It is an established fact that the United States is home to a number of distinguished international brands that are leaders in their respective industries. The success of these companies is underpinned by strong HVACR practices. As such, the sector is propelled to embrace innovation and provide sustainable solutions that align with its clients’ and its own interests to maintain competitive advantage, in the country and beyond. And then, there is regulation per se to contend with.

The role of regulation

Holley Chant, Executive Director of Corporate Sustainability and Commissioning, KEO International Consulting, best describes the situation, when she says: “In the arena of cooling equipment and chillers, the big companies – York, Trane, etc. – are doing a lot of research and development on refrigerants, since international policies and US regulations are increasingly stringent in regard to the global warming impact of refrigerants. The US Environmental Protection Agency (EPA) states that new production and import of most HCFCs will be phased out by 2020.”

Chant adds that the main challenge currently facing the HVACR sector in the United States is to find a refrigerant that not only has no impact, or limited impact, on the environment “but also provides efficient refrigeration in a cost-effective manner”.

Like any other organised entity, the sector falls prey to a number of factors that can easily push it towards one direction or another. Jim Rutz, Director of Global Platform Management, Tecumseh, comments on the broad nature of challenges within the industry, saying that they can easily relate to “demographics, consumer needs, government regulations for efficiency and sustainability, and various economic constraints”.

“Government regulation assists change by driving volume into new technologies,” Rutz adds, “which, in turn, accelerates economies of scale.” Admittedly, he says, there is only a small percentage of the population that cares enough about environmental issues and is ready to pay a premium to achieve it.

Chant, however, points out that momentum among the population has received a boost from local and regional governments, who are implementing codes that include mandating European passive-house levels of insulation and recirculation. “Solar PV is encouraged and embedded into building codes as part of municipal zero-emission-city targets,” she says. “Politically, more cities are, and will continue to be, setting targets like these, following the federal government’s vacuum of leadership.”

While regulation does play an important role, it is not the only aspect driving the sector towards sustainable practices. “You can say that regulations motivate companies to be innovative,” Rutz says. “Occasionally, federal, state and local governments will offer incentives – tax credits, grants or subsidies. Often, these are short-term and dependent on the current political party in power. And, therefore, [they are] somewhat fleeting in their effects. Similarly, utilities will offer various incentives to promote the use of more efficient products. It is probably fair to say there is much more incentive behind adoption of efficiency gains than there is for “eco-friendly” content.”

When it comes to regulation, there is also the additional issue of manufacturers manoeuvring the different agencies and, possibly, contradictory demands. Rutz touches on this challenge by sharing an example, where the Department of Energy (DOE) mandates minimum efficiency levels, while the EPA dictates the use of refrigerants that are inherently less efficient. “The industry is left to figure out how to reconcile the competing demands,” he says.

Prevailing trends driven by insight and anticipation

For the most part, Rutz says that companies that have proven themselves to be leaders in their chosen segments “tend to be very receptive to technology exchanges”. Though he describes direct consumer demand for efficiency and green products as “tenuous”, Rutz says that from a commercial point of view, the potential for reducing costs compels owners to be proactive in adopting newer technologies provided there is a calculable payback. Rutz highlights Tecumseh’s recent work in providing energy-compliant condensing units for walk-in cooler applications. Tecumseh, he

says, brought together new compressors, heat exchanger technology, ECM and variable-speed technology that are compliant with the new US DOE mandate. He emphasises that the company did so despite the fact that enforcement of these mandates does not begin for three or more years.

Another factor affecting the industry, Rutz says, is the lack of skilled labour. “Additionally, as systems become more complex to achieve the goals of society, the skill levels required continue to rise,” he says. “Finding skilled labour and on-going training is a challenge. This, in turn, drives innovation to remove dependence on labour.”

Chris Opie, Marketing Director, North America Commercial, Carrier, gives an indication of the innovation that has been wrought into the American fabric when he says: “Advancements in HVAC equipment, system components, and controls are improving both the rated efficiency and actual operating efficiencies. Controls now factor in more intelligent energy-saving methods to leverage the equipment technology’s ability to operate more efficiently during periods of reduced load or lower outdoor temperatures. This emphasis on part-load cooling hours can improve comfort and performance while reducing energy consumption.”

