Something in the air
Noel Ryan, president, Danfoss Commercial Compressors, on emerging industry trends, his company’s HVAC solutions and more
Interviewed by SHAFQUAT ALI
Where does Danfoss position itself in the commercial compressors space in India?
In the commercial air-conditioning space, we have compressors across all kinds of air-conditioning units, from cooling capacities of five horsepower up to thousands. The dominant technologies in commercial air-conditioning compressors are scroll, screw and turbo (also called centrifugal) – and Danfoss has two of these. Scroll is the trend to get bigger in size competing against the screw. In turbo, the trend is to get smaller in size competing against the screw. In general, they all have a position in the market.
What factors are driving changes in the market?
The changes in the market are driven primarily by two things, one is the energy efficiencies. So the different regions around the world – Asia, India, Europe, USA – are all driving energy efficiency requiring ever-lower energy consumption from the units. So there’s continuous change in the design and technology in the compressor world.
The other key driver is the refrigerant. Europe is, on the one hand, leading with the F-gas regulation, which is primarily pushing for natural refrigerants or very low Global Warming Potential (GWP) refrigerants. Much of the rest of the world follows the European trend.
Lately, we’re seeing other players are having an influence on the refrigerant world, such as China and Japan, which has come in with refrigerants like R-32, also a low GWP refrigerant. So those are the trends we’ve seen over the past couple of years and will continue to drive the industry over the next few years.
Are we likely to see the entry of new refrigerants?
It’s clear that refrigerants like hydrocarbons are coming. We have an offering for that in Danfoss. We can also see other natural refrigerants like CO2 coming, and it’s not a trend any more, it’s a reality. CO2 is primarily going to be in low- and medium-temp refrigeration.
In addition, we are expecting to see some synthetic refrigerants with low GWP. There have been some issues with flammability and toxicity but there are solutions on the horizon. We are going to see a lot of change in the next 10 years. Already this year, tax incentives and regulations have started driving the change. We are also qualifying our products for those refrigerants, so we’ll be able to compete.
So where exactly does India fit into your scheme of things?
India is moving at a different speed than some of the other regions. It is still primarily using R-22 in the air conditioning, but we do see new refrigerants being introduced like R-32, 410A. So they are moving with the global trend in the refrigerant sector. Europe is a trendsetter, followed by China and Japan. Looking at India as a market, we have moved some of our R&D here with the new campus in Chennai.
What is happening on the R&D front in India?
Danfoss has got four R&D teams that they want to build up in India. One for electronic components; one for the industrial valves like ammonia valves for big refrigeration systems. The other one is for the variable speed drives, where they have been building up for the large capacity drives. For our reciprocating compressors, we have our entire team here in India; they mainly focus on engineering work for the reciprocating compressors but they are also looking at sourcing. So we do expect to use India as an important sourcing base.
Are there any indigenous products in the pipeline for India?
We have a product called a condensing unit. It is compressor latched together with a fan and a coil and an electrical box and you plug it into the system for cold rooms. So we have made a design in India for the Indian market. It’s a completely Indian design, but by and large the components are global. We are planning to use that product in Asia and other cost-competitive markets.
We are looking at new concepts out of India because the Indian engineers are much quicker in time to market with projects. There are plenty of ideas for innovating, for doing things differently, for taking out costs. Although it’s really early stages, we hope we can add a thousand more Indian brains to the population of Danfoss.
What does the India operation contribute?
India is currently contributing to R&D but we hope to add double-digit percentage of our sourcing in the next three years. It is in low single digits today.
What penetration are you expecting for commercial compressors in India?
Ten years ago, air conditioning was a luxury in India, now it’s everywhere, in the towns, in the villages. Air conditioning has almost become standard so there is a huge market.
What are the challenges, moving forward?
I think the real challenges are just our speed. A lot of things are happening, a lot of regulations are coming in, there are a lot of investors from the government and private sectors. Then there are a lot of hotel owners that understand that there’s money to be made from having the proper air-conditioning technology in-house.
What, according to you, are Danfoss’ USPs?
If we look at the air-conditioning and refrigeration segments I think we are one of the few players that have all the components, even though we don’t make all the components.
Also, across industries, energy savings and precision system control are the main reasons to use adjustable frequency drives in HVAC systems. At Danfoss, providing automatic energy optimisation is our core expertise. Along with our drives, the efficiency of fans or pumps remain high at reduced speeds, thus leading to significant savings in energy consumption.
So, what’s holding you back from becoming an OEM?
It’s just not our strategy. In the air conditioning and refrigeration world the technology is in the components. With OEMs, they put them together and then many of them go into maintenance and they go into building management. This is completely different from what we do. Our ambition is to make the highest quality and innovative components.
We have the compressors, the technologies, the variable speed drive, the variable capacity. We have most of the components, the small controls, the expansion valve, the dryers, side glasses, filters, we have the heat exchangers comprising of the micro channel and the plate heat exchanger. And that is combined with our ground sales force, in almost every country, who have the applied knowledge. So supply and apply, that’s the mantra.
There are companies producing compressors but with one technology. We don’t have competition; we are a full-blown player that has compressors with different technologies.
What innovations has Danfoss made?
There are three areas where we have made innovations or at least were the first to the market. If you take the turbo core compressor, which is an electrode magnet bearing, oil free, chiller compressor; with that we have taken a significant market share in Europe and America in the high energy efficiency building. And we are the only supplier for that capability.
We are also the first to market for the commercial size 10 to 15 tonne variable speed compressor with a dedicated drive. We are the only player today. There are plenty of players with variable speed but only in the residential.
On the control side, we have been the first mover with the heat exchangers and the micro channel. Now, even in India, with the air-conditioning regulation coming into play we have to use micro channels. So the old fin and coil which was dominating up until two years ago is going to be replaced by that technology. There’s plenty of ideas in the pipeline.
And yes, there will be more innovation coming because of the changes which are happening in terms of energy efficiency or refrigerant.