HSPF
based MEPS level due to our different climate zones and lack of market CSPF / HSPF data.
However, the final objective should be to move to a CSPF / HSPF based MEPS as soon as possible.

Zone Labelling

We strongly support the adoption of Zone Labelling, however we do not believe there is a cost
benefit in applying the label to products that are not on retail display such as commercial systems,
ducted indoor units and roof top package units. Requiring these products to be labelled will only
add additional cost to the manufacture and supply. We recommend that the zone label
information be mandated by other means such as web site.

We understand the merit and potential future benefits of including a QR code on the label.
However, we have received advice from our parent company that Saudi Arabia has experienced
problems with incorrect QR codes on labels. If QR codes are to be implemented a robust and
controlled administration system that does not place additional burden or delay on the
manufacturer will need to be implemented.

Chiller Comments

Remove the unique Australian/New Zealand chiller test standard and align with US test standard
AHRI 551/591:2011.
Daikin Australia agrees with the proposal to remove the Australian test standard, but contends
that the Government should allow use of either the US AHRI and Eurovent test standards, given
that production occurs in both jurisdictions.

Include the energy efficiency requirements for A/C >65 kW capacity and chillers <350 kW under
GEMS/NZ regulations and in Australia remove these from the NCC.
Daikin Australia agrees with this proposal.

Align >65 kW A/C MEPS levels to 39 to 65 kW GEMS MEPS (i.e. AEER/ACOP 2.90). Align chiller
MEPS levels to the US energy efficiency standard ASHRAE 90.1:2013 where the US levels are higher.
Daikin broadly agrees with this proposal, but has a number of specific comments:
It is of Daikins view that heat pump chillers (which are currently exempt) need to be included
and compliance in the cooling mode should be a mandatory requirement. Free Cooling chillers
& Adiabatic designed chillers should also be included. Free Cooling Chillers would be required
to comply in cooling mode and adiabatic chillers would be required to comply in cooling mode
without the assistance of the evaporator pre-coolers.
Chillers < 150kW should have a full load compliance test only due to difficulties in testing part
load performance with single or dual compressor chiller designs. Further Daikin believes that
for chiller < 150kW the current NCC full load efficiency (COP 2.5) should be maintained due to
a large percentage of these chillers including built in hydraulic (pump) kits which substantially

Daikin Australia Pty Limited Consultation RIS Air Conditioners and Chillers Page 4
 reduce the full load efficiency of these machines. It is very difficult to achieve a full load
efficiency COP of 2.87 from a small inverter chiller that include the input energy consumed by
the pump(s)
The inclusion of a Max Compliance Capacity should be included in the registration process
to remove potential loopholes within the current system where chiller suppliers can register
models at a reduced capacity to comply with current full load and part load requirement and
then sell that chiller at its nominal capacity.

Technical/administrative questions

Fully aligning to international test standards when appropriate:

While the proposed revisions of ISO test standards seem fully acceptable to Australian and New
Zealand on this occasion, we feel it is important to continue to maintain localised versions should
we require a national deviation to the International Standard.

Updating international based test standards:

When international test standards undergo minor amendments that have zero cost impacts, we
would support the adoption of the amendment without a formal RIS process.

Water-source heat pumps:

We support the proposals described in the RIS.

Remove H2 MEPS requirements:

We agree that the separate H2 MEPS requirement can be removed provided that the Cold Climate
rating on the Zone Label provides adequate differentiation between good and poor product
performance in the H2 region.

Simulation testing of 30 kW units under a SEER scenario:

Our parent company engineers have advised that it would be difficult to accurately simulate
product performance in the frosting region (ie H2).

Multi-split registration:
We support both the proposals described in the RIS.

Add-on coolers:
We believe that add on cooling products are already covered by MEPS and therefore they should
be MEPS compliant and registered as per other products they compete with.

Supply of outdoor units only:

The loophole of selling non MEPS compliant / registered outdoor units needs to be closed. The US
market has standards and processes to address mixed systems. These should be considered for
inclusion as proposed.

Noise test standard:

We support the inclusion of Noise Level information on the Zoned Label provided it replaces
current State based outdoor unit labelling requirements. We believe that EN 12102 is the most
suitable noise standard to apply.

Noise test points:

We support the proposals described in the RIS.

Daikin Australia Pty Limited Consultation RIS Air Conditioners and Chillers Page 5
Fixed speed air conditioners - degradation coefficient:
We agree that the default CD value of 0.25 is used for all registrations and will not be able to be
changed by the applicant.

Measurement of non-operative power consumption:

We agree to align with ISO SEER standard (AS/NZS 3823.4:2014)

Heat pump and reverse cycle liquid chilling packages:

Please see earlier comment on this matter.

Inverter over-capacity:
Incorrect sizing and negative efficiency impacts is not specific to variable speed products. It has
been a minor issue before the introduction of energy labelling in 1997.

Supporting data

Please do not hesitate to contact me if you require additional information, we are also happy to
share the spreadsheet used to perform the CSPF calculations in this submission.

Rob Beggs
General Manager Manufacturing
Daikin Australia Pty Ltd.

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