Showcasing Carrier’s ability to leverage its long-standing experience and expertise, Opie adds that this knowledge is not anything new. “We have seen this trend building since the late 1990s,” he says. “In the last five years, we have seen a significant increase in part-load cooling technology in chillers, rooftops, splits and other HVAC equipment.”

Reaffirming the ability of US companies to anticipate and act accordingly, Hamid A. Syed, Vice President and General Manager, UL Middle East, shares the organisaton’s experience in acting on insight gained from way back: “In the early 1990s, UL became aware that flammable refrigerants could become more widely used,” he says. “This was before the US EPA began driving the use of flammable refrigerants.” Following this, he says, UL conducted research to develop requirements for equipment that might use a flammable refrigerant. In 2000, he says, requirements to cover equipment for use with flammable refrigerants were added to the UL Safety Standard for Household Refrigerators and Freezers, UL 250. In 2008, he adds, similar requirements were included to the UL Safety Standard for Commercial Refrigerators and Freezers, UL 471. “Since that time, UL has worked with a number of industry groups to establish similar requirements for products covered by other UL standards, such as refrigerated drinking water coolers, vending machines, room air conditioners, ice makers, etc.”

Julian Iosifescu

Munters echoes this “frontier spirit”, in the context of data centre cooling. “There has been significant progress in US data centre efficiency over the past 10 years,” says Julian Iosifescu, Sales Engineer – Data Centers, Munters, “with increasing examples of ultra-efficient data centres down to smaller co-location facilities being planned and built with elevated regularity.”

William P Bahnfleth, Presidential Member, ASHRAE, says he has no reason to believe that improvement of performance of data centres will diminish. He adds that for many years, ASHRAE TC 9.9 – Mission Critical Facilities, Data Centers, Technology Spaces and

William P Bahnfleth

Electronic Equipment has been a leader in producing technical guidance that are de facto standards for data centres. And ASHRAE recently developed an energy-efficiency standard, ANSI/ASHRAE Standard 90.4 Energy Standard for Data Centers. “The need for greater resilience of building systems has been recognised by many organisations and documented in a statement and report published by the National Institute of Building Sciences,” he says.

Bahnfleth adds that a particular concern today is “the security and stability of power supplies, with hardening against cyber-attacks being high on the list”. Another aspect, he notes, is the balancing of electric grids served by large fractions of variable renewable energy sources, such as wind and photovoltaic.

The price of efficiency

Without a doubt, companies are moving forward. Opie believes that the impetus can be attributed to growing demand for technology that offers lower overall system maintenance cost, decreased energy bills and decreased impact on the environment. He also believes that the positive trajectory of the sector is owing to the public’s recognition of the payback of more efficient equipment and enhanced system controls via utility rebates.

“The momentum for energy savings in the US, regardless of politics, remains strong,” says Dan Mizesko,

Dan Mizesko

Managing Partner of Al Shirawi US Chiller Services “At the end of the day, everyone wants to save energy, because that is, bottom line, saving money. When you visit the AHR Expo show in the US, it is amazing to see the advancements made, year on year.”

Speaking of advancements, Chant says: “A popular technology that has improved efficiency is centrifugal, two-stage, magnetic-bearing chiller compressors equipped with variable-speed drives. This is a relatively new technology that operates at a high efficiency with low maintenance costs. These systems reduce mechanical friction, and as a result, they have very high efficiencies and greater reliability.”

Adding to this, Mizesko says that oil-less, magnetic-bearing centrifugal chillers, in particular, are set to be game-changers in the chillers industry. “The energy savings that these chillers achieve is just too big to ignore,” he says. “Any District Cooling or standalone facility that is going to have a chilled water plant installed will definitely have to purchase this type of chiller in order to stay competitive. Many manufacturers now offer these chillers.”

Chant adds that likewise, there has been significant progress made in terms of indoor environmental quality (IEQ), “because many organisations now mandate that IEQ is as highly valued as energy efficiency as an indicator of building performance”. She says, “Best practice is defined as
the facilitation of positive IEQ through excellent design, construction and renovation and then – equally important to the pre-occupancy tasks – implementation of IEQ-conscious operations and maintenance practices.”

