The key to Sweden’s success in the HVACR sector lies in its strict regulatory framework, which has encouraged the development and implementation of environmentally friendly and energy-efficient products and systems – a model the GCC region needs to emulate. Pratibha Umashankar gives an overview of the scenario.

Regulation, awareness, innovation and conservation form the firm foundation on which Sweden’s HVACR industry has been built, and built to weather occasional storms like the recent economic downturn.

The market’s optimism is palpable. Lars Hargö, Vice President International Operations, Capital Cooling Energy Service, Sweden; Jesper Olsen, Market Manager, Industrial Refrigeration, Alfa Laval; and Lars-Olof Johansson, Technical Manager and Director, DEW-Kylsystem, Dubai and Sweden, represent this spirit, which they believe has emerged from the carefully nurtured culture of best practices across the HVACR spectrum. Their companies have a presence in the region, and juxtaposed against the Middle East conditions, they find the contrast, perhaps, hard to miss.

Johansson echoes this when he stresses that it is business as usual in the post-global downturn scenario in Sweden, as the HVACR market has emerged relatively unscathed, while the GCC states are still experiencing its aftershocks “The investors and the industry took the chance to retrofit and replace/upgrade the systems to more energy-saving systems to reduce operating costs,” he explains, and adds that unfortunately, this was not the case in the Middle East. He also points to the fact that Sweden has had a 20-year head start in the production of green energy and wind power, which makes it one of the market leaders in sustainable solutions in the HVACR sector. However, he astutely observes that the spectrum for investment and energy-saving concepts/installations in the EU and Sweden has a lifespan of 20 to 50 years, whereas in the UAE and the region, the stakeholders look at a very short investment span. “Since a lot of people/decision makers are here only for a short time of three to eight years, there is no interest,” he says.

The condition in the Middle East is improving, says Hargö, both from the fiscal and environmental perspective. Things are looking up at least in the refrigeration sector, which his company is involved in, with its regional head office in Dubai, believes Olsen. But Johansson sounds less sanguine. His company has a full-fledged presence in the region in design, installation and service of HVACR installations, and specialises in sustainable products with low-energy consumption and low-carbon emissions.

THE SWEDISH CONNECTION – THE REGIONAL OUTLOOK

Sweden, with its long experience and knowledge in the district energy infrastructure systems and HVACR equipment, has made inroads into the region. Its HVACR products have found favour with regional distributors, installers, contractors and system builders and have a competitive edge. An added advantage is that almost all products from Sweden fulfill the GCC requirements and specifications. The demand is for new system design and cost-effective solutions.

Also, given the climatic conditions in the region, the emphasis is on preserving vegetables at different temperatures and relative humidity. Therefore, a lot of Swedish products have been developed with this focus, believes Johansson. He lists a few of Sweden’s HVACR exports: “Plate exchangers, compressors for natural refrigerants like R717 (Ammonia) and CO2, air coolers with extra surface area for better heat transfer, air sock system in cold stores for natural air movement inside the areas, passive cooling systems with energy storage inside the building construction, smart BMS systems to use natural cooling from ambient air and water for ‘free cooling’, products of high standard and regulation for pressure testing of refrigeration systems to prevent leakage of HFC/HCFC into the atmosphere… There’s a long list!”

The wide gulf:

Hargö estimates that while the massive government spending in housing and infrastructure in Saudi Arabia and Qatar translate into a positive contribution to Sweden’s export industry, the HVACR segment in the region is still relatively small. Says Olsen, “I can only talk about Alfa Laval, and it is definitely very positive for our business.”

Johansson, looking beyond the products and with his gaze set on sustainability, rhetorically asks, “The main issue is, how much are the clients focused on new technology or being in the frontline with green and energy-saving solutions?” He, then, goes on to answer it: “If it’s a ‘normal HVAC-installation’ without any kind of specified targets, the chances for business are 0, as then, only the price of the installations will be the benchmark. Therefore, sorry to say, but this is probably the fact, since there are no signals from any country to improve either regulations or standards for building design – a lot of talking but no action.”

