Global Efficiency Medal (GEM)

SEAD was initiated in 2011, and SEAD’s Global Efficiency Medal (GEM) award scheme was launched one year later. The GEM scheme is the first competition and awards scheme that directly reaches out to four huge consumer markets. Appliance energy efficiency can help these countries reduce or contain electricity demand. While the USA and the EU have already been able to moderately lower final electricity consumption between 2007 and 2011 (-1% and -2%, respectively), consumption in Australia and Canada has increased by 5% and 3%, respectively. India, as an emerging economy, has been experiencing steep increases by 34% in that period (IEA 2014).
The GEM scheme focuses on energy consuming appliances and equipment that contribute a large share to the world’s energy consumption. TVs, accounting for 3% to 4% of global residential electricity consumption, were the first category approached by SEAD GEM (CLASP 2014).
In its third year, 2014, SEAD GEM tries to increase the efficiency of electric motors, which in 2006 accounted for 43% to 46% of total electricity consumption (Waide & Brunner 2011).
Especially in India, penetrating the market with energy efficient products is crucial in order to mitigate future electricity demand growth.

For the working group on the Global Efficiency Awards, Ravi et al. (2013, p. 1720) identified seven objectives:

1. Increasing energy efficiency of products in the market
2. Increasing the market share of energy-efficient appliances
3. Accelerating the innovation cycle of manufacturers
4. Harmonising test procedures
5. Enhancing capacities of test labs
6. Providing comparable and transparent test results
7. Supplementing standards and labelling activities

It is a supra-national measure including representatives from the four target regions: Australia, Europe, India and North America. Japan is also a member of the working group. China has an observer status.

The types of appliances and equipment, for which the award is presented, change every year.

Relevant sectors

• Residential
• Services
• Industrial

• Refrigerators and freezers
• Television
• Monitors
• Computer
• Electric motors
• Distribution transformers

Although the GEM award scheme could be used for each of bigEE’s appliance product groups as well as for some building technologies, SEAD has concentrated on a few categories (commercial refrigerators, television, computer and monitors, air conditioners, lighting, electric motors, distribution transformers) and on network standby (CLASP 2014a).

The primary objective of SEAD is to increase the incentive for deploying innovative, energy efficient equipment on the market. Moreover, it helps consumers to identify energy efficient products.

Based on SEAD’s official information documents for manufacturers (cf. 2012 Television Awards Competition Official Rules, CLASP 2012; Display Awards Competition Official Rules, CLASP 2013a) there are no minimum energy efficiency requirements established. While this increases the number of potential applicants, a risk remains that less efficient products receive the GEM if manufacturers of highly efficient products do not participate. Absence of those products from the competition may be a result of other requirements set by SEAD (e.g. regional market availability criteria) or failure to meet application deadlines.

Relevant target groups

• Manufacturer Both, component manufacturers and original equipment manufacturers are targeted by the GEM award scheme in order to produce highly energy-efficient equipment and appliances.
• Non-governmental organisation Further organisations such as the Alliance to Save Energy, EPEAT (Electronic Product Environmental Assessment Tool) or TopTen USA have become involved in the GEM awards scheme in order to multiply efforts and increase the awareness of GEM (CLASP 2014b)

Direct beneficiaries

• Manufacturer

  Winners of the award scheme (i.e. component manufacturers or original equipment manufacturers) receive valuable “recognition from energy ministers and international marketing and promotional efforts” (Ravi et al. 2013, p. 1722). A monetary prize is not included. If the positive PR translates into increased sales of GEM awarded products, manufacturers also benefit from increased revenues and profit margins (attached to premium products)

• Investor

  Investors, who are also users of the award-winning appliances or equipment, benefit directly by saving energy costs. The media attention of the GEM scheme raises the attention of investor-users, who may opt for energy efficient appliances. Moreover, more energy-efficient products may become available on the market.

Relevant barriers

• Economic and financial barriers: The GEM award scheme mitigates economic risks associated with the production of expensive energy-efficient appliances by raising the public’s awareness to the award winner, which, ideally, should result in increased sales of the respective product.
• Lack of interest and motivation in energy efficiency-improvement: By holding out the prospect to gain political and public recognition and to increase profit by selling energy–efficient premium products, SEAD creates important incentives for manufacturers.