Thomas Morrison

Providing a perspective on outdoor cooling, Thomas Morrison, Director, Marketing, Portacool says: “To facility managers around the world, it is important to monitor the costs of their operations, of which utility costs are a large portion. What we have seen, however, is that there are even greater costs related to worker safety and worker productivity loss.” Morrison emphasises that the cost-effective nature of a product is key. Speaking from experience, he notes that demand for outdoor cooling technology is driven by the fact that it provides low initial-investment cost solutions that have also minimal day-to-day operating costs.

Iosifescu echoes this clamour for low-cost solutions in the context of data centre cooling: “A recent national average for electricity is 12 cents per kilowatt-hour in the US, with a steady cost increase continuing over the last decade. About two per cent of the nation’s electricity is being utilised
in the operation of data centre facilities, [and] half of this amount is being used for cooling.” He notes that industry organisations, such as ASHRAE, Uptime Institute and Green Grid assist in setting standards for acceptable operating standards and increased environmental awareness that influence on-going efforts to maximise cooling system efficiency. Iosifescu says, “It is increasingly important for an infrastructure professional to look at how to decrease cost with energy-efficient cooling systems.”

Competitive advantage

Aside from the financial payback that energy-efficient solutions provide, a competitive spirit is also pushing stakeholders to innovate. “Another driver is competition,” Mizesko notes. “In New York City, for instance, many brand-new, high-tech buildings are being constructed in an area called Hudson Yards. These new, modern and energy-efficient buildings will command premium rents. In order for the existing premium buildings to stay competitive, they will have to deliver and offer energy efficiencies in order to lower their costs and stay competitive with the new buildings as well as achieve sustainability ratings that are attractive for potential renters (ie, Energy Star and LEED ratings).”

Speaking of new and old, Iosifescu says that in the United States, data centre categories can be divided into two – new-build data centres and the old or legacy data centres. “All of the new data centres,” he says, “have incorporated high-efficiency cooling technologies, such as air-side economiser systems, pump refrigerant as well as high-efficiency liquid-cooling technologies.” Iosifescu notes that the primary aim of such systems is to reduce, if not altogether eliminate, the direct-expansion, compressor-based refrigeration circuits. These technologies, he emphasises, can reduce energy consumption by up to 75%, when “compared to the conventional Computer Room Air Conditioning (CRAC) units”. Iosifescu says that these new cooling systems contribute greatly towards the Power Usage Effectiveness (PUE), which measures how efficiently a data centre uses energy. He says, “The new data centres are designed with a PUE between 1.06 and 1.3.”

This, he notes, is in stark contrast to old or legacy data centres, which he describes as very inefficient. “A legacy data center might have a PUE as high as 2.5, or more,” he says, adding that retrofitting an old data centre is a laborious and costly process, entailing a number of tedious steps, such as “installing hot/cold aisle containment and blanking panels, better air-flow management, upgrading the cooling system and adopting the new ASHRAE guideline”.

Sustainability for the people, by the people

Aside from lowering energy consumption to reduce cost and reinforce competitive advantage, HVACR manufacturers and other sectoral stakeholders are driven to deliver innovative and sustainable solutions with an eye on the health and welfare of the public. Opie stresses that there is increasing awareness on the value of improved air quality for occupants, along with the desire to differentiate and market the value to tenants and prospective tenants.

“I sense a growing public and professional recognition of the connection between IEQ and well-being – comfort, health and productivity,” Bahnfleth says. “Unfortunately, we are still at a point where a lot of research is needed to fill knowledge gaps that will permit practical use of health- and performance-based approaches. I think the US remains innovative with respect to IEQ products – air cleaners, low-emission building products, advanced ventilation controls, etc., are all creating possibilities for higher performance systems.”

