Changing trends in air conditioning

Published:  12 June, 2008

The economic climate is a major influence on the UK market for air conditioning, but new technical trends are emerging — as David Garwood explains.

The UK air-conditioning market is changing. No longer is it a straight fight between fan-coil units and chilled beams. Variable-flow-refrigerant systems (VRF) are developing into various different guises, and roof-top units are showing strong potential for growth.

In 2006, BSRIA estimates that the total value of the UK air-conditioning market was a little over £692 million, and the market is thought to have risen further in 2007.

There was strong growth in demand during 2007 for new build and refurbishment of offices. Property developers took advantage of lower borrowing costs. Many manufacturers reported growth in the market for central plant and packaged products as clients accelerated construction and refurbishment programmes.

However, with the rises in interest rates and the recent turmoil in the financial markets, this is expected to change. It is now more difficult to fund the projects through acquisition of loans.

BSRIA expects a decline in new orders into 2008. There may be a swing towards refurbishment as opposed to new build, as budgets will be tighter.

Roof-top systemsThe roof-top market experienced an increase in volume and value in 2006, recovering to levels last seen in 2004. The increase is largely due to investment from the retail sector such as cinemas and fast-food restaurants, which are bucking the trend in consumer spending.

In 2006, roof-top products above 200 kW of cooling became available. Together with other recent technology developments, this has allowed roof-top systems to start penetrating the traditional market for chillers and air-handling units. The roof-top product can perform all the requirements of these conventional systems in one box, so it will benefit from applications of low capacity and where plant space is limited.

Air-handling unitsThe total market size for air-handling units recovered in 2006 to the level last seen in 2004. The market grew by 13% in volume and 14% in value in 2006 over 2005. Modest growth is expected for 2007 as a number of manufacturers reported significant sales on the back of further growth in the UK construction industry, particularly in the office sector and the chiller market as a whole.

Close-control air conditioningManufacturers and suppliers are currently experiencing high demand for close-control equipment, enabling companies to place a price premium on their products. The growth is being driven by a number of factors including the following.

• USA and European accounting directives.

Fan-coil units have lost market share to VRF systems and chilled ceilings — but have they found a new baseline?

• Development of virtualisation software .

• Online broadcasting and video streaming.

• High-density blade servers.

Growth is expected to decline after 2008, as there is a limited number of merchant banks and other end-users requiring data centres to be built. This will also affect increases in the average price in 2008 and beyond, when pressure on price is expected to be down.Compressor technology

The market will continue to experience shifts in compressor type, refrigerant and size. There has also been growth in recent technologies such as the Turbocor oil-free compressor with a shaft that runs in magnetic bearings and inverter screw-compressors.

Scroll compressors continue to erode the market share of screw and reciprocating chillers through further developments of larger capacity units with R410A refrigerant. As with screw compressors, scroll compressors are facing increasing competition from VRF systems, especially in refurbishment projects.

Reciprocating chillers have lost significant market share. Many manufacturers no longer offer them, and they now account for less than 3% of the market.

David Garwood is a market data analyst with BSRIA Worldwide Market Intelligence.

Over 90% of chillers sold in the UK in 2006 used scroll or screw compressors, and the use of reciprocating compressors continues to decline.

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