Relevant incentives

• Unique selling proposition for suppliers: The GEM award scheme is based on winner-takes-all competition. In particular the winner of the global competition is able to sell a unique product and can use this as a selling argument in four large sales markets.
• Directly increasing earnings or profits for actors on the supply side: Manufacturers can increase profit margins by selling premium priced energy-efficient products, in particular, because of the unique selling proposition.
• Improved reputation: The prize for the GEM-winners and, attached to it, the political and public recognition in several countries contribute to the overall image of a company.
• Saved energy costs: Awarded technologies save energy costs and, ideally, the higher costs for products amortise within the product’s lifespan. This makes an awarded product more interesting for (retailers and) consumers.

The Super-Efficient Equipment and Appliance Deployment (SEAD) initiative supports its member states in implementing five major elements of the policy package for energy efficiency in appliances and equipment: awards (i.e. the GEM scheme), financial incentives, public and co-operative procurement, as well as minimum energy performance standards and energy labels. SEAD also supports the necessary technical analysis.
Together the individual working groups on incentives, procurement and awards attempt to increase the demand for energy efficient appliances. Information regarding standards and labels is exchanged in the respective working group, while an analytical foundation is created by the working group on technical analysis (Ravi et al. 2013, p. 1720).
The individual members have implemented further instruments in order to increase the market penetration of energy-efficient appliances.
An analysis of the policy package of the USA is available here.

The policy includes innovative elements.
Large-scale international co-operation is the first main innovative feature of the GEM scheme. The four regions participating in the scheme represent a large share of global markets for appliances and equipment, which will increase the incentives for manufacturers to participate as well as the market impact of the scheme.
The second main innovative feature of GEM is the fact that in all four regions, the same test method and metric has to be applied to measure the energy efficiency of a product, so that measurement results are objective and comparable.

The following pre-conditions are necessary to implement the Global Efficiency Medal:
Agencies or other actors responsible for implementation
Implementing an international award competition needs either an international agency (such as UN institutions or the International Energy Agency) or an agreed collaboration of participating countries. The latter has the advantage of direct ownership of these countries, which may improve commitment, but also the risk of fluctuating engagement. For GEM, the Super-Efficient Equipment and Appliance Deployment (SEAD) initiative’s Working group 2 on Global Energy Efficiency Awards is responsible for the scheme’s implementation.

Funding
SEAD’s budget is USD 20 million for five years. For the initial phase, the USA and Sweden have allocated USD 4 million and USD 135,000, respectively. Information on how much of the total funding amount has been allocated to Working Group 2 and the GEM scheme is not available.
SEAD participants also support the initiative with technical and policy experts (Pantano 2011, p. 2).
Verification testing for products is paid by SEAD participants, as well (Ravi 2013, p. 1723). However, manufacturers must provide samples to testing facilities (CLASP 2014c, p. 3).

Test procedures
The exact test procedures depend on a) the product group and b) on the method to test the respective product group. The Working Group publishes so-called “Official Rules” documents showing the product criteria and test methods (cf. CLASP 2012 for TVs or CLASP 2013a for computer displays).
For example, with regard to displays “[t]he primary metric for evaluating product performance in the competition shall be power consumption per unit screen area during normal “on” mode (i.e., W/cm² or W/in2)” (CLASP 2013a). In this specific case, the Version 6.0 Energy Star Product Specification for Displays is the guiding document for the assessment. The Energy Star is a voluntary energy label focussing on office equipment now implemented by many countries globally. For the television award scheme, IEC 62087, an internationally accepted testing procedure, formed the assessment basis.
As test laboratories need the same testing procedures, it is necessary to identify adequate facilities by checking whether their methods comply with international standards.

A working group that consists of representatives from the regions (e.g. energy agencies or ministries) decides upon GEM’s design and the product group specific award criteria. The working group selects the product group, identifies the most common test methods and classifies product group subcategories.
According to Ravi et al. 2013 several aspects are crucial for the success of the measures:
First, it is necessary to consult industrial stakeholders in order to a) gain market information, b) raise their awareness for the award scheme and c) gain trust by the manufacturers, which have to submit confidential information (particularly, those participating in the “Emerging Technology” competition).
Second, timelines for the launch of the competition, the submission of product proposals and the award ceremony must be set. Venues for the launch and the ceremony should be carefully identified with the idea in mind to raise the media’s attention. For example, the GEM scheme was announced at the Consumer Electronics show in Las Vegas (USA) and the European GEM was awarded at the International Consumer Electronics Fair (IFA) in Berlin (Germany).
Third, with regard to product testing a) SEAD member states pay the costs and b) regional test facilities are used in order to avoid time- and money consuming shipping routes to a single test laboratory.
Fourth, in order to evaluate whether test laboratories meet required standards, test labs themselves are assessed.
Fifth, in order to target the crucial audiences, the Working Group commissioned the development of a communications strategy.