Chant seconds this, saying: “I have seen momentum increase significantly in terms of interest in IEQ for the health and wellbeing of building occupants.” She notes that the positive momentum has also been stimulated by the COGFx studies, by the T.H. Chan School of Public Health at Harvard, with the support of Carrier. She says that through ‘The IEQ Study’ and ‘Buildingomics’, researchers “proved quantitatively in double-blind studies that more fresh air significantly enhanced performance of building occupants”.

Opie, also citing from COGfx, emphasises how improving existing practices can have a measurable, positive impact on the thinking and health of those who occupy the building. “Better buildings that result in better thinking and health can help enhance employees’ performance and well-being, serve as recruiting tools for business HR managers and provide a differentiator – perhaps even a competitive advantage – for building owners,” he says.

Chant further stresses that the increased recognition of building performance, taking into account how IEQ impacts public health, is not only a popular topic among academics and sustainability professionals, but that it has also diffused into the mainstream. “A triple class “A” USA green real estate market tenant or buyer now not only requires a LEED rating, but they are also looking for a Well Building Standard rating,” she says. “Well’s vision is that better buildings should be healthier buildings. The Well Building Standard not only focuses on HVAC but also brings attention to the circadian lighting and acoustic aspects of IEQ.”

Chant adds that having such a public health-centric approach as best practice for design, construction and operation is not unique to Well. “The Global Real Estate Sustainability Benchmark, GRESB,” she says, “also includes health and wellbeing criteria in their rating system. Developer participants report annually on how they use ESG-based management to improve their projects, including the option to report on health and wellbeing modules.”

Morrison, touching on outdoor cooling, also weighs in on the issue of increasing recognition of the sector’s role in public health. He says: “Here in the US, we are seeing a shift towards worker safety, where worker health is, rightfully, being put first. It is important to all employers that their employees make it home safely at the end of the day, and many government regulations are being pushed to support this initiative.”

The Wal-Mart, Facebook examples

As these factors drive HVACR manufacturers and stakeholders forward, end-users are capitalising on new technologies, with leading companies even spearheading innovations themselves, due to the massive demand they drive, and in recognition of the environmental impact of their operations.

A spokesperson from Wal-Mart, who does not want to be named, in the course of sharing the hypermarket chain’s best practices in commercial refrigeration, notes its appreciation for the valuable role the sector plays in the chain’s operations. “Wal-Mart works every day to deliver safer, more affordable, healthier and fresher produce to millions of people in a pleasant shopping environment,” the spokesperson says. “Doing so requires the use of refrigeration and air-cooling equipment across our value chains – from our distribution centers, to our delivery vehicles, to our stores and clubs.”

The spokesperson adds that the equipment require a lot of energy. “It accounts for as much as 30-50% of the energy consumption in our buildings,” the spokesperson says. “In addition, the refrigerant gases used in most systems – hydro fluorocarbons (HFCs) – are powerful greenhouse gases. This makes managing and improving these systems a high priority.”

Wal-Mart, the spokesperson says, is working to improve efficiency in current systems and to transition to new systems using refrigerant gases with lower overall environmental impacts. The chain has outlined a three-fold approach towards addressing the issue. The first is through reduction, and

the second is prevention. “We reduce energy use and improve performance in our existing systems by using common best-practices for maintenance and monitoring,” the spokesperson says. “We prevent energy waste and improve performance in new systems by using common specifications for high- efficiency systems with a lower total cost of ownership.”

The third approach pertains to transition. “We are moving to lower-impact gases and refrigeration techniques,” the spokesperson says. “Since 2011, Wal-Mart has been testing and evaluating options to facilitate the transition to less HFC-reliant systems.” For the FY2017, Wal-Mart worked with other members of the Consumer Goods Forum (CGF) “to put forward an ambitious resolution on refrigeration and to support the inclusion of HFCs in the Montreal Protocol, an international treaty designed to protect the ozone layer”. The CGF resolution calls for all consumer goods companies to work to rapidly phase down HFCs.

In addition, Wal-Mart, the spokesperson says, is taking steps to ensure efficient design in terms of “commissioning and maintenance, along with other initiatives to further reduce energy consumption, by installing doors on chiller cabinets and fitting LED lighting”.

