• Contractingbusiness 947 82979almquist
    Contractingbusiness 947 82979almquist
    Contractingbusiness 947 82979almquist
    Contractingbusiness 947 82979almquist
    Contractingbusiness 947 82979almquist

    Refrigerant Resolutions

    Nov. 1, 2008
    The 2010 phaseout of R-22 in new equipment, plus the tougher economy we'll face in 2009, pose a two-pronged challenge to the commercial refrigeration industry. Expanded service, improved customer communications, and increased refrigerant stewardship are ways to stay ahead of the curve.

    With commercial new construction floundering in the high waters of the U.S. economic crisis, commercial refrigeration contractors seeking to stay afloat must continue to provide the best service possible to existing customers. That activity includes refrigerant leak prevention, refrigerant recycling to improve the stockpile of R-22, alternatives to R-22, and enhanced service to customers who have delayed new equipment installations.

    Contracting Business spoke to contractors, manufacturers, distributors, and refrigerant reclaimers to gain some insight into what lies ahead, and what action they’re taking to help the industry better prepare for 2010.

    Increased Service Opportunities
    Historically, customers prefer to do all they can during recessions to maintain their present equipment. Therefore, smart refrigeration contractors will likely want to do all they can to increase service offerings to price-conscious customers.

    “With the downturn in new building, companies and individuals will be focused on service and service-related products,” according to Gordon McKinney, vice president and COO of alternative refrigerant supplier Icor, Indianapolis, IN. The alternative, McKinney says, is business failure.

    “I’ve spoken to the owners of residential HVAC companies who have shut down their new construction divisions and are building up their service sides,” McKinney says.

    Bill Almquist, CEO of Almcoe Refrigeration Company, Dallas, TX, says many of his customers have expressed strong interest in system maintenance as a way to address energy efficiency.

    “They see the benefit of getting the equipment back to its original condition as it relates to cleanliness, recommissioning, and the installation of oil management systems, which enhance the efficiency of condensing units, particularly on rack systems,” Almquist says.

    “There also seems to be interest in retrofitting improved controls onto rack systems. Newer devices provide tighter temperature control due to the speed of the processors.” Almquist agrees with McKinney that the commercial refrigeration industry is riding the crest of an economic wave related to new facility construction, and he’s getting his team ready for a demanding, service-oriented stretch.

    “We’re focused on further educating employees so we can have the best service technicians possible. Service will drive our industry through the next business cycle more than new installations,” he says.

    Dan Steffen, vice president of AAA Refrigeration Services, Inc., Bronx, NY — the Contracting Business 2008 Commercial Refrigeration Contractor of the Year — says AAA continues to work with customers to help them understand their options and save energy.

    “Our customers still have a high level of uncertainty surrounding the replacement of R-22. Nobody has a definite idea of how it’s ultimately going to end, and the incentive for some of our customers to make any decisions related to alternatives isn’t there yet,” Steffen says.

    “The majority of our customers are locked in to inclusive contracts that specify standard refrigerants. In the meantime, we’re focusing our efforts on the things that save our customers energy whenever possible. Energy dollars are still high, and utility costs are a major portion of a supermarket’s energy usage. In our consultations with customers, we encourage them to pursue preventive maintenance to keep their equipment operating at peak performance, and to replace equipment that’s beyond its lifespan.”

    25 Million Pounds of Leaks
    Expanding your service offering to include refrigerant leak prevention is just the tip of a significant money- and refrigerant- savings iceberg.

    “Leaky systems are the worst thing for our industry,” says Ted Atwood, president of Polar Technology, a refrigerant reclamation and sales company based in Nashville, TN. “There’s well over 100 million pounds of R-22 that was sold in the U.S. in 2008. If the average leak ratio across the industry is 25%, that means 25 million pounds of it will eventually be lost. If the Environmental Protection Agency’s (EPA’s) requirement for 2010 is for an additional 35% reduction in available material, we could offset the demand just by tightening up leaks.”

    Atwood believes the key to refrigerant leak awareness, stewardship, and fiscal responsibility rests in up-front communication with customers.

