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As the phase out of CFCs and HCFCs proceeds, various HFCs have emerged or are emerging as the preferred refrigerant, blowing agent, solvent, aerosol propellant, or fire extinguishent in a wide variety of applications. Many of the applications, such as domestic and commercial refrigeration and air conditioning are pervasive throughout modern society. Others such as solvent cleaning and fire protection address smaller, but critical niches. In those cases where HFCs are the preferred alternative, the reason is that they provide significant cost savings compared to the less cost-effective and, in some cases, poorer performing and/or less safe materials or processes that would be used as alternatives to HFCs.

An order of magnitude estimate of the annual cost savings that will be provided to society by HFCs is presented in the following material. The basic approach is to first identify each application where an HFC is the preferred long term, post-HCFC phase-out choice of refrigerant, solvent, blowing agent, aerosol propellant, or fire suppressant. For each of these applications, the most cost-effective (on a comparable safety basis) alternative technology has been identified. The incremental costs (energy, manufacturing investment, equipment) relative to the HFC baseline are estimated and summed across all applications, in the U.S. and on a global basis. The approximate timeframe for this estimate is 2020-2030, after CFCs and HCFCs have been phased out and the long-term choices among non-ODS technology alternatives have been made and have had their full impact.

As indicated above, this exercise provides only an order of magnitude estimate of the societal cost savings attributable to HFCs. The available data for constructing this estimate are quite limited in many instances, so the estimated costs are subject to refinement in a more in-depth study.

Before the CFC phase-out, domestic refrigerators used CFC-12 as the refrigerant and CFC-11 as the foam-blowing agent. Today the industry has generally adopted two sets of replacements:

• HFC-134a refrigerant, either HCFC-141b or a blend of HCFC-141b and HCFC-22 as the foam blowing agent
• Isobutane refrigerant, a blend of cyclopentane and isopentane as the foam blowing agent, primarily in parts of Asia and most of Europe

As discussed in Section 4, the legal and regulatory ramifications of using the hydrocarbon alternatives differ country by country. HCFC-141b will be phased out in the early part of the next decade (January, 2003 in the U.S.). The most likely substitutes for HCFC-141b in the U.S. are HFC-245fa or HFC-134a (with continued use of HFC-134a as the refrigerant). As discussed in Section 4, the thermal conductivities of HCFC-141b and HFC-245fa blown foam are equivalent, and between 8-10% better than hydrocarbon blown foam. HFC-134a blown foam falls between HFC-245fa and HC blown foams.

Thus, for the purpose of this estimate, it is assumed that the preferred HFC alternative is HFC-134a for the refrigerant and HFC-245fa for the blowing agent. The alternative to these HFCs is the isobutane/cyclopentane refrigerant/blowing agent combination that would be used instead. The cost differences between the two are:

• Costs of manufacturing facility fire safety measures and VOC compliance measures for handling refrigerant and blowing agent. With HFC-134a and HFC-245fa, there are no costs of this type. As discussed in Section 4, the amortized cost of these safety measures, translated into incremental selling prices to the consumer is approximately $7/unit in the U.S. and $4/unit on average elsewhere in the world
• Product manufacturing costs (incremental unit costs in addition to the factory safety and VOC compliance measures indicated above) are estimated to add $15-30 (for explosion-proof components) to the direct manufacturing cost and $35-70 to the retail price in the U.S. Elsewhere, the impact is assumed to be one-half of this.
• Energy consumption and operating costs - energy consumption levels for the hydrocarbon option would be 10% higher than the HFC option, due to the lower thermal conductivity of HFC blown foam. The annual energy consumption of the HC refrigerator is 50 kWh/yr greater, adding $4/year to the annual operating cost. Outside the U.S., the energy cost impact is estimated to be half of the impact in the U.S., or $2/year, based on the smaller size of the average refrigerator outside the U.S.
• Costs of accidents related to the flammable refrigerant and blowing agent. In this analysis, this cost is assumed to be zero, however, it should be noted that there have been at least two related factory incidents causing damage and harm. (One in an Italian plant refrigerant charging station and one in Indonesia involving foam operating fires). It should also be recognized that the defrost heater in no-frost refrigerators is an issue that does not apply to most refrigerators produced outside of the U.S. and Japan. In addition, U.S. manufactures are concerned that even a small number of accidents could result in large financial claims. Product liability insurance costs could increase significantly. In a recent incident in Australia, the hydrocarbon refrigerant charge of a self-contained commercial refrigerator escaped accidentally while the unit was being serviced. The hydrocarbon vapor subsequently ignited and exploded, severely injuring the two service technicians.

