Cold Chain - Solar Direct Drive Refrigeration Systems: Product Profiles, Availability and Guidance. UNICEF Supply Division

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1 Cold Chain - Solar Direct Drive Refrigeration Systems: Product Profiles, Availability and Guidance UNICEF Supply Division March

2 Solar Direct Drive Refrigeration Systems Product Profiles, Availability & Guidance March 2015 Solar refrigeration systems, in particular direct drive technologies, play an important role to ensure a reliable cold chain in an end-to-end supply chain of vaccines. UNICEF summarises the latest information on solar refrigeration products, the market situation and UNICEF s current engagement in this product category. A more recent note covering solar direct drives exists. Please visit 1. Summary UNICEF procures Solar Direct Drive (SDD) refrigerators as a more sustainable and reliable option to improve cold chain refrigeration management and optimization in areas with unreliable power supply. SDDs address some of the challenges of alternative technologies, which include higher maintenance requirements, recurring costs, as well as available reliable power supply. UNICEF and partners are supporting the scale-up and access to essential cold chain technologies to meet increased cold chain requirements, driven by new vaccine introductions and efforts to modernise existing cold chain infrastructure. UNICEF procures a range of SDD models from several suppliers to meet country requirements. The current supply of different SDDs is able to meet growing country requirements. However, country demand forecasts are generally inaccurate and subject to limited funding availability. UNICEF s procurement strategy seeks to ensure a sustainable supply of affordable products at lower weighted average prices (WAP) compared to 2013, and to reduce the procurement cycle lead times by 4-5 weeks. Long-term arrangements (LTAs) with suppliers will be finalised during 1Q 2015 and will ensure a reduction in supply delivery and response times, increased price stability and transparency, as well as uninterrupted, sustainable and affordable supply. 2. Background & Recent History Since the launch of the Expanded Programme on Immunization (EPI) in 1974, global immunization programmes are one of the most successful and cost-effective health interventions known to date. 1 Immunization programmes depend upon fully functional national cold chain systems to ensure the proper delivery and storage of vaccines, while maintaining quality and appropriately managing costs. Effective cold chain systems require efficient vaccine storage, handling and stock management to maintain vaccines under strict temperature control of between 2 C and 8 C (for almost all vaccines). However, despite the achievements of global immunization programmes, national cold chain equipment in some locations is ageing, underperforming or no longer optimal, straining to cope effectively with the recent surge in increased demands from new and bulkier vaccine introductions. Temperature monitoring equipment, cold and freezer rooms, refrigerators, freezers, cold boxes, vaccine carriers, ice packs, accessories and spares are required to ensure a fully functional cold chain system to maintain temperature sensitive products at specific temperatures. Table 1 describes the different cold chain refrigeration technology used in refrigerators and freezers. 1 World Health Organization, Global Vaccine Action Plan , WHO, Geneva, 2010, p.5. 1

3 Off-grid On-grid Table 1 Different Refrigerator and Freezer Technology and Considerations Segment Technology Image Description Considerations - Powered by mains electricity. Compression - Recommended in areas with +8 Refrigerators hours / 24 hours. / Freezers - Inexpensive. - Low maintenance. and skilled technicians. Absorption Refrigerators / Freezers Conventional Solar Battery Powered Storage (BPS) Solar Direct Drive (SDD) Source: UNICEF Supply Division. - Powered by electricity and either kerosene or gas. - Standard technology pre-2013 in appropriate areas. - Dependent on spares. - Requires regular maintenance. - Powered by batteries charged by solar-energy. - Used where sunshine is abundant. - Solar technology bypassing the use of batteries. - Based on non-battery phasechange material (PCM); waterlined; ice-lined or ice-bank technology. - Areas with intermittent power rarely guaranteed +8 hours / 24 hours. - Requires maintenance, funding - Sub-optimal functionality. - High running costs. - Fuel supply dependent. - Requires maintenance, funding and skilled technicians. - Installation dependent on site selection; solar panel orientation; system sizing; component specifications and meteorology. - Installation within 6 months of shipment. - Requires recurrent battery replacement, maintenance, funding and skilled technicians - Limited data available on field performances. - Simple maintenance. - Cheaper solar than BPS. - Simple to install. Absorption refrigerators have until 2013 been considered the cheapest option of choice, based on purchase price, in resource-limited settings where mains electricity supply has been limited and unreliable. However, a number of challenges encouraged the need to promote the use of alternative technologies. Table 2 describes the challenges of using absorption refrigerators. Table 2 Absorption Refrigerators Considerations and Challenges Considerations Fuel supply cost Cooling efficiency Fuel supply availability Temperature maintenance Equipment maintenance Environmental considerations WHO prequalification Source: PATH. 2 Challenges Gas and kerosene supply is expensive over the long-term. Absorption technology is less efficient than electric compressor technology. Fuel supply is a precious high-value resource and availability is subject to interruption and vulnerable to alternative use diversion. Strict temperature control between 2 C and 8 C is difficult to maintain using absorption technology and it exposes vaccines to the risk of warming or freezing. Absorption technology requires skilled technicians, regular maintenance and funding to ensure optimal performance. Carbon based fuel emissions contribute to global warming. So far, no absorption based technology refrigerators / freezers have met WHO prequalification specifications and verification protocols to be listed under PQS. 2 Program for Appropriate Technology in Health, Direct-Drive Solar Vaccine Refrigerators - A New Choice for Vaccine Storage, PATH, Seattle,

