Tracking changes in the air-conditioning market
New companies, new products and ever-changing market shifts are all revealed by BSRIA’s latest survey of the UK air-conditioning market. David Garwood has the details.According to preliminary figures from BSRIA’s research into the sales of air conditioning equipment for 2006, growth in some product categories was up to 20% compared with 2005. Final results from the study will be made available in July.
VRF and standard mini-splits Latest indications are the VRF market has continued to grow in 2006 over 2005. The VRF market is competing well with the chiller market at the entry level (less than 350 kW of cooling) and with multi-splits. For 2006, the cooling-only sector was around 3% of the total volume, with heat pumps representing 48%. Industry experts expect further growth for heat-recovery units. The main driver for heat-recovery units is their built-in flexibility, with independent control of heating and cooling. Heat-pump systems are more suitable for smaller buildings. Energy efficiency is the second main driver of the market. In 2006 three new players entered the VRF market; Zetacool (Midea), Eurofred and Airco (Aisin). Eurofred is an independent distributor with the licence to sell Fujitsu brands. Three other companies are expected to enter the VRF market in 2007 — namely Vaillant, Airconforall (Sinclair) and Acson.
Multi-splits. The market for multi-splits is still very small (less than 4% of the mini-splits volume). Standard splits grew by at least 15% in 2006 compared to 2005. However the financial year April 2006 to March 2007 demonstrates growth in single figures. Some companies in the market may push sales in the first quarter of each calendar year in order to meet financial targets. Since a major share of the market is now through direct sales, companies in the market will find it more difficult to continue this policy. This trend towards direct sales will also have an effect on prices, which are expected to remain more stagnant due to the fact there are now fewer players in the supply chain. The trend for distributors is to focus on multi brand selling to protect their independence, instead of being loyal to one manufacturer. 2006 saw the entrance to the market of Airconforall (Sinclair), Gree, Eurofred and Vaillant. The Gree brand is sold by MGR services and Air Conditioning Solutions Group. Eurofred is an independent distributor selling Fujitsu brands. Haier has temporarily suspended its air-conditioning sales in the UK and is expected to establish an air-conditioning team in mid to late 2007. Distributor Dean & Wood will enter the splits market, selling the smaller Midea brand of splits. Zetacool will focus on the larger splits, VRF and chillers. Viessmann will enter the UK market this with an OEM product originally manufactured by LG. Trends within the mini-split market include the further development of higher COPs (from around 3.5 to 4.2) within the next couple of years.
Chillers and terminal units Figures from the study indicate that the markets for chillers and terminal unit markets (not including chilled beams) grew in 2006. The chiller market is estimated to have grown compared to 2005 in line with growth in construction. Manufacturers of all central-plant products saw an increase in the number of large installations (>500 kW). Figures suggest that last year continued to witness the decline of reciprocating compressors from both ends of the market — with both screw and scroll compressors eroding their market share. This trend is expected to continue into 2007 as the market favours screw and scroll compressors for energy-efficiency reasons. Until 2003, it was thought that screw chillers would dominate. However, scroll chillers are continuing to gain popularity in the market as they are being used for larger capacities (and with R410A refrigerant). Another trend in 2007 will be the development of a water-cooled scroll and screw compressors with invertor drives to complete with centrifugal chillers. The oil-free air-cooled centrifugal Turbocor compressor has been introduced into the UK market. High sales of this compressor have been reported in 2006 and are expected to continue into 2007. New players in the market include Midea and FlaktWoods, which sells an air-cooled screw and scroll chiller brand called Climaflakt. BSRIA has revised its figures for absorption chillers, and details will be released to HEVAC in July. In 2005, fan coils witnessed a decline in sales — but bounced back in 2006 with significant growth. Manufacturers of fan coils with EC driven fans report significant business increase. This increase of enquiries stems from end users and contractors completing projects which have been in the pipeline for some time and jobs which need to be completed before there is a possible shortage of skilled workers in the run up to the Olympics. Market players include Gascool (Robur), McQuay, Carrier, Trane and Thermax. McQuay is the distributor for Thermax sales in the UK and Thermax also sell direct. Air-handling units look set to increase in volume slightly after declining in 2005, with manufacturers reporting strong sales for hospital projects. VAV and constant-volume terminal unit markets are also indicating a return of strong growth in single figures.
Close control Close control (specialist air-conditioning for non-comfort cooling applications) is demonstrating the potential for high growth. It is becoming attractive to other air-conditioning companies such as Mitsubishi Electric and Mitsubishi Heavy, which entered the market in 2006. This market looks set to reach growth of double figures over 2005. In 2007 the close-control market will grow, especially in the computing sector. This will be in part due to an increase in specialist cooling for data warehousing and server rooms. Some manufacturers, such as Rittal, APC and Knuerr, are offering new products and solutions including water-cooling devices, which involve the use of a heat exchanger situated inside the server cabinet. These do have their disadvantages as the end user tends not to want water as a refrigerant running around the server room in case of any leaks and there is one single point of failure. Other companies such as IBM and Hewlett Packard are offering their own solutions, which involve providing supply of services and cooling as a complete package to the end user. They have developed products, which improve on efficiency of cooling — the prime reason for which is to push more of their IT equipment.
Refrigerants R410A is expected to be the main refrigerant in invertor and heat-pump products during the next few years. R407C is predominately used in reciprocating chillers and R134A is used in centrifugal chillers. There is a slow trend towards R410A for scroll compressors, with most scroll compressors below 450 kW expected to be using R410A within two years. There is not expected to be a move away from HFC refrigerants in the short term, as alternatives such as carbon dioxide are not widely available to satisfy all requirements for comfort cooling. Also carbon dioxide requires a very high operating pressure, which leads to higher installation costs. It is believed that energy efficiency will be the main focus to reduce the impact of carbon emissions on global warming and not just one component, such as refrigerants.
David Garwood is a market data analyst with BSRIA Worldwide Market Intelligence. For more details of the report, go to the web address below
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