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PRESS RELEASE: Save Programme Does Not Save as Claimed!


DATE: 23rd APRIL 2012 (MONDAY)


Association of Water and Energy Research Malaysia (AWER) has conducted stakeholder engagement with industry, government agencies and members of public to evaluate the SAVE Rebate Programme (SAVE) implemented under the Economic Transformation Programme (ETP). This study is a part of Sustainable Production and Consumption Project sponsored by British High Commission, Kuala Lumpur.

With SAVE project, the government via Ministry of Energy, Green Technology and Water (KeTTHA) is investing RM50 million to generate an estimated Gross National Income (GNI) of RM5.1 billion by year 2020 and it targets to save 127.3GWh of energy in the same period of time. Towards end of year 2011, the SAVE project was placed under the supervision of Sustainable Energy Development Authority (SEDA) which does not have any jurisdiction over energy efficiency implementation.

What do the stakeholders say?

AWER has conducted a series of consultation with few participating brands in the SAVE project, 2 major hypermarkets and few electrical shops (which asked to be kept as anonymous). Some selected inputs from the participating brands and retailers are as following:
(i) Planning of the SAVE project was with short notice and mechanism was also complicated.
(ii) Implementation of the SAVE project had coordination issues like website was not ready after the launch, support to dealers is lousy and poor response rate.
(iii) Consumers are not aware of the procedures of the SAVE project and go straight to dealers. Dealers also feel no guarantee of getting the money back from the government due to delay in approval and payment.

AWER has also met ST and KeTTHA to have their views about SAVE project. ST has informed AWER that the SAVE project suppose to be implemented by them. However, the policy makers (KeTTHA) have pulled the implementation to the ministry and eventually pass it to SEDA. SEDA is an entity that has no legal obligation or jurisdiction in implementation of Energy Efficiency. The Energy Efficiency implementation has been on a turf fight between head of a sector in KeTTHA and ST. Since this senior officer from KeTTHA was promoted to lead SEDA, the tug of war in implementing Energy Efficiency has also changed its position to between SEDA and ST. Some of the issues raised by KeTTHA during the consultation process are:
(i) Response from public is low in the early stage and the online system took some time to adjust and stabilize;
(ii) Dealers that did not attend the training (roadshows) might face more problems during implementation as they do not understand the procedures;
(iii) Admitted that there was no ceiling price set for products and brands that are participating in the SAVE project; and
(iv) Admitted that no study and comparison of pricing was done throughout the implementation of SAVE project to prevent profiteering via misuse of rebate mechanism.

Comments from AWER on the SAVE Project

(i) Scope of SAVE project - KeTTHA has failed to inform or justify how the target group specification was derived. In addition to that, the changes in eligibility requirements set for air conditioners only indicate that this project is an ad-hoc attempt. Therefore, the scope of the project and its targeted output are vague.

(ii) Selection of product - Air conditioner is not a must in daily life for many. Furthermore, wrongly using 'inverter' type of air conditioners may spike the electricity bills. 'Inverter' type of air conditioners can easily obtain 5 star rating labels due to its high Energy Efficiency Ratio (EER) value. However, these products need to be installed in closed and suitable areas to achieve maximum savings in electricity consumption. Open areas such as living hall or under sized (based on air conditioner's horse power) will lead to higher electricity consumption due to its 'inverter' functions. Based on our consultations with public and retailers, most of the sales personnel do not share this information with consumers as they have no knowledge about it as well.

(iii) Level playing field - AWER's field study shows that the labelling requirements were not followed. Some brands used energy efficiency label that is printed on a normal A4 paper and stick it using a tape on top of the product that is displayed. The colour codes of the labels are far different from the specified colour codes stipulated in the regulation. In addition to that, some brands had the energy efficiency label printed way bigger than stipulated size in the regulation to attract buyers' attention. This becomes a disadvantage and unfair to other brands which complies with the regulation. Complaints made were also left unattended till date.

(iv) Pricing of products are not monitored - One of the core objectives of this project is to reduce the cost of purchasing an energy efficient product. Unfortunately, the implementation of SAVE project did not monitor the actual pricing set at the market. This is admitted by KeTTHA during our consultation with the officials. How would one know if the price offered is the best price? What happens if the businessmen raise the price and rebate based on SAVE project's rebates? This is not rebate but profiteering. AWER is not putting the businessmen's behaviours in bad faith but in business world, profit making is always the priority. Therefore, this is a major factor that makes SAVE project a questionable one as it does not prevent profiteering.

(v) SAVE project promotes to increase electricity consumption - When this project was launched, it targeted buyers with electricity consumption within 200 to 400 kWh. Consumers that fall within this electricity consumption range are possibly a family that already have 1 air conditioner, a fridge with all the other basic electrical items at home. If a new air conditioner is purchased, the overall electricity consumption of this family will increase. For family that has no air conditioner, their electricity consumption is always lower. Now, their electricity consumption will definitely increase if they purchase a new air conditioner. Besides this, SAVE project is not a replacement programme for old and inefficient products that are already in use. It is a sales oriented project. Therefore, the project indirectly has increased overall electricity consumption for domestic sector in Malaysia which defeats its objective to reduce electricity consumption.

Recommendation and Conclusion

Overall, this project could have been implemented with high impacts and benefits to the people and businesses if planned in detail. Unfortunately, office politics within KeTTHA and its agencies as well as ad-hoc implementation has caused SAVE project a failure and basically did not make much change in improving understanding of energy efficiency.

AWER recommends the following to be carried out:
(i) Auditor General should audit the entire project and its actual achievements. There should also be a cost benefit analysis and the overall cost of the project including human resource, website, roadshows and other 'promotional' expenditures versus project’s outcome. There should be clear measurement of achievements and the report should be made public.

(ii) The implementation of Energy Efficiency must be carried out by ST as stipulated in Energy Commission Act 2001 in section 14 (1) (a), (b), (d), (e), (g), (i) and Electricity Supply Act in section14 (l), 14(la), 23A, 23B and 23C. The policy maker (KeTTHA) or unauthorised agencies (SEDA or others) should not interfere in the implementation of energy efficiency. The minister of KeTTHA must step in to prevent failure of energy efficiency implementation in Malaysia. Act now before it enters the point of no return.

(iii) Implement Minimum Energy Performance Standards (MEPS) for both refrigerators and air conditioners immediately. ST has the power to implement MEPS anytime. MEPS is the most effective way to remove inefficient energy consuming products from the market and it is easier to be implemented for a wide range of products in a short period of time. Many countries in Asia Pacific have already implemented it; Malaysia is way behind Thailand and Singapore in MEPS implementation.

(iv) Enforcement of labelling is vital. The government must provide level playing field to all energy efficient product manufacturers, retailers and dealers to ensure the energy efficient products' market grows. Unfair treatment will deter the growth of energy efficient products market.

Failure to implement these steps will keep Malaysia performing badly in energy efficiency. The most important task for the Minister of KeTTHA is to ensure no policy maker or other unauthorised entities interfere with the functions of ST. We urge also ST, PEMANDU and Ministry of Finance (MoF) to adopt the recommendations in this study to improve the deliverables and increase the potential impacts to people and the country via Economic Transformation Programme (ETP). SAVE project is a good initiative but the current implementation is a total failure.

Piarapakaran  S.
Association of Water and Energy Research Malaysia (AWER)

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