For its part, Wal-Mart has found success in the strategy and is proactive in looking for better solutions. “In pursuing a global direct emissions reduction strategy that seeks to reduce size of refrigerant charge, prevent leakage emissions and transition to lower-GWP refrigerants, Wal-Mart has reduced its system charge by over 30% and is now in advanced trials with a refrigerant manufacturer over installation of low-GWP refrigerants that would see on average a 68% reduction in GWP, by moving away from HFC refrigerant R404a,” the spokesperson says.

In the case of Facebook, a representative from which spoke, again without wanting to be named, there is an avowed commitment towards “powering connectivity with the smallest footprint possible” and the company’s recognition of its “obligation to protect our shared resources — including energy, minerals, and water”.

Describing data centres as being “among the most advanced energy- and water-efficient facilities in the world”, the spokesperson from Facebook says that all of the company’s new data centres are powered by 100% clean and renewable energy, owing to new renewable energy tariffs and the new wind and solar farms being built as a result of the data centres. “The facilities are cooled using outdoor air instead of energy-intensive air conditioners, and house our hyper-efficient hardware, which powers our apps and services,” the spokesperson says. “We cool our facilities with outdoor air, and we use efficient cooling strategies, like our direct evaporative cooling system.”

The spokesperson describes Facebook as being committed to the cause of working in the open and collaborating with others in an effort for the company to advance sustainable practices globally. “We’re proud to play a role in bringing together the industry to pursue ambitious goals in order to protect the environment,” the spokesperson says, adding that through the Open Compute Project (OCP), Facebook shares the full physical layers of its data centre stack with the community – from the building, cooling, power, battery, open rack, networking, compute and storage. “By open sourcing our hyper-efficient designs, we enable companies of all sizes to use energy more efficiently and drive efficiency improvements across the industry,” the spokesperson says. “Today, there are more than 200 OCP members.”

Facebook’s move to collaborate and its avowed commitment to openness are also reportedly evident in its approach to procuring renewable energy. “We are founding members of the Renewable Energy Buyers Alliance (REBA), a collaboration of more than 100 companies working together to scale corporate procurement of clean energy,” the spokesperson says.

Lastly, when it comes to collaborating on renewable energy tariffs, the spokesperson says the company makes sure that these are not just accessible to Facebook but to other companies, as well, in order to grow the market for clean energy.

As companies are independently innovating, developing sustainable products and promoting green practices among themselves, HVACR providers recognise a market for their products in other parts of the world, especially in the GCC region, where many countries are professing their energy- efficiency objectives through their respective national visions.

“The trend toward coupling efficiency with public health is already diffusing internationally,” Chant says.

Rick Fedrizzi

To support her statement, she points to Well’s CEO, Rick Fedrizzi’s recent announcement that more than 100 million square feet in more than 30 countries are registered or certified to Well, as of July 2017. “The GCC and, in particular the UAE, have focused on increasing energy efficiency in building stock for 10 years,” she says. “The desire for healthy IEQ need not be in competition with GCC energy efficiency requirements. Robust energy optimisation strategies, coupled with emerging technologies, can achieve thermal comfort and healthy conditions, while still meeting conservation goals.” Chant says there are already a number of Well Building Standard-registered projects in Dubai, including a high-profile, very-low-energy iconic building.

Affirms Mizesko: “The GCC region is committed to sustainability, and thus, I feel that all of these new advancements and technologies will quickly make their way to all of the GCC [region] countries for implementation. The fact is that many buildings in the GCC [region] have the latest and greatest technologies.”

Mizesko adds that US Chiller Services has introduced technologies from the United States into the GCC region for energy savings and that, similarly, operating and maintaining plants in the GCC region has allowed the company to develop operational strategies for energy savings that it has brought back to the United States. “At this point,” he comments, “the world is global, and we are all freely sharing information, which ultimately benefits us all.”

Rutz echoes this, speaking from Tecumseh’s long-standing relationship with partners in the GCC region. “The dynamism of GCC [region] countries is obvious,” he says, “and we do have specific plans for direct investment and further growth in the area. We can see the desire by local leadership to bring a higher “quality of life” to the people. For Tecumseh, or anyone to participate in this opportunity, it behoves us to apply our most advanced technologies and best practices.”