4 UNICEF, together with partners, has been supporting global efforts to phase-out cold chain absorption refrigerators and freezer technology in favour of more sustainable solar powered refrigeration systems in various ways. In 2001, the World Health Organization (WHO), the United Nations Environment Programme (UNEP), the Danish Teknologisk Institut (DTI) and Greenpeace, in collaboration with UNICEF, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ GmbH), the Program for Appropriate Technology in Health (PATH) and industry, launched the SolarChill Partnership. The SolarChill Partnership supported the development of a new sustainable solar-based technology that bypassed the need to use a battery-powered solar-based refrigeration system. SDD technology offers improved functionality, environmental impact considerations and reduced demand on human and financial resources as SDD refrigeration systems have significant advantages compared to BPS products. SDDs do not depend on the timely replacement of batteries, which have a relatively short lifespan (3-5 years). The selection of the most appropriate cold chain technology for a given country programme depends on careful analysis and evaluation of products and supply chain requirements. Solar technology is not a universal solution to all the cold chain challenges, as it demands at least 3.5 kwh/m 2 of solar irradiation per day. UNICEF provides a Cold Chain Support Package (CCSP), which provides commercial and technical information to ensure an efficient and effective procurement process for CCE products and services. UNICEF first supplied SDDs in 2007 for piloting purposes, and the first technologies were WHO prequalified in To date, performance, quality and safety (PQS) listed SDDs use four different technologies to store the energy, each categorised according to the technology that drives the cooling system, i.e., phase change material (PCM), ice- or water-lined and ice bank technology. UNICEF does not distinguish SDDs according to their technology, but rather according to their capacity (in litres) and whether destined for use in temperate zones (+32 C) or hot zones (+43 C) (Table 4). 3. Current Market Situation 3.1 Demand Figure 1 SDD Models Procurement and Forecast through UNICEF Source: UNICEF Supply Division. 3

