The last twelve months have seen an upsurge in market confidence and business, as well as well as legislation driven research and development. ACR News asks five people from across the industry what their views are on the road so far, as well as what the future might bring.

The last ten years have been a global rollercoaster of challenges affecting the acr industry as much as any other sector. 

“The industry has certainly had a bumpy ride since the global financial crisis of 2007/2008, which caused a recession that lasted into early 2013,” says consultant Philip Sloper. “As a result there have been many casualties in our industry, perhaps the most high profile being WR Refrigeration who almost survived the recession only to fold in October 2013 owing over £80m and with the loss of 240 jobs. 

“After such a long drawn out period of stagnation, the UK refrigeration and air conditioning market showed clear signs of revival in the second half of 2013, boosted by a period of hot weather late in the summer, and this revival continued into 2014.”

“As a distribution business we have naturally seen a rise and fall in demand in recent years, and the financial crisis that led to the slowdown of the construction sector in 2007 was bound to have an impact on our industry for a period of time,” says Andy Cherrill, director at TF Solutions.

“Thankfully, the industry is ‘on the up’ from our point of view and has continued to go from strength-to-strength with increasing demand from end users in the domestic, retail, food and leisure sectors for more sophisticated energy and cost-efficient cooling and heating solutions.”

Such turmoil is bound to have repercussions, which are not necessarily negative. 

“I think the industry is far more professional now than it was and the people who make up the industry have become more confident in displaying and boasting about that professionalism,” says Graeme Fox of the Air Conditioning & Refrigeration European Contractors’ Association (AREA). “Today’s RACHP engineers tend to be far more confident among our counterparts at CIBSE or other professional bodies than we were in previous generations. 

“The industry is also far more responsible environmentally as we have a whole generation of experienced engineers now who have a better understanding of the issues and solutions.”

“These days, building owners demand a broader offering, a broader set of services that goes beyond simply the equipment,” says Jeff Moe, vice president, product management and marketing for Trane in Europe, the Middle East and Africa. “They want building technologies, reliability, operating practices and intelligent building services that will create better, healthier, more comfortable and more productive indoor environments.

“The chiller market of Europe is possibly the largest and most diverse in the world. Customers demand more tiers, more levels and more options than ever before.

“Furthermore,” Mr Moe continues, “many building owners and managers in moderate climates such as in northern Europe face the need to provide simultaneous heating and cooling in different spaces of their facilities to meet sustainability targets set in some countries – such as the UK’s challenging building regulations.”

For a sector that generally tends to regard itself as essentially the same as it was sixty years ago, it has seen some rapid development in recent years. 

“The change over the last decade has outpaced all previous change,” says Mr Moe. “Alongside the significant technological evolution is the increasing role and impact that legislation has had in focusing on refrigeration and efficiency, especially in Europe. 

“The importance of sustainability – for both businesses and customers – has grown significantly as well. The result of which is significant innovation in product and service offering to support the sustainability and efficiency in this market.

“Moreover, energy retrofitting of the existing European building stock could yield annual energy savings of nearly 50% and reduce CO2 emissions by more than 50% as well as create around 0.7million jobs, according to the Europe’s Buildings under the Microscope report (prepared by the Buildings Performance Institute of Europe).”

“In terms of refrigerants, the industry has changed markedly,” says Dr Stuart Corr, techno commercial director, Mexichem Fluor. “Globally, the market continues to move away from HCFCs such as R22. 

“There has been greater focus across the industry on further reducing the global warming potential of refrigerants under legislation such as the EU MAC Directive and F-Gas Regulation.”

“This revolution and diversification has also changed the way that distributors such as ourselves work and we have reacted by offering more technical services to our customers,” says Mr Cherrill. “Manufacturers have also kept on top of their game by launching some truly impressive innovations – offering environmentally friendly systems and cheaper, cleaner alternatives to those that use gas, oil or other electric systems. 

“And this shows no sign of slowing down as we move into 2015 with some exciting product launches on the horizon.”

F-Gas

The industry was waiting with bated breath to see what the F-Gas regulation would like. There was some relief when it was ratified in the European Parliament last spring, as new refrigerants and products – some of which were effectively in a development holding pattern – could finally go into production.

