But cost and industry inertia remain barriers to adoption, says shecco researcher.
Derek Hamilton, shecco
Low-charge packaged ammonia refrigeration systems are gaining momentum in the U.S., although costs remain a constraint for some potential users, according to a presentation at the International Institute of Ammonia Refrigeration (IIAR) 2018 Conference & Expo in Colorado Springs, Colo., last month.
The presentation was delivered by Derek Hamilton, VP of business development at shecco America, publisher of Accelerate America. Hamilton is working on a comprehensive study called “World Guide to Low-Charge Ammonia,” which will be published this year.
(To participate in a survey on low-charge ammonia technology that will be used in the study, click here.)
Supermarkets, craft breweries and small wineries are among the businesses that hold “huge potential” for the installation of low-charge packaged ammonia applications, he said. Another area with potential in the U.S. is the HVAC market, where ammonia has long been used in Europe. Centralized systems used by cold storage and food-processing facilities are also being redesigned to dramatically cut the amount of ammonia used.
Citing research conducted by shecco, Hamilton said the ammonia refrigeration industry has an opportunity to reach these markets if it can offer systems that are cost-competitive with the conventional refrigeration systems users currently deploy.
“One of the challenges for wineries and breweries is that these are often very cost-driven markets,” Hamilton said. A grape farmer that opens a small winery, for example, “doesn't want to spend a premium on his refrigeration system for the wine-making part of his business.”
Live polling of the audience during the presentation revealed that 40% of attendees believed that cost was the biggest barrier to adoption of low-charge ammonia technology, followed by inertia in the industry at 31%. The lack of credible performance analysis and a lag in the adoption of codes and standards were each seen as barriers by 13% of respondents.
In addition to concerns about costs, some users continue to worry about potential safety concerns with ammonia systems, Hamilton said, though low-charge systems reduce the risk posed by ammonia leaks.
An ammonia leak last year at an ice rink in British Columbia resulted in the deaths of three people, which prompted calls for the banning of ammonia as a refrigerant in Canadian ice rinks.
“Unfortunately, there's been a lot of negative publicity,” Hamilton said. “When there are injuries or fatalities related to ammonia systems, it really doesn't help the image of ammonia.”
He said the industry is working hard to educate people about the safe use of ammonia and “to show that it's actually a very safe refrigerant when used properly.”
Responding to a question after his presentation about whether supermarkets might be concerned about using ammonia in areas where food is stored, Hamilton said the risks have been minimized by the advent of smaller charges and the sequestration of ammonia on the roof (with a secondary fluid used in the store), along with gas detectors and other controls.
A significant challenge facing the industry in the U.S. is the uncertainty around the federal regulatory environment, Hamilton said. It remains unclear, for example, whether the U.S. will support the Kigali Amendment to the Montreal protocol, which calls for the phase-out of HFC refrigerants that have a high global warming potential (GWP).
Such a phase-out is seen as boosting the potential market for ammonia systems, which have a GWP rating of zero.
Meanwhile, states such as California have taken the lead in seeking to reduce emissions, which Hamilton said was “very encouraging.” He cited the efforts of the California Air Resources Board (CARB), which is seeking to reduce greenhouse gas emissions to 40% below 2013 levels by 2030, and new legislation introduced by State Senator Ricardo Lara, called the California Cooling Act, that incentivizes the transition to environmentally friendly refrigerants.
CARB has also proposed a ban on new stationary equipment using any refrigerant with a GWP above 150 by 2020.
“That’s an ambitious target, and this is where the ammonia industry and other natural refrigerants really are going to have to step up to help California meet those goals,” said Hamilton.
As high-GWP refrigerants have been phased out in Europe and elsewhere, the costs of these refrigerants have been rising, Hamilton said. Their cost quintupled in 2017, and could be 20 times more expensive in 2018. These cost increases are helping drive demand for alternative refrigerants such as ammonia.
“This is exactly the trend that we will expect to see in California when some more regulations come in,” said Hamilton, noting that the trend is expected to eventually expand to other states as they adopt similar regulations.
Nearly half — 45% — of Hamilton’s audience during live polling said regulatory compliance was the primary driver for low-charge ammonia systems, followed by safety at 41%.
“People are saying if the contractors don't get on board and look at this new technology, then they're going to regret it in the future.”
– Derek Hamilton, shecco
In order for the industry to capitalize on the burgeoning opportunity for low-charge ammonia refrigeration systems, contractors need to get on board, Hamilton said.
“There's a lot of feeling out there that the ammonia industry has been plodding along for decades and decades and doing the same old thing,” he said. “There's some reluctance to change.”
shecco’s research shows that there may be some reluctance in the contractor community to embrace low-charge packaged ammonia systems because they are concerned that such systems are not as profitable, Hamilton explained. However, “just as many people are saying if the contractors don't get on board and look at this new technology, then they're going to regret it in the future,” he said.
In addition, it can be difficult to demonstrate the efficiency of low-charge packaged ammonia systems for end users because there have been so few deployments.
“As we get more and more low-charge packaged ammonia systems out there, we will get more reliable data,” Hamilton said. “That's going to help really put this question to bed, but in the meantime, we're relying a lot of the time on claimed performance, and that's not really a great place to be.”
There has been some testing of low-charge and packaged ammonia systems in laboratories, which should yield some reliable data that demonstrates the efficiency of these systems, Hamilton said.
Changes in the business models of refrigerated warehouses could also present opportunities for low-charge ammonia systems, he said. While these facilities historically have been small, family-owned businesses that held long-term contracts, increasingly they are being taken over by investment firms that execute short-term contracts that might require dividing their facilities into separate rooms with different temperatures.
That kind of operation is a strong candidate for the use of packaged ammonia systems, Hamilton explained.