At the recent 2020 AHR Expo in Orlando, Florida, Omdia analysts were among more than 50,000 attendees and 1,900 exhibiting companies attending the show. The world’s largest event on heating, ventilation, air-conditioning, and refrigeration (HVACR), the Expo attracts OEMs, engineers, contractors, facility operators, architects, educators, and industry professionals from around the globe to share ideas and to showcase the future of HVACR technology.
This insight summarizes below the key themes and takeaways that our analysts drew from the event:
The continuing digitalization of industry
While the Industrial Internet of Things (IIoT) continues to be leveraged in new ways throughout the industrial automation sector, the IIoT value proposition remains the same: to reduce downtime and increase overall efficiency.
At this year’s AHR Expo, held Feb. 3-5, a noticeable trend was the increased focus on connectivity in pumps, fans, and compressors, instead of strict emphasis on component-level efficiency alone. This is understandable, given that most equipment has now reached a stage of high efficiency. Moreover, a big difference exists between the theoretical efficiency of industrial equipment and actual achieved efficiency, when motor systems are run at part load and are often improperly sized. As a result, the focus has shifted to a broader awareness of advanced technologies to ensure proper communication between humans and machines. For IIoT, conversation on the subject has gone well beyond sensor implementation in motors and drives, with larger market players beginning to invest in creating algorithms that can give customers insights and actionable items, based on data that has been collected.
Among the top players in the HVACR market, two were featured at the Expo: ABB and Grundfos. ABB calls its IIoT offering “ABB Ability,” which leverages sensors in its electrically commutated (EC) motor, EC titanium bearing, and EC drive to detect differences in metrics from set baselines; the collected data is then stored for up to two months. The Grundfos booth served up similar solutions, with fully customizable connectivity offerings that allowed end-users to take advantage of properly sized equipment for different applications and enabled them to get more accurate readings of the collected data.
More than just highlighting pump-system efficiency, however, were use cases that sought to convey the value of services such as Grundfos Building Analytics, a tool that is also beneficial to the company by letting them pull data and offer constructive suggestions for commercial buildings.
Grundfos is not the first—or the only one—to apply their component-level expertise to broader applications. Having tracked the smart buildings and building automation markets for some time now, Omdia has seen market leaders in other industries lift a page or two out of the Grundfos playbook. To this end, the expectation is for the user experience to continue dominating trends, remaining a priority for suppliers hoping to break into the smart buildings industry.
Grundfos and ABB are not alone in their ability to provide customizable baseline readings for motor systems in different environments, but it is clear they are leaders in the effort to make IIoT solutions scalable. One misconception, for instance, is that IIoT development is too expensive and involves a long payback period. However, that is not usually the case. As an example, a report from an end-user stated that a bearing with a temperature sensor successfully detected a fire in a plant after recording higher-than-expected ambient temperature and a fast response time. In this situation, the plant’s IIoT system identified an abnormality in operating conditions early in the cycle, triggering an appropriate response that prevented further damage from occurring while also delivering an immediate payback.
Grundfos also displayed a completely packaged and customizable pump system called the Hydro Multi Pump Controller (MPC), as shown in the photo below. This stands out because it is an example of how HVAC equipment and mechanisms designed for a specific purpose can be harnessed to resolve other issues in the industry. While it often takes time for a contractor to find all the right components to assemble a pumping system, the Hydro MPC is being positioned by Grundfos as a one-stop shop able to offer a full solution in less time—especially helpful for time-sensitive applications.
The Grundfos Hydro MPC is a packaged pumping system made to simplify and optimize pumping in various applications, such as pressure boosting, HVAC, municipal water transfers, and industrial processes. Photo taken by Omdia analysts attending the AHR Expo 2020 show.
In the US, many distributors offer Software as a Service (SAAS) while leveraging IIoT-enabled hardware from large manufacturers. In markets such as Europe, the manufacturers themselves are leading the way. There has also been increasing demand for SAAS-type services in industries other than HVACR, most notably seen in the segments below:
The growing presence of IE5 motors and permanent magnet (PM) technology
Although permanent magnet (PM) motor technology can be traced back to a time before the year 2000, only recently has this technology become more cost-efficient, garnering more interest from pump and fan manufacturers.
This year at AHR, we noticed more manufacturers highlighting PM pumps and fans on the show floor via EC motor technology. EC motors utilize permanent magnets and have historically been deployed in fractional horsepower applications, such as home appliances. The advantage from this technology is that it allows motor systems to have higher levels of control and energy efficiency while simultaneously reducing the amount of slippage.