“New legislation like the F-Gas regulation, which strengthens the existing leak prevention measures and introduces an ambitious reduction of HFC supply for manufacturers is a challenge, but also an opportunity to deliver new cost effective solutions to the market,” says Mr Moe.

“The F-gas regulation together with eco-design standards impacting the HVAC sector incentivise innovators to bring products to the market that have a lower environmental impact combining energy efficiency and lower global warming potential (GWP) refrigerants. In other words, new lower GWP refrigerants need to also be as energy efficient, or even more efficient than the refrigerants they are replacing.”

“The biggest challenge that F-Gas will bring in the short to medium term will be the pricing of HFCs,” says Mr Fox. “As the phase down kicks in there will be a shortage of certain HFCs that will create a price increase. This could put major pressure on contractors’ relationships with their clients and it’s crucial that contractors discuss this issue with their clients at the earliest opportunity.” 

“The principle challenge has been to apply understanding of the F-Gas Regulation to the supply chain, both in immediate and longer timeframes, developing plans that allow us to meet the needs of the industry going forward,” says Dr Corr, “and how the industry adapts to F-Gas in practice. Understanding what the best solutions are for managing the lifespan of appliances using higher GWP refrigerants, and starting to understand what new solutions will ensure compliance and cost efficiency for the duration of the regulations. Industry needs to avoid making premature decisions on technologies that will ultimately cost more in terms of expenditure or reduced energy efficiency.”

“Under the new F-Gas regulations – applicable from January 2015 – companies and engineers will find that they are asked to prove their F-Gas Registration credentials before being allowed to purchase refrigerants,” says Mr Sloper. “This is sure to cause some shock waves in those grey areas of the market where registration has largely been ignored until now.”

“I think the biggest missed opportunity in the last 12 months was the last minute dropping of the pre-charge equipment ban in F-Gas,” says Mr Fox. “So many aspects of the regulation have proved to be difficult to implement or police in different countries and the responsible sector of our industry has long campaigned to eradicate the cowboy sector. 

“Putting an end to the practice of pre-charging with HFCs would have been a big step towards achieving this, but industrial pressure persuaded the political classes to drop the proposal.”

R22 replacement

“The pressure from national and international authorities and NGOs, as well as environmental lobby groups, has pushed the industry to change at an accelerated rate, which has put the industry under severe strain, especially coming out of the global recession,” says Mr Fox. 

“The industry worked well on a united front to make sure the details of the revised F-Gas regulation weren’t overly onerous.

“With the phase out of HCFCs being completed at the end of 2014 there has also been a surge in demand for equipment or alternative gases to replace the old R22 equipment. Educating our clients and encouraging them to do the right thing hasn’t always been easy,” continues Mr Fox.

“2014 did not see the high levels of activity replacing R22 systems that many expected as we approached the final curtain call for that long running refrigerant, which those older members of our industry will recall was once the refrigerant of choice to replace CFCs!” says Mr Sloper. “Most R22 refrigeration systems – with the exception of some large industrial plants using pumped R22 – have long since been replaced, but many small air conditioning systems using R22 remain in service and their replacement during 2014 was widely anticipated. 

“However, this did not materialise on the expected scale. Whether this was down to financial constraints, or lack of knowledge of the situation among the smaller end-users, is not clear, but the future of those systems will need to be addressed at some point.”

“Some have missed the opportunity to transition from R22 and higher GWP HFCs such as R404A in a timely manner,” says Dr Corr. “This is clearly a major problem for R22 given the ban now in place, but also those still reliant on R404A are likely to see higher prices and potentially limited availability as the phase-down on quota comes into action.” 

But every cloud has a silver lining. “Undoubtedly the continuing replacement of R22 systems and gas charges will present a number of opportunities for contractors and manufacturers alike over the coming months,” says Mr Fox. “And to make best use of the time available in order to develop robust programmes for identification and transition to reduced global warming solutions across a range of applications,” adds Dr Corr. 

Natural refrigerants

There has been pressure from environmental lobbyists to move away from ‘manufactured’ to ‘natural’ refrigerants, which has been received with mixed response.

  “The drive towards low carbon refrigeration – in particular CO2 systems – has been primarily driven by the major supermarkets attempts to ‘outgreen’ each other, creating a rapid deployment of various groundbreaking designs,” says Mr Fox. “This has created the need for a large number of engineers needing upskilling in technologies that were largely phased out in favour of freons many years ago. 