Giorgio Elia

Giorgio Elia, Vice President and Managing Director, UTC Climate, Controls & Security Middle East, is also in agreement. He says: “Countries in the Middle East have been steadily enhancing efficiency standards in response to enhanced technology trends and to help reduce the burden from increasing power tariffs in the region.” This shift, he says, has led to an increased demand for higher-efficiency air conditioning solutions from regulators as well as end-users and contractors. He emphasises that this trend is prevalent across the region and has “had an impact on every product category within HVAC”.

Elia provides an example by saying that though historically chillers were evaluated on full-load kW/TR, now the trend is towards evaluating chillers on an Integrated Part Load Value (IPLV) basis, leading to a shift toward variable-speed technology in centrifugal chillers. Upcoming projects in the GCC focusing on higher IPLV plants, he says, will help in delivering lower building annual energy consumptions to the users. Elia adds that this also making District Cooling plants increasingly popular in the Middle East, taking advantage of their higher efficiency and diversity.

Iosifescu adds that Munters remains dedicated towards leveraging the company’s existing technologies, which he says, can operate efficiently under Middle East weather conditions. Besides the operational savings, he says, the company’s systems will allow data centre clients in the Middle East to save on the total cost of ownership by reducing the electrical infrastructure of the data centre and, implicitly, of the electrical grid. “Munters has realised the potential of Middle East data centre market,” Iosifescu says. “Therefore, one year ago, we started the collaboration with Built Environment (BE) – a reliable and knowledgeable Munters representative firm for the Middle East.”

Syed, for his part, touches on flammable refrigerant requirements included in UL Standards, which have triggered changes to HVACR products, causing HVACR manufacturers to view their products from a different design perspective, since products using flammable refrigerants can create hazards that were not previously considered for equipment using non-flammable refrigerants. He says that countries in the Middle East, with similar concerns as the US regarding the use of equipment with flammable refrigerants may want to adopt similar requirements. “Use of flammable refrigerants within HVACR products is a global issue,” he says, “and the HVACR industry desires globally “harmonised” requirements. Nations in the Middle East may want to review the flammable refrigerant requirements in UL and IEC Standards and adopt similar requirements, if they meet their needs.”

For outdoor cooling, Morrison adds that Portacool’s strategy for the region follows demand the company is observing from upcoming projects. “As we look at the need for infrastructure-build throughout the region for upcoming events that will gain the notoriety of the world’s eyes,” he says, “the treatment of workers in the region is sure to be scrutinised. We are prepared to be the answer to heat-related safety concerns – wherever that might be.” He adds that throughout all of the Middle East and North Africa, the same safety concerns are prevalent.

Inspiration, not complacency

While sophistication in R&D and manufacturing processes, leading to high-quality products is vital, Chant points to two equally important aspects for meeting energy-efficiency standards – proper training and expertise. “For achievement of the GCC’s various energy, smart city and happy communities goals,” she says, “it would be easy to be distracted by the new and exciting products coming into the market – and to think that developers and building owners have to invest in them. Some of these products will, indeed, bring great benefit and are potentially evolutionary in terms of performance attributes. However, the GCC [region] would do well to focus equally on human expertise – such as increasing the skills of facility managers to be competent in energy and IEQ management – and, then, to invest in regular, monitoring-based commissioning, delivered by skilled commissioning professionals.”

She notes that historically low-quality standards of care in maintenance and management of buildings have presented the most urgent IEQ and energy-conservation problems in the GCC region. Importing the best new HVAC technologies, she warns, can be a significant capital investment and will not eliminate the need for our community to take care of these new systems to maintain their performance.

“A truly smart city requires smart management,” she asserts, “and this is still the realm of skilled professionals, not solely of technology.”

As the HVACR sector in the United States is characterised by self-regulation, the values underpinning the development of products take on a more universal quality, making it applicable to other parts of the world, such as in the GCC region. Indeed, it would seem that the liberty that has marked the legacy of the US has gripped the sector in such a manner that its endless pursuit of excellence has and will continue to lead companies towards new and unchartered territories.