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Strict quality control should facilitate market regulation

The main potential of energy efficiency improvement and energy saving lies in the modernization and refurbishment of major sectoral facilities.

Since 2014 tariffs of the natural monopolies have been limited to the level of inflation (this applies, however, only to the last year) and it is believed that this trend will continue for the following five years. Therefore the increase in electricity tariffs is expected to reach 9% in 2015 and 8% in 2016. The industry strives to trim energy costs. The use of energy-saving technologies will inevitably become one of the most effective ways to solve this fundamental problem, and energy-saving LED lighting will play an important role in this rationalization.

As an example, the energy-saving technology based on the use of LEDs as luminaires brings electricity saving of almost 10 times if used to replace incandescent lamps, twice in the case of replacing fluorescent lamps and 1.5 times in the case of transition to LED lamps from sodium-vapour lamps.

Energy saving technologies are especially critical for heavy industry and large production complexes where disregarding this problem would lead to huge financial losses. The saving brought by transition to energy-saving lighting should be regarded as an additional resource of investment into development of production of any scale.

Vadim Valerievitch Dadyka, General Director of AtomSvet, comments on this situation: “One would think – we have the regulations in the Federal Law, requiring Russians to conserve resources, we have market availability for the consumer to choose. However there also are many deterrents. For instance the Russian lighting market, particularly the LED lighting market, could be described as chaotic, in terms of the quality of the marketed products. The domestic market permits any product to be certified, and some designs are simply dangerous to use.”

Any local market follows similar stages in its development. The first stage is chaos. The second one is the initial consolidation, when local players, manufacturers, etc., come forward. At the third stage transnational players enter the market and attack it aggressively by buying out competitors, overwhelming them and driving them out of business, etc. Today Russia is in between the first and the second stage. The last year has shown than many “garage companies” have lost the competitive struggle, have not been able to offer the market quality products. Naturally, a fraction of them have retained some minimal presence in certain market niches; nevertheless generally speaking there are practically no small producers. Now, if a universal national certification centre were built and all the manufacturers are strictly enforced to certify their products, then, according to the author’s opinion, in a year 90% of unscrupulous producers would just vanish. Here is an observation: not a single Chinese producer participated in a major international trade exhibition that we visited last year and the simple reason is that they produce cheap products they cannot certify and, should they certify them, manufacture of such products would become so expensive that the production would be unviable.

Having European certification which means LED luminaires could be sold basically anywhere a company becomes more interested in foreign markets than in the domestic market. For example AtomSvet makes high-quality product and prices it adequately so the rules of the game are clear. In the domestic market our company has to compete with the “garage producers” and the Chinese. We experienced cases when tenders were won by companies with prices half of ours. Their bids were actually priced at less than our production costs. Is there any point in discussing quality of their products? Until the market is set to rights, until substandard low-grade products are denied entry we see no reason at all to tinker in the retail sector. AtomSvet will not founder in a market where no rules apply and where the quality is not supported by the price.

International practice

Today the most advanced country in respect to development and implementation of energy-efficient technologies is Japan. The policy of energy efficiency improvement in the country has a long-standing history that started as early as the 1970s.

In the 1990s energy conservation efforts in Japan expanded to the consumer goods sector, and the Top Runner Programme was launched. The idea is quite simple: product groups are identified for which the Advisory Committee for Energy and Natural Resources determines, based on analysis of the best product specimens, the mandatory requirements from the standpoint of energy efficiency. After that a target year is set. Starting that year characteristics of all the products of the groups present in the market must comply with the requirements.

Typically, there are few “punitive” measures for unscrupulous manufacturers in Japan; they range from publicized recommendations to fines. However in most cases it does not even come to public recommendations: the manufacturers are interested in enhancing the energy efficiency of their products themselves. Energy conservation is now an integral part of lives of the Japanese and the requirements of the Programme are actually just a formalization of the demands of the consumer market.

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