    “The technician is missing out on the opportunity to show refrigeration customers the correlation between their high electric bills and the leak rates of their equipment,” Atwood says. “Ideally, the contractor could say, ‘If you let us button up the leaks, and put you on a routine maintenance program, we can save you money and extend the life of the system until you’re ready to invest in new equipment.’ And then, the contractor can make a suggestion for new equipment down the road.”

    Imagine that: communication — the bedrock of civilization — can go a long way in solving the industry’s refrigerant supply problems.

    “We could focus on simple, economic issues consumers can understand related to leaks,” Atwood says, which in turn would start a “chain of awareness.” Leak prevention would foster stewardship awareness; with increased awareness, the contractor/customer par tnership will become more cooperative and less adversarial. We save customers money, and they help us look down the road to our futures,” he says.

    Polar Technology’s reclamation program is designed for contractors with excess refrigerant and who don’t want to carry it in inventory for an extended period of time. Polar also works with companies having pending refrigerant projects. The program enables contractors to realize higher profits through inventory control, and fewer hassles, with simple, easy to follow steps. (Visit www.refrigerantauthority.com for additional information. Also, see Atwood’s guest editorial (CB, Oct. 2008, p. 8).

    Gordon McKinney of Icor says contractors have expressed concern about the cost and safety liabilities related to refrigerant recovery.

    “Many programs require contractors to do things like transfer gas from small to large cylinders,” McKinney says, and says Icor’s ‘Cylinder Swap’ program will enable contractors to pay a basic fee, and simply exchange a full cylinder for an empty one. (See www.icorinternational.com for additional information.)

    As previously reported in Contracting Business (see “R-22 Recovery Frozen in Time,” CB, Jan. 2008, p.64), the EPA’s plan to eventually eliminate R-22 from circulation is putting a strain on existing industry supplies. According to McKinney, the 2015 post-production limit on R-22, when compared to predicted service needs, shows a gap of 40 million pounds. Alternatives can help fill the gap, but reclaimed R-22 will also be in high demand beyond 2010. The good news is, there’s plenty of R-22 out there; contractors just have to go get it, sooner rather than later. (See Editor-in-Chief Mike Weil’s editorial, “Is Your Head in the Sand?”, i, April 2008, p. 10.)

    Supermarkets Want Change
    Ken Ponder, owner of Refrigerant Management Services (RMS) of Georgia, Alpharetta, GA, has seen a flurry of conversion activity away from R-22 by supermarkets. RMS manufactures alternative refrigerants such as R-421A and R-420A. It also offers an EPA-certified reclamation service.

    “Some rather large concerns are feverishly converting to HFC refrigerants,” Ponder says, and reveals some staggering facts that help explain the urgency among supermarkets to repair leaks.

    “A typical 100-store supermarket chain operates with about 400,000 pounds of refrigerant in its refrigeration and air conditioning systems. Assuming an average cost of $6 per pound, this equates to a $2.4 million asset. An average annual leak rate of 25% (the EPA estimate) results in a loss of $600,000 worth of refrigerant. Reducing the leak rate to 5% would save a chain $480,000 per year.”

    Therefore, Ponder says, grocery store chains are becoming more interested in the cutting edge developments in refrigeration. More of them are becoming aware of the need to convert to an HFC as a way to help the environment, and as a smart business decision. Ponder says RMS’s reclamation division is enjoying a near-30% increase in R-22 reclamation activity.

    “Price is the driving issue. R-22 will cost an estimated $10 per pound next summer,” Ponder predicts.

    According to Ponder, refrigerant reclaimers across the U.S. are taking steps to ensure their voices are heard. For starters, a group of 17 of the largest reclaimers met during the Heating, Airconditioning & Refrigeration Distributors International (HARDI) fall conference, Oct. 27-29, in Phoenix, AZ.

    “Because refrigerants have been under such attention, we started to talk more with our reclaimer members,” says Talbot Gee, vice president of HARDI. “We’ve found that oftentimes distributor and reclaimer interests are aligned. We’ve also found there’s been no vehicle for the reclaimers to talk, network, and work together. It seemed like a natural fit for HARDI to be that