“However, with the major supermarkets finding their markets being eroded by the traditionally smaller or cheaper stores, this will possibly cause a shortage of money to fund that move. It will be interesting to see how that pans out.”

“Prospects for 2015 look promising, except for those dependent on the spend of the established supermarkets who are suffering as the discounters eat into their market share,” adds Mr Sloper. “However our industry has a good track record of adapting to change and challenges, so we should be optimistic for the future.

“As a refrigerant much is written about carbon dioxide, but it is questionable as to whether it can ever be made sufficiently cost efficient for use in small to medium size commercial installations. Those applications need a solution that offers similar capital costs to HFC systems, and the new HFO refrigerants offer the best long term prospects.

“In the meantime,” he adds, “2015 will see increasing interest in refrigerants such as R407A and R407F, which offer an interim solution until the HFOs are fully developed and available on a commercial scale. 

“And R134a is not to be forgotten, with its GWP of only 1300, lower than both R407F and R407A.” 

“From a UK perspective the roll out of CO2 systems is fine,” says Mr Fox. “but the systems are inefficient in warm climates so they’re not the answer on a global scale. Ammonia also brings problems with planning because of its toxicity, and flamability in certain concentrations

“Designed properly and used in the right circumstances, the use of these gases is of course a good thing, but the law makers need to be more aware of the pitfalls of these systems to avoid blanket legislation. 

“What’s good for Scotland or Norway may not be so good for Spain or Italy, or even Southern England for much of the year.”

Contractors and manufacturers

In most construction sectors there can be seen an ‘us and them’ mentality between different parts of the supply chain. 

“Communication between each of the part of the industry chain, from manufacturers through contractors, is key to developing strategies and technologies that best meet the needs of the market in both the short- and long-terms,” says Dr Corr. 

“I think contractors have a lot to offer manufacturers in terms of real hands on field experience that most manufacturers’ representatives just don’t have,” says Mr Fox. “Particularly at factory and technical level. Involvement in international trade associations has shown me just what’s missing from the link to this problem and I believe there is a general lack of trust on the part of manufacturers to open up and take advice from their contractor customers. 

“As contractors we often forge close relationships with our clients but manufacturers normally don’t do this. They will offer incentives to buy their products and maybe hospitality if the contractor spends large amounts on their products, but it’s very rare for a manufacturer to take on board any niggling issues raised at field level and do anything positive with that information.” 

“At the end of the day contractors need manufacturers to make the products for them to sell, but manufacturers also need the contractors to specify, install, maintain and repair these products for many years so a more open, mutually beneficial relationship would be welcome,” said Mr Fox.

Training

“It’s no secret that the industry is ageing and there is a strong need to actively promote this exciting industry to the next generation of young people and inspire them to lead us into a successful and innovative future,” says Mr Cherrill. “I think that better promotion of the industry across the board is the only answer to ensuring that we attract engineering talent to the industry.” 

“The amount of available training is probably about right in the UK just now,” says Mr Fox, “but there are requirements under F-Gas to learn about alternative gases’ idiosyncrasies and different handling requirements – so this needs to be made available at the earliest opportunity. 

“AREA is currently in discussion with the European Commission about how this can be done on a pan-European scale, and the Institute of Refrigeration is running a European Leonardo da Vinci project called Real Alternatives which will be highlighting the various different gases under discussion.”

What doesn’t kill you...

Friedrich Nietzsche coined the phrase ‘what doesn’t kill you makes you stronger’, in the 19th century. The industry seems to have weathered the rollercoaster ride of the last few years well – so what strengths have emerged from it?

“Adaptability,” says Dr Corr. “The challenge in getting to grips with F-Gas has really highlighted the wealth of knowledge and experience we have across the supply chain.”

Diversity, says Mr Fox. “Diversity of the industry has developed engineers of such a variety of skills and experiences that our industry is in a very healthy position,” he says.

“I think the industry’s main strength is in its ability to innovate and create new and exciting products quickly in response to changing legislation and the requirements of the end-user,” says Mr Cherrill. “New product launches from manufacturers demonstrate a commitment to innovation within the industry and how brands are continually improving technology.”

It seems the road ahead is robust and infinitely long  – but not without its traffic jams and potholes.