Based on the preceding scenario and assumptions, the estimated annual societal cost savings that will be provided by HFCs for domestic refrigerators are estimated to be:

• In the U.S., 12 million refrigerators and freezers manufactured per year × ($7+30)/unit = $440 million per year.
• Additional annual energy cost in the U.S.: 100 million refrigerators × $4/year = $400 million.
• In the rest of the world, 60 million refrigerators and freezers per year × ($4+15)/unit = $1,140 million per year.
• Additional annual energy cost in the rest of the world, 500 million refrigerators × $2/year = $1,000 million.

Having replaced CFC-12 when it was phased out at the beginning of 1996, the HFC-134a vapor compression cycle has already emerged in full, global scale mass production, as the preferred long-term technology for mobile air conditioning. As discussed in Section 5, the most likely alternative to this technology is the transcritical CO2 vapor cycle. Hydrocarbon vapor cycle still has significant, unresolved fire safety issues. As discussed in Section 5, even with the hydrocarbon refrigerant confined to the engine compartment (with a secondary coolant used to connect the cooling capacity to the interior), the possibility of an unacceptably large number of engine compartment fires cannot be ignored or dismissed. To date, no comprehensive program of design, risk analysis, and collision testing has been carried out to validate a fire-safe hydrocarbon air conditioning system design.

As discussed in Section 5, transcritical CO2 does not have an LCCP advantage over current HFC-134a based mobile air conditioners. But costs to consumers would be substantially higher. Incremental costs to consumers fall into two basic categories:

• Operating costs
  • Incremental fuel consumption, due to the inherently lower efficiency of transcritical CO2. The impact varies with climate, but on average in the U.S. a CO2 air conditioner would consume (2325-1401)/11 = 84 liter/year (see Table 5-3) of additional gasoline. At current gasoline prices of $0.30/liter in the U.S., the average additional cost would be $25/year. In Europe and Japan, the additional fuel use is about half, but the retail price of gasoline is about double, so the incremental cost to consumers would be about the same.
  • CO2 systems are likely to require more frequent recharges, given the much higher system pressure driving leakage and the smaller CO2 molecule resisting leakage. The guestimated impact is an average of $10/year in additional servicing costs.
• Increased vehicle-selling prices due to the higher manufacturing cost of the transcritical CO2 system. Industry estimates are that a CO2 system would be 15-20% higher in manufacturing cost translating into an additional $100 per air-conditioned car at retail.

Table 3-1 summarizes the increased costs on an annual basis.

HCFC-22 has been the refrigerant used in virtually all-unitary air conditioning equipment. As developed countries implement the Montreal Protocol HCFC phase-out, R-22 will not be produced for use in new equipment in the United States, beginning 2010. Table 3-2 outlines the preferred HFC alternatives and likely non-fluorocarbon fall-back technology, for residential and commercial applications.

Table 3-2: Unitary Technology Alternatives

The basic assumption is that in the smaller capacity product categories, propane refrigerant with welded-hermetic compressors would be the preferred technology. These small chillers would be factory assembled and charged. Large commercial unitary would more likely end up using ammonia screw chillers in conjunction with an air handling unit.

The impact on the cost of residential air conditioning is estimated assuming that energy-efficiency standards would dictate equal energy in either case, so that the inherent efficiency disadvantage of a secondary loop would be made up by increased heat exchanger capacity, further adding to the cost. The estimated cost increase is:

• The increased cost of the air conditioning equipment (30%, by industry estimates, TEWI-3) approximately $600 for every residential central air conditioner sold (currently 6 million units per year) to address safety considerations.
• Increased product cost to achieve equal energy consumption - is comparable to the difference in price between a 14 SEER and a 12 SEER system, approximately $500.
• No attempt has been made to estimate the impact on maintenance and repair costs.

Table 3-3: Cost Savings Provided by HFCs for Residential Central Air Conditioning in the U.S.

The focus is on large chiller applications, primarily centrifugal and screw. If HFCs were banned, open-drive screw chillers with ammonia would be the only practical alternative. The incremental costs associated with this situation would be:

• Costs to address safety issues, primarily special equipment room features - emergency ventilation, vapor monitoring and alarms. The costs of addressing the many local and natural code issues is neglected here, but the issues are real, nonetheless
• Higher chiller equipment cost, balanced somewhat by lower refrigerant cost, an estimated net impact of $100/ton for 350 ton chillers and $50/ton for 1000 ton chillers
• Higher energy consumption and costs compared to state of the art screw or centrifugal. Taking chillers in Atlanta as representative, annual electric power consumption would increase by 40,000 kWh for a 350 ton chiller and by 300,000 kWh for a 1000 ton chiller

Table 3-4 summarizes the cost savings that will result from using HFCs, instead of less cost-effective alternatives, to replace HCFCs in chiller applications ($0.07/kWh assumed commercial electric rate).