This leads one to take a serious look at implementation of sustainable and energy-efficient measures in the region. While Olsen concedes that the region has been slow to pick up the global green trends, he believes that the ever-soaring energy prices will have an impact on practice and policies. “So, we have to wait and see,” he says cryptically, and adds, “In the end, it is a matter of money.”

Johansson endorses this view, but with a caveat when he says that there has been an increase in awareness to “a moderate extent” in the last few years, and has kept pace with the energy prices. “The Project managers are always looking at the price today,” he says. “Nobody in the UAE will get a chance to present something with the lowest lifecycle costs (LCC). In the EU and Sweden, it’s the LCC that is the main factor for decision makers.” Strong though the criticism may sound, it once again underscores the general perception that the region will take sustainable solutions seriously only when things begins to hurt financially.

On the other hand, Hargö takes a more charitable view when he says that the growing awareness about green issues globally is reflected in a willingness to accept sustainable policies by people in the region and in governmental regulations. He cites the example of the implementation of different kinds of building code systems, such as LEED in the region.

Olsen believes that if Sweden is looking for a long-term presence in the region, it needs to co-opt the GCC states’ support in building awareness about Sweden’s HVACR products and create better channels of communication to strengthen the partnership. “The heat exchangers we have in our installed base will always be a strong tool to use in discussions with consultants, end-users, contractors and installers,” he says, pointing to a possible business strategy.

SWEDEN’S SUSTAINABILITY MANTRA

The key factors that lead to best practices in Sweden’s HVACR sector are the right regulations, legislation enforcement, a mature consumer base, where people and the government are aware of their societal and environmental obligations, leading to the country’s culture of awareness, innovation and conservation. It is, indeed, an ongoing process. Olsen explains the basics: “Sweden is and has always been a very innovative nation and promotes any kind of education that brings the country and the individual to a higher level. And after World War II, this has been a natural part of daily life. As we all see the benefits [of conservation], it does not normally create any conflicts as the availability of raw material and energy are very important for our existence and competitiveness. In Sweden, every public and office building needs to be energy-declared by authorised companies and built to fulfill the demands set by the authorities. It definitely helps bring the technology forward.”

Johansson adds: “The main initiative came after 1973 – the oil crisis –when energy prices were skyrocketing by 400% within a week. The government, the industry, end-users and owners of HVAC installations realised that something drastic had to be done in order to survive and use cooling and heating installations in a smarter way with much lower energy consumption. Since then, the average energy consumption for houses/offices/buildings in kWh/year/m2 has been reduced to less than 50% compared to 1970. The use of the total electrical energy is down to the rate per capita as it was in 1970 and still going down. The target is to come down to the level of 1955.”

Sweden, through the right policies and practices, has ensured that all new buildings comply with strict energy-efficiency measures. “A detailed energy consumption plan and lifetime plan for the systems has to be presented for all new projects before any type of building permits are granted,” Johnson reveals. “There are also different maximum standards for the annual energy consumption in kWh/m2, depending on the use of the building. It is called Energy Warranty.”

When it comes to HVACR equipment, Hargö says that Sweden follows all the EU directives and standards applicable to the Middle East region. “The reliable trends are service and products which are resulting in economic growth with environmental concern; growth and sustainability go hand in hand,” Hargö adds.

Refrigeration:

Sweden’s breakthrough in technology is predicated to energy saving and climatic conditions. With long and cold winters and a single harvest season, apart from warm interiors, the country needs and boasts of high-quality cold stores. “We have to store food for 12 months in order to survive, as we cannot buy fresh vegetables and food on a daily basis,” Johansson explains. “Therefore, we have tried to be the “ice breaker” of new technologies. As far back as 1981, we started to replace R12 with salt and water in food stores – 10 years before anybody else did.”

He lists the new technologies in refrigeration:

• Natural refrigerants with a high COP with very low impact on greenhouse effect
• Full indirect systems with a very low content of refrigerant charges
• Cascade system with CO2 for food stores and supermarkets

“All the countries around the world with similar climatic conditions have developed the best know-how and technology for cold stores and buildings – the closer you come to the equator, the less is the technology for such know-how,” Johansson quips.