5 The demand for SDD refrigeration systems has been growing since Procurement through UNICEF has increased from 230 units a year in 2011 to approximately 3,000 units in 2014 (Figure 1). Total 2015 tendered forecast volumes initially reached 3,460 units. An additional year-end (2014) forecast based on country data provided to UNICEF identified significantly higher offtake in 2015, with revised needs of just over 9,800 units. Increased country awareness, sensitization and promotion by partners and industry likely account for this significant increase. SDD refrigerators with <30 litres capacity account for ~50% of the 2014 procured volume. New vaccine introductions, increased product availability and advocacy efforts promoting the use of SDDs account for the increase. However, there is at present limited available performance data to demonstrate the evidence of improved costefficiency and effectiveness of SDD technologies. Forecast accuracy remains a challenge for many countries due to a combination of factors, including deficiencies in country needs visibility, funding availability, country equipment inventory and maintenance and replacement plans. Not all countries are aware of the full range of available products and their respective benefits, which is necessary to advise and forecast optimal procurement choices and decisions. The market for SDD cold chain equipment is also fragmented and not all procurement goes through UNICEF procurement channels. Table 3 describes the procurement forecast for 2014 through 2015 and highlights the difference between 2014 forecast and actual offtake. UNICEF has undertaken detailed forecast and offtake analysis by funding source in order to gain a better understanding of the forecast accuracy for the different SDD products. UNICEF will review the analysis during 1H Table 3 UNICEF SDD Tender versus Procurement Volumes 2014 SDD Product Categorisation Tender volumes 2014 Procured 2014 Tender volumes 2015 Total tender volumes SDD Refr. System <30l 2,160 1, ,260 SDD Refr. System 30-60l 2, ,535 SDD Refr. System 60-90l SDD Refr. System l ,100 1,470 SDD Refr. System >120l Sub-Total 5,305 2,212 1,900 7,205 SDD Refr./Freezer System <30l SDD Refr./Freezer System 30-60l SDD Refr./Freezer System 60-90l SDD Refr./Freezer System l , SDD Refr./Freezer System >120l Sub-Total ,560 2,410 Total 6,155 2,907 3,460 9,615 Source: UNICEF Supply Division. 3.2 Supply UNICEF recently concluded a tender and will finalise its first LTAs with suppliers during 1Q The LTAs will ensure a reduced procurement cycle lead-time, price stability and transparency, as well to ensure an uninterrupted sustainable supply of affordable quality SDDs. UNICEF procures SDD refrigerators prequalified by WHO. Detailed information on those SDDs is available here. Fourteen SDD refrigerators and combined refrigerator / freezers from seven suppliers have passed WHO PQS standards and are WHO prequalified. Table 4 describes the range of different sized prequalified SDD refrigerator/freezers destined for temperature zones (+32 C) and hot zones 4

6 Hot Zone (+43 C). The production capacity of WHO prequalified suppliers has doubled over the past year from ~2,000 to ~4,000 units a month (August 2014). Temp. Zone +32 C Table 4 WHO Prequalified SDD Refrigerators and Combined Refrigerators and Freezers +43 C Supplier Model Refrigerator Net Storage Capacity (litres) Freezer Net Storage Capacity (litres) WHO Prequal. Dulas (UK) VC200SDD SureChill (United Kingdom) BLF100DC Zero (South Africa) ZLF100DC Dometic (Luxembourg) TCW3043SDD Dometic (Luxembourg) TCW2043SDD Vestfrost (Denmark) VLS SunDanzer (United States) BFRV Dometic (Luxembourg) TCW40SDD SunDanzer (United States) BFRV15SDD Vestfrost (Denmark) MKS Haier (China) HBC Dometic (Luxembourg TCW2000SDD Dometic (Luxembourg) TCW3000SDD Multizone Dulas (UK) VC150SDD Source: WHO. 4. Issues / Challenges Current demand forecasts remain inaccurate and are not sufficient to provide suppliers with any secured offtake visibility. The lack of accurate and updated in-country cold chain equipment inventories, including maintenance and replacement plans remain an important challenge. They are required to determine the annual forecast needs of ideal equipment necessary to improve cold chain effectiveness. Despite current efforts to highlight and promote the advantages of the SDD technology based on the technology s improved functionality and reduced human, management and financial resource requirements, there is to date limited long-term evidence-based performance data, including maintenance needs and mean time-to-failure to demonstrate the evidence of improved costefficiency and effectiveness of SDD technologies. Performance data currently collected will be subject to a performance evaluation consultancy during 2H It will assess the comparative advantages of SDDs to other technologies used in similar contexts, including absorption and BPS refrigeration. Not all countries are aware of the full range of available products and their respective benefits, which is necessary to advise optimal procurement choices and decisions. 5. Steps Forward UNICEF will continue to work with partners to support the scale-up of supply, demand, access and utilization of new sustainable technologies, including SDD refrigeration systems, to meet the need to modernise and improve the quality and range of existing cold chain supply equipment. UNICEF issued a Request for Proposal (RFP ) on the 3rd October 2014 for SDD LTAs, which closed on the 5th of November LTAs will be finalised by 1Q 2015 and meetings will be scheduled with successful suppliers following the awards. 5

7 For further questions or additional information, please contact: Helene Moller Annika Salovaara Aadrian Sullivan Chief, Health Technology Centre Contracts Manager Information Management UNICEF Supply Division UNICEF Supply Division UNICEF Supply Division Other UNICEF information notes can be found at: 6