Table 3-4: Costs Savings Provided by HFCs in Large Chillers in the United States

In supermarkets, the common configuration of central, rack-mounted compressors and cold cases with direct expansion evaporators requires a safe - nonflammable, nontoxic - refrigerant. After the CFC and HCFC phaseouts are complete, several HFC refrigerants meet this need will satisfactorily.

• For low temperature, R404A and R507
• For medium temperature, R410A, and the two that are suitable for low temperature (and HFC-134a, though rarely applied due to the high compressor displacements required)

With these HFCs, supermarkets can choose from the direct expansion, distributed system, and secondary loop configurations. The alternative to this range of HFC options would be a secondary loop system with a central ammonia refrigeration system, assuming that the myriad local code restrictions limiting the use of ammonia refrigeration in urban areas were addressed.

Incrementally higher costs would be incurred in several areas:

• Costs of safety in the mechanical equipment room-ammonia vapor detectors, alarms, and emergency ventilation, together adding about $10,000 to the installed cost of a supermarket refrigeration system. (Not accounting for the potential cost of an operating engineer when codes so require)
• Additional hardware costs of the secondary loop--fluid circulation pumps, fluid reservoirs, the secondary fluid itself, the refrigerant evaporator to chill the secondary fluid. Together, these components will add about $50,000 to the installed cost of a supermarket system
• Increased energy consumption - based on the energy analysis in Section 8, the annual electric energy consumption of the average supermarket will increase by 200,000 kWh. The increased energy is attributable to the heat transfer temperature difference between the central refrigeration system evaporators and the secondary loops and pumping power in the secondary loops

The total of these costs in the U.S. is calculated in Table 3-5. There are 30,000 supermarkets in the U.S. and a total of 4,000 supermarkets are built or remodeled each year.

Table 3-5: Societal Cost Savings Provided in the U.S. by HFCs for Commercial Refrigeration

The costs that would be incurred throughout the rest of the developed world would be similar in magnitude.

Every year, foam building insulation saves substantial amounts of energy, and the cost of this energy, world wide. As the ozone-depleting blowing agents are phased out, HFC blowing agents (compared to other non-ozone depleting options such as hydrocarbons and CO2) will contribute to the cost effectiveness of insulating foams in the following ways:

• Higher R-values, providing increased energy savings with a given thickness of foam, particularly important in thickness constrained applications
• In some applications where fire safety considerations are important, e.g., SPF roof insulation, non-flammable HFC blowing agents will be the most cost-effective alternative

A detailed analysis was beyond the scope of this study; annual savings in the 2020-2030 timeframe attributable to HFC blowing agents in foam are estimated to be $1 billion in the U.S. and $2 billion worldwide.

The HFC solvents that have emerged --- HFC-43-10 mee and HFC-365mfc --- are both either expensive or are being used in blends with higher priced solvents, only in applications where the need for the balance of properties provided by these solvents justifies both the high cost of the solvent and the investment in equipment that provides a high degree of containment. The cleaning applications involved are diverse, so it is difficult to quantify the cost savings delivered by this class of solvents to the market. Qualitatively, it can be stated that these HFC solvents that have emerged as replacements for CFC-113 are used to clean parts whose value is many orders of magnitude greater than the cost of the HFC solvents themselves and the critical cleaning and drying achieved through their use is essential to the performance of these components.

In terms of assessing the value to society of HFCs as aerosol propellants, the range of aerosol applications include applications such as metered dose inhalers where it is difficult to place an adequate value on the health benefit, along with numerous diverse, specialized niche applications where data to quantitatively assess the value is difficult to develop. In section 11 of this report, the social utility of HFC based aerosols is discussed in considerable detail. In summary form, some of the key points are:

Metered dose inhalers (MDIs) require a non-flammable, low toxicity propellant, of which HFCs-134a and 227ea are the only available aerosol propellant alternatives to CFCs, are the mainstay treatment method for asthma and other respiratory illnesses. Millions of patients across the world rely on these lifesaving drug delivery systems. The value, both to these individuals, their families, and to society at large, in terms of quality of life, workplace productivity, and prolonging life is incalculable in monetary terms, but is extremely high.

Dusters, freeze sprays, electronic cleaning sprays, and mold release sprays help provide critical product quality and productivity. HFC propellants improve the functional performance and eliminate potential fire hazards, increasing workplace safety for the individuals involved.

Tire inflators can significantly reduce both the nature and duration of exposure to roadside danger associated with a flat tire.

Insufficient data is available on the diverse installations of HFC based fire protection equipment to generate even an order of magnitude estimate of the economic value of these systems. These systems not only provide for personnel safety, they help to avoid business downtime and to avoid interruption of important emergency and defense services such as air traffic control.

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