EU to pull plug on capital allowances?

London - A new EU rule requiring all new industrial motors meet minimum energy efficiency standards has created uncertainty over the position of equipment that currently qualifies for support under the Enhanced Capital Allowances (ECA) scheme.

The EU regulation, which is being introduced in June, will require all motors to meet minimum efficiency standards under the recently introduced IEC60034-30: 2008 - a harmonised standard to test motor efficiency that rates motors IE1, IE2 or IE3. (See panel, below)

There are a number of exclusion areas, including motors used in ATEX applications, in uses above 400°C and brake motors. Overall, though, the EU estimates that the legislation will lead to annual electricity consumption savings of about 135TWh by 2020, corresponding to an annual reduction of 63 million tonnes of CO2 emissions, and electricity savings of Euro9 billion by 2020. eliminate many types of equipment from support under the ECA scheme, which essentially allows business to write-off the entire capital cost of investment in the top 15-20% most efficient, energy-saving products on the market against their taxable profits.

Among those that should be most in the know, Ben Martin, financial services technology manager at the Carbon Trust said: "The ECA scheme for energy-saving technologies only supports EEF1 motor technology, which we believe, based on current available information, is broadly equivalent to IE2 motors.

"So the impact of the EU energy efficiency rules, and in particular the ban of motors below IE2 in 2011, will have little immediate impact on the ECA scheme. "

However, Martin was less certain about the impact of Phase II of the regulations in 2015, saying that the Carbon Trust would continue to assess the impact of the IEC standards on listed motor technologies. The group, he added, would make any necessary recommendations to government to alter the Energy Technology List criteria for motor technologies to ensure they continue to track targeted technologies.

Not surprising, therefore, that a spokesman for the Rotating Electrical Machines Association (REMA) described the situation as unclear. However, he did expect that some impact would be felt in 2015 when at least some IE3 motors are likely to be removed from the ECA list.

For his part, Steve Brambley, deputy director of GAMBICA, noted that Carbon Trust policy is to set the criteria for ECAs above any legal minimum requirements, to encourage 'better than minimum' efficiency products on the market. "Therefore the likely impact of the EuP regulations requiring minimum IE2 motors in 2011 means that ECA criteria would be higher than this, and the same step when IE3 motors are the minimum in 2015," said Brambley.

With regard to variable speed drives, Brambley said VSD criteria for the ECA scheme did not specify efficiency, so the impact would not be so direct.

"Therefore we would expect VSDs to continue to be on the ECA list at least until 2015, the point when IE2 motors require a VSD by law," said Bramley. "Then perhaps VSDs would not qualify for the ECA scheme. It is not clear, however, because the criteria cannot specify the type of use for the product, so this would mean all VSDs are either in or out, not only those for use with IE2 motors."

Given the potential for carbon savings by using VSDs, Brambley said that GAMBICA would continue to campaign for improved promotion from government and agencies such as the Carbon Trust.

Please email your views to the editor: patrick.raleigh@centaur.co.uk


Regulation phase-in schedule

Under the EU rules motors are rated as: IE1 standard efficiency (roughly equivalent to the existing EFF2 in Europe): IE2 high efficiency (similar to EFF1); and IE3 premium efficiency (a new efficiency class).

- Phase 1 (from 16th June 2011) motors must meet IE2 

- Phase 2 (from 1st January 2015) motors with a rated output between 7.5 and 375kW must meet IE3 if single speed or IE2 if used with a variable speed drive 

- Phase 3 (from 1st January 2017) motors with a rated output between 0.75 and 375kW must meet IE3 if single speed or IE2 if used with a variable speed drive