International co-operations
The SEAD initiative is an international collaboration between 16 partner countries, plus China having an observer status. Working Group 2 on Global Energy Efficiency Awards consists of representatives from seven member states, who design the measure. SEAD’s regional GEM scheme is awarded in North America, Europe, India and Australia and the international GEM scheme identifies the most efficient product from the regional winners.

Actors responsible for design
SEAD Working Group 2 on Global Energy Efficiency Awards is responsible for designing the SEAD Global Efficiency Medal awards scheme.
The Super-Efficient Equipment and Appliance Deployment (SEAD) initiative was introduced by the Clean Energy Ministerial (CEM), which is “a high-level global forum to promote policies and programs that advance clean energy technology, to share lessons learned and best practices, and to encourage the transition to a global clean energy economy” (CEM 2014a). Most of the CEM members also participate in SEAD, where the United States of America (USA) and India are in the lead (CEM 2014b).
The Collaborative Labeling and Appliance Standards Program (CLASP) is the operating agent of the SEAD initiative. The SEAD initiative is subdivided into five core activities (technical analysis, awards, incentives, standards and test procedure coordination, procurement).
While CLASP administers the activities, working groups are in charge of activity management and measure design. Working group 2 on Global Energy Efficiency Awards consists of representatives from seven SEAD participants: Australia (Department of Industry), Canada (Natural Resources Canada), India (Bureau of Energy Efficiency), Japan (Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry), Sweden (Swedish Energy Agency), United Kingdom (Department of Energy & Climate Change) and United States of America (Department of Energy).
In particular, the awards working group is responsible for establishing competition objectives, competition requirements (e.g. target product, test methods) and further competition design features (e.g. sizing of sub-product groups like small, medium and large TV screens) (Ravi et al. 2013).

Actors responsible for implementation
Working Group 2 also implements the awards scheme. Regional testing facilities are responsible for verifying energy efficiency information submitted by manufacturers.

Monitoring
While test labs check for the energy performance of preselected products winners, there appears to be no institutionalised monitoring that traces the sales of GEM winners.

Evaluation
CLASP publishes documents on the energy efficiency performance of the regional and international winners in comparison to the average product on the market (cf. CLASP 2013c). Calculations then show the products’ energy savings potential, if only products are bought with the energy efficiency performance of the winner. Evaluations on the realised impact on energy consumption have not been published yet.

• Dynamic market transformation and/or innovation: The core idea of the award scheme is to achieve a higher penetration of energy efficient appliances in the market. However, each year the GEM scheme focuses on a new product category. This means that market transformation impulses resulting from SEAD for respective product categories are nonrecurring.
• Avoiding lost opportunities: By promoting best commercially available technologies, SEAD’s GEM scheme tries to avoid lost opportunities. However, SEAD has limited the number of participants by including a sales/ market availability requirement for product groups. Thus, the GEM winning product may not necessarily be the most energy efficient product in the market but only the most efficient one, that meets the sales criteria (Ravi et al. 2013). On the other hand, the SEAD initiative organises an “Emerging Technology” competition, which promotes best not yet available technologies.
• Minimising rebound effects: Rebound effects may arise if award winning products are used more frequently or intensively. Education and information campaigns can reduce the risk for rebound effects, but SEAD does not have a working group active on that topic. Thus, participating governments need to take action on this issue. There may also be rebound effects due to increasing size of TVs and other appliances. For minimising these, progressive standards provide a solution. These set lower specific energy consumption requirements for larger sizes, or even a maximum absolute energy consumption value per unit of appliance.
• Minimising snap-back effects: Minimising snap-back effects The GEM scheme focuses on a new product category for only one year. This means that market transformation for single product groups are nonrecurring. However, snap-back effects should be addressed with additional policy instruments. Standards and labels can reduce the risk. Several SEAD members have standards and labels already implemented and a working group within the SEAD framework also works on the issue of implementing and harmonising such measures.
• Minimising free-rider effects: There are no measures in order to avoid free-riding. As only the most energy-efficient appliances will receive an award, free-riding is not a big issue here anyway.
• Creating Spill-over effects: Regarding TVs, in Korea GEM is considered to have spurred “standards to become more stringent” (CLASP 2013b). India has updated its international test standard for TVs “[a]s a result of participating in the first SEAD Global Efficiency Medal competition“ (CLASP 2013c). This spill-over will create additional energy efficiency improvements. Award-winning manufacturers may decide to also use energy efficient technologies for other product groups, as well, e.g. in order to increase their reputation.

