The European Union’s transition to IE2 efficiency low voltage motors
IMS Research has been closely monitoring how low voltage motor efficiency legislation is playing out in each major region, with the most recent transition occurring in the states of the European Union in June 2011. However, mandates that require manufacturers to produce only higher efficiency motors after June 16th within the EU, has not actually come about as smoothly as the industry would like. The increased price tag of the higher efficiency motors is undesirable from the customers perspective, and this has presented more headaches than headway for motor manufacturers.
The regulations mandating the transition are extensive in scope. Exemptions were included in the regulations that were intended to exclude: 1) special or modified motor types, 2) motors that use an atypically low amount of energy due to short-run usage cycles and thus, will not benefit significantly from using a more efficient motor, and 3) motors integrated into a machine to such an extent that measurability of its stand-alone efficiency is difficult to assess.
Unfortunately, the EU regulations are missing a crucial component, and that is how to enforce compliance. NEMA regulations in the US require that an IE3/NEMA Premium motor purchased after December 19th, 2010 be subjected to yearly efficiency tests in order to maintain licensure as a regulatory compliant motor. No such enforcement policy exists in the EU legislation. In addition, EU manufacturers have grown increasingly concerned about low cost “Black Sheep” motors entering the EU market place from Asia with purposely deceptive badge plates that claim the motors achieve IE2 efficiency levels, when in fact, they do not. This creates a situation where a motor buyers can buy a motor that costs 35-40% less than the market average, while falsely believing they are being compliant with the regulations. From all of this, a question arises: What good are the regulations if the manufacturers that willingly comply with them are put at a distinct disadvantage? The solution involves EU duty inspectors implementing more stringent ways of identifying non-compliant motors and periodic testing procedures that maintains a motor’s licensure. These changes would result in sustaining free-market competition in the EU motor marketplace where everyone adheres to the same rules of play.
In 2010, uncertainty about a global economy still emerging from the recession had resulted in increased price sensitivity for EU motor buyers that also identified a significant advantage in the form of side-stepping the legal & administrative entanglements that come with buying a IE2-compliant motor. For some major manufacturers, this resulted in an unexpected increase in orders for slightly modified IE1 motors during the year. Even with a slight modification, these IE1 motors were still significantly less expensive than an IE2 motor. In essence, legislative loopholes were being heavily exploited by motor buyers in order to avoid compliance and to save money. While any business during a sluggish economy is welcomed, this had the unintended effect of delaying the shift of a manufacturer’s production metrics from IE1 to IE2 motors, and left many unprepared to meet the anticipated organic demand for IE2 motors leading up to the June 2011 deadline. Subsequently, some EU manufacturers could not feasibly meet their previous expectations for sales of IE2-compliant motors. Furthermore, small EU manufacturers still heavily vested in IE1 motor technology in 2010 aptly anticipated the increased demand for IE1 motors leading up to the deadline and purposely overstocked their IE1 inventories, hoping that this resistance to change would carry their IE1 sales through 2011 and even into 2012 in some cases.
IMS Research believes that the hurdles encountered during the EU’s transition to IE2 motors is relegated to the short-term, as the sale of IE1 motors in the region will inevitably dwindle no matter what loopholes or inventory methods are exploited. However, these issues and more like them will be revisited when the EU transitions to IE3-compliant motors later in this decade. At that time, motor buyers in the EU will face another hard decision, and this time with the additional option of legislative compliant IE2 motor equipped with a variable speed drive. The verdict is still out on how motor manufacturers and variable speed drive manufacturers will navigate through the regulations and still maximize revenues for these products. Possibly, the more important issue at that time may be how will motor buyers react to inherent loopholes in the legislation, in addition to multiple ways to achieve compliance? Stay tuned to IMS Research’s continuing coverage of low voltage motors and variable speed drives markets to keep track of how this dynamic develops. We will begin to see how these markets could develop starting in 2014.