Chillers, much like the rest of the HVAC world, have seen a push to increase operational efficiency. These increasingly energy-efficient products, along with the need to replace aged units, have steadily driven growth in the chiller market. In fact, the global chiller market is projected to reach $11.33 billion by 2022, growing at a compound annual growth rate of 4.4 percent between 2017 and 2022, according to a report by MarketsandMarkets.
“The chiller market is actually growing, and a lot of it is due to the robust economy we’ve had this past year,” said Bill Dietrich, product general manager, chillers, Daikin Applied Americas. “We’ve seen consistently strong growth in the air-cooled chiller market for the last three years. The water-cooled market had been dropping in size a bit in North America over previous years, but we actually had growth even in the water-cooled market here in 2017. It was a nice indicator of a strong economy.”
Dietrich predicts the air-cooled market will grow at a faster rate and supplant some of the water-cooled part of the chiller market in part due to the progress in the efficiency of air-cooled chillers over the past five years.
“We’ve made some pretty dramatic inroads as an industry into the overall annual efficiency of chillers with things like variable-speed drives, variable volume ratio technology, and different types of condenser fans,” he said. “So when people start looking at their actual operating costs on an annual basis, in a lot of climates, it may actually be cheaper to run an air-cooled chiller versus a water-cooled chiller. Especially when you start figuring in how much you pay for water. And even outside of that, the maintenance is generally a lot easier on an air-cooled machine, and the installation is typically less expensive as well.”
In addition to the rise of the air-cooled chiller market, Dietrich said the market is being driven mostly by efficiency, with a close eye on what’s happening with refrigerants.
“People want to know they are getting the right performance and that they are buying something that won’t give them trouble in five to 10 years,” he said. “ASHRAE 90.1 is updated on a regular basis, and it continues to push for higher efficiency chillers. We’re going to have to do that regardless of the type of refrigerant that goes into the machines.”
Brian Smith, director of global marketing, global chiller products, building technologies & solutions, Johnson Controls Inc., agreed, saying there has been steady growth in the U.S. chiller market. The market continues to see a focus on the environment through improved efficiency at the chiller product level, but there is also momentum with building automation and system optimization, he noted.
“Energy efficiency continues to be the primary driver,” Smith said. “There is also a lot of press coverage about alternate refrigerants. In 2016, we committed to provide long-term solutions for our R-134a-based products, as there was some uncertainty around what was going to happen with refrigerants in the U.S. and globally. This year, we launched a completely optimized design, the York YZ magnetic bearing centrifugal chiller.
“As it relates to energy efficiency and refrigerants, absorption chillers have always been great economic and environmental technologies for buildings,” he continued. “They use water as the refrigerant and can use waste energy as a primary energy source. In the U.S. market, absorption has followed cycles in the energy sector, but the coincidence of pressures on climate change, energy security, energy costs, and reduction of waste energy — this could be the perfect opportunity for absorption to take off.”
Smith added that Europe, which tends to be ahead of other regions in taking action on refrigerants, has seen some interesting dynamics in the smaller capacity segment where chilled water systems compete with VRF systems.
“Growing concerns over the lack of non-flammable, low-GWP alternative refrigerants for R-410A for VRF systems has created opportunities for smaller chilled water systems,” he noted.
The market is also seeing strong growth in modular chillers, particularly for heat recovery, heat pump designs, and chillers that are multi-purposed for both heating and cooling, according to Rich Lancaster, president, ClimaCool Corp.
“Having multiple modes of operation in the same unit or chiller bank offers owners several advantages,” Lancaster said. “First, the compact size of multi-mode units takes up significantly less space in a mechanical room than a separate boiler and standard chiller. Secondly, compact modular units are easier to install, since they can fit through a standard double door and in a typical service elevator. This ease of installation is an important factor in a market where units for replacement and modernization are still larger than the new construction market. And lastly, multiple modes of operation mean the same unit can precisely match the changing load requirements throughout a day, a week, or the seasons of the year.”
ClimaCool is thrilled to see interest in its heat pump and heat recovery chiller options, Lancaster noted, saying that heat recovery allows owners to use energy they would have otherwise thrown away for domestic hot water or heating requirements.