IAQ:

Research in IAQ is one of Sweden’s top priorities, reveals Olsen. “The government has put a high premium on indoor temperatures, indoor humidity levels and air freshness by controlling the CO2 content in offices and public buildings,” he says. “Speaking on behalf of his company, he adds: “For Alfa Laval, it is, and has always been, very important to invest a respectable part of the turnover into R&D and competence. Individual competence is very important, not only for the individual but also for the company. Every new product we launch should be either a trend-setter or a mirror of the current trends. Products which create a better day for everyone is on the top.”

District heating:

Swedish district heating, considered one of the best systems in the world, is based on energy that would otherwise have gone to waste. “The number of industries close to the city centres has made it possible from early days to take care of the waste heat in a positive way,” Olsen elucidates. “Low energy cost was a good way to make the country grow.”

Hargö believes that the world-class district heating in Sweden is also largely driven by the country’s ambitious goal of phasing out fossil fuel-dependency. (For details on district heating and cooling see side-bar, titled DH and DC.)

Johansson believes that the climate of good regulations and best practices offer a tremendous opportunity for the HVACR sector for innovations, especially for the HVACR installers, which are in the frontline with new green technology and know-how. “For the standard HVACR companies without any kind of R&D of their own or an innovative concept, it will be a hard lesson,” he warns.

Johansson bemoans the fact that the innovations and the culture of conservation have not percolated to the Middle East. “Sorry to say, but there is very little response to or awareness about what is going on in the world around,” he says. “The most dangerous types of refrigerants are still being allowed to be used in new installations in the UAE. Those types were banned in Sweden from 1991.”

He points out that India has been quick to adapt to new technology. “India has the basic know-how,” he highlights. In his opinion, the key drivers in the refrigeration industry in India have been shortage of energy leading to power cuts, a conducive education system that generates a large pool of HVAC engineers, long-lasting and a wider investment horizon and the political will.

RETROFITTING

Legislation in the European Union encourages retrofitting of existing buildings, just as it ensures that all new buildings comply with strict energy-efficiency norms. In Olsen’s view, Sweden has a good retrofit market, also because a lot of public buildings and offices were built in the last half of the 20th century. “Now we need to freshen up those buildings for new use,” he says.

Hargö estimates the percentage of retrofit projects in Sweden to be about 50%, while Johansson pegs it at 50 to 60% retrofit and 40 to 50% new installations.

However, the experts do not see this reflected in the Middle East. The fact remains that the region and the market are still young and most buildings are relatively new compared to those in Europe. Johansson, speaking from experience, says that the region presents a golden opportunity for the retrofit industry, waiting to be tapped. “If there is a retrofit programme for all buildings, warehouses, shopping malls, with new energy regulations for the future energy consumption, then we can do it,” he offers enthusiastically.

CONCLUSION

Typically, the key factors that nurture best practices in any country are legislation and enforcement and a society acutely aware of its joint responsibility and societal obligations towards the country and the environment. Sweden scores on all these counts. It is, therefore, hardly surprising that the HVACR equipment from the country meet the requirements in the GCC.

Regulation, awareness, innovation and conservation are evidently interlinked and complement one another. Heightened awareness at both public and governmental levels about rising energy and environmental costs has spurred sustainable innovations and strict product and market regulations in Sweden. The industry experts are unanimous in their opinion that these factors have, together, played a pivotal role in helping the sector weather the economic storm to emerge stronger. They also agree that the GCC states lag behind in these very areas, and need to pursue them with the same rigour as Sweden has, if they hope to reinvigorate the market in the region.

Sweden, say the experts, has learnt its lessons the hard way. Increasing energy costs and decreasing energy production due to new environmental demands saw closing down of coal/fossil and nuclear power stations. “We have been through oil/energy crisis – short of demands, skyrocketing prices, power breakdowns… So, we are trying to build a sustainable system based on our experience,” says Johansson.

“We all know that we have to take care of the resources that we borrow from our children,” says Olsen.

Perhaps, it is time for the GCC region to take advantage of the received wisdom from Sweden. But, any positive transformation, if it has to be enduring, has to emerge from the groundswell of the native soil, rather than being transplanted. As Olsen points out, it would be better to see sustainability “grow in a more natural way and without specific demands from the governments”. He disarmingly asks: “It is always a pleasure to see a seed grow, isn’t it?”