At present, the trend in demand is clearly headed toward requiring motor manufacturers to provide EC technology at higher output powers to offer customers more savings. To explain the tradeoff when end-users must decide which products to incorporate, the use of EC and motor drive technology was explored in a new AHR show feature called free educational seminars. A lot remains to be seen with how manufacturers launch new motor designs, but currently EC motors become cost-prohibitive at approximately 10 horsepower—at which point a traditional induction motor paired with a drive is often used for variable-speed applications. The benefits of a single unit that can control a motor’s speed is certainly enticing to an increasing number of industrial pump and fan users, so Omdia expects this to grow in prominence next year at AHR Expo 2021.
ABB also showcased its new EC titanium-integrated motor drive with IE5 technology. This highly efficient integrated motor drive can deliver up to 16% efficiency gains compared to alternative motor designs. The technology is currently being leveraged in fan applications, predominantly with air handling units, exhaust fans, lab fans, and fan walls/arrays; as well as in data centers.
One company that really stood out in terms of efficient motor offerings was the AHR Innovation Award winner for the “Ventilation” category, Infinitum Electric. Touted as a breakthrough HVAC motor, the printed circuit board (PCB) motor from Infinitum is significantly smaller, smarter, and quieter than traditional electric motors, while also reducing costs for the customer by 25%. This is a noteworthy solution for the plenum fan market, we believe, and Infinitum is confident that the technology can be rolled out into other fan and pump applications.
Legislation affecting the industry
Now that the EU has announced its own set of Minimum Efficiency Performance Standards (MEPS) for appliances, lighting, and electrical equipment, manufacturers within the bloc must begin to adapt their product offerings.
Starting July 2021, electric motors with an output of 0.75kW and higher must attain a minimum efficiency standard of IE3 status. Furthermore, the exception to utilize an IE2 motor in tandem with a variable frequency drive (VFD) will no longer apply. By July 2023, motors within the 75–200kW range—except for 8P, brake, or other explosion-proof motors—will need to meet the IE4 minimum efficiency standard.
This means that over the next few years, the European market will see growth in higher-efficiency motors, which could potentially mean a rise in the use of synchronous motors that utilize PM technology—if demand allows for more economies of scale in the manufacturing of these products. According to Omdia estimates, the EU accounts for 20% of global low-voltage motor shipments annually, which means that these regulations will have a direct impact on the motor market.
Furthermore, the commercial HVACR industry accounts for about 40% of low-voltage motor shipments in Europe, highlighting the significant effect that energy efficiency legislation can have on the whole industry as motors become more efficient. While motor prices could increase during this transition, prices overall are likely to be more affected by outside factors, such as commodity pricing, economic dislocation amid coronavirus fears, and a natural delay in the full adoption of any government policy that may or may not have an efficient system for enforcement.
The state of the HVACR and building automation markets
The energy on the show floor at the 2020 AHR Expo was quite electric, despite taking place at the onset of the coronavirus (COVID-19) outbreak. Alongside all the optimism about the HVACR and building automation markets was an equal amount of hand sanitizer and general confusion or hesitancy about the economic impacts that could be expected. Even so, show participants expressed a sense of optimism, which we believe can largely be tied to the economic recovery occurring in the commercial buildings sector, as well as to the strong overall US economy.
There were also plenty of thought-provoking discussions on the practice of hiring and retaining key talent in the industry. The various free seminars offered at the show revolved around the topic of best practices, centering on how new technologies are rapidly penetrating more than just the HVACR industry. As a result, many of the conversations indicated, companies are now making people their primary focus, which ties nicely into the increasingly common theme of putting people and solutions—not company revenue or growth prospects—first. Change has also swept the building automation industry, which has shifted completely over the last decade to focus more on the end-user experience, a product of wanting to keep employees happy. On the manufacturing side, it was very encouraging to see women being boosted in a historically unrepresented industry.
Also noteworthy is the ongoing emphasis on packaged solutions over individual products, which helps correct the current lack of enough progressive-minded engineering talent to bring modern solutions to modern issues in the field. This explains why products such as the Grundfos Hydro MPC are important, because they will eliminate time otherwise spent coordinating logistical nightmares, allowing manufacturers instead to showcase their expertise, which is then likely to win repeat business and bring in new revenue streams.
By increasing focus on services, boosting the technical know-how of industry players, and encouraging more diversity in the industry, new efficiencies are being achieved. Indeed, as the AHR Expo amply demonstrated, there is much to be excited about in the industry today.
From the various points presented by this insight, the Omdia team at AHR offers these final concluding thoughts:
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