“Heat pump systems continue to be popular choices, especially for K-12 schools and commercial offices, due to their high efficiency and low utility costs,” he said. “We’ve seen a growth in our dedicated outdoor air systems (DOAS) to provide the ASHRAE recommended outdoor air for heat pump systems.”
ASHRAE guidelines, which recommend the use of heat recovery whenever possible, are a big influencer, Lancaster explained. Economics also continues to be a trend as more owners and system designers are realizing the financial benefits of heat recovery. Additionally, certain state and local municipalities have enhanced their energy codes to require systems be increasingly more efficient.
“The need to avoid downtime in critical facilities, like health care, high-tech manufacturing, and education, is driving the demand for redundant systems,” Lancaster added. “With modular chillers in a bank, if one unit fails, the other modules continue to operate and provide cooling or heating for critical temperature control.”
Government, institutions, and major commercial corporations also focus on building or modernizing their facilities to include sustainable systems in order to save money and attract the next generation of employees.
“The trend toward zero energy for all buildings is driving chiller designs to do more than just provide chilled water; they need to be able to achieve the energy efficiency, redundancy, and flexibility required by today’s high-performance mechanical systems,” Lancaster said.
Optimum Energy LLC is seeing growth in the market as its clients replace older chillers with new, more efficient products, according to Ian Dempster, senior director, product innovation, Optimum Energy.
“Putting in an efficient chiller is a great move, but you really want to be focused on optimizing the entire HVAC system,” Dempster said. “For us as a company, we’ve been looking at the chillers, the pieces of equipment associated with them, and how these facilities use cooling for over 10 years now. Our product, OptimumEDGE, focuses on not only running the chiller efficiently, but on running the whole chiller system or chiller plant more efficiently. I really see a lot of people now focusing on optimizing their whole chiller system versus just installing and running efficient equipment. We’ve seen good results on getting efficient equipment running in buildings and actually having control intelligence on top of that to ensure these systems are operating as efficiently as possible at all times.”
Dempster added that over the past five years, a lot of focus has been on making air-cooled chillers more efficient in order to conserve water resources due to the concern about water shortages around the world.
“Obviously, air-cooled chillers allow the chilled water system to operate with less water,” he explained. “You’re not going to be evaporating water from cooling towers as you do with a standard centrifugal water-cooled chiller plant. Another factor is many cities are putting out requirements in the form of codes and more modern equipment in buildings. With the visualization of different systems around water and energy, seeing the amount of energy used for air conditioning and cooling, people are realizing there are technologies out there that can reduce that usage.”
As the market continues to grow and advance, owners will continue to build new facilities, targeting net-zero energy and incorporating a variety of construction components and renewable energy, like solar photovoltaic (PV) panels and high-performance mechanical systems, Lancaster said.
“Owners are planning long term to counteract the effects of steadily rising energy costs and to become energy independent,” he said. “Redundancy will continue to grow as everyone wants to avoid downtime, not just in critical facilities, but also in buildings that feel economic effects, like the hospitality and retail industries.”
Dietrich predicts the market will start to see a shift in refrigerants over the next five years, along with continued growth on the air-cooled chiller side.
“People are a little more adverse to the maintenance associated with the water-cooled systems, so we’ll continue to see the air-cooled part of the market get stronger, especially with the products under 500 ton,” he said. “We’re also anticipating some of the model building codes will start to recognize the lower flammability refrigerants around 2021. That will be the first opportunity to see some of the R-410A alternatives out in the market.”
Smith anticipates that growth of chiller equipment using alternative refrigerants will take place slowly over time, as equipment and component manufacturers optimize new designs for new fluids.
“We see continued use of today’s offerings that are highly optimized and energy efficient,” he said. “If the costs for new refrigerants were to drop, then the growth of alternative refrigerants could accelerate. And while we’re seeing growth in nearly all sectors, we do anticipate potential renewed interest in absorption chillers and heat pumps due to their use of waste energy and potentially other forms of heat recovery and heat pumps. Absorption, heat pumps, and heat-recovery technologies represent significant savings in energy consumption and reductions in fossil fuel dependence and its associated emissions.”
Publication date: 5/21/2018