Design for sustainability aspects
In general, the focus of the policy is on energy efficiency. However, the working group can decide on the criteria and methodologies to identify winners. The working group could broaden the focus to other aspects of sustainability, such as resource efficiency.

Co-benefits
New test labs were built, resulting in increasing testing capacities, in India, China and the Philippines (CLASP 2013b; CLASP 2013c).
Apart from that, Indian test lab staff, which formally used an old testing method, has been trained using the latest version of the TV assessment procedure, IEC 62087 (Ravi et al. 2013, p. 1725).

SEAD calculates energy savings in comparison to other products of the same category.
Regarding TVs a report (Park 2013, p. 8) shows, that the award winner is 22-59% more energy-efficient compared to TVs with comparable technology and 32-71% more efficient compared to TVs using conventional technology. For the ideal case, that every new TV sold is as efficient as the winning product, the report estimates that 84.6 TWh could annually be saved by 2020 (Australia: 2.9 TWh, Europe: 17.2 TWh; India: 5.4 TWh; North America: 18.6 TWh). Global cumulative savings between 2013 and 2020 would then be close to 400 TWh (Park 2013, p. 23). If every new TV is even as efficient as the award winner of the “Emerging Technology” category, it would create additional savings of 12 billion KWh per year.

Regional and global savings potential for efficiency improvement in SEAD TV Awards, Source: Park 2013, p. 24

For computer displays, SEAD estimates that 15 TWh could be saved by 2020 annually. The winning products of that category are 53% more efficient than monitors with similar technology.

For the North American case, Park (2013, p. 25) compares GEM winning televisions to those of the same category (small, medium, large).
It is noticeable that GEM winners of the small- and medium sized category are cheaper than their “typical” counterparts while also requiring less energy. For the large-sized category, the purchasing price is USD 919 higher as that of typical counterparts (USD 845) but requires only 44.5 watt instead of 92.2 watt.

Based on Park (2013, p. 15)

SEAD’s overall budget is considered to be USD 20 million for five years excluding technical and policy experts supporting SEAD. However, information on the costs of the award scheme is not available.
The costs for market actors are negligible, as they can participate with products already available in the market or with products that are about to enter the market. This means that manufacturers can but do not have to invest additional amounts in R&D. However, manufacturers must provide test labs with sample products once they have been selected a preliminary winners.
For the North American region and the TV-award scheme, Park (2013, p. 25) shows that sales prices of the award-winner and the average price differ only regarding the large-size TV category. Prices of the award-winners in the other categories (small and medium size) are even below the average market price.

A cost effectiveness analysis only exists for TVs (as of April 2014). In his study, Park (2013, p. 9), including only data from the North American region, points out that “winners in the small and medium category are certainly cost effective while winners in the large size category are also likely to be cost effective.”
The small-sized TV winning the GEM costs USD 260 requiring 22 watt. A comparable TV in the USA costs USD 278 and uses slightly more energy (29.2 watt). Similarly, in the medium-sized category the award winner costs with USD 548 less than typical TV (USD 566), while consuming significantly less energy (44.1 watt vs. 64.9 watt). Energy savings are, therefore, not accompanied with additional investment costs for more energy-efficient equipment. The investor will save money from the first day after purchase.
Regarding the winner of the large TV category, investments costs are similar or higher than the average market price but energy costs will be lower due to the lower energy consumption. The GEM winner costs USD 919 and consumes 44,5 watt. In contrast to that a typical model in the U.S. market costs only USD 845 but with 92.2 watt requires twice the amount of power.
In the USA and other countries electricity rates vary, thus, the location of the TV user influences the pay-back period. For example, in the State of Washington (USA), the average residential electricity prices are around USD 0.08 per kWh (€ 0.06/kWh), while in Hawaii prices are four times higher. Therefore, in Hawaii, the U.S. state with the most expensive kWh prices, the pay-back period is shorter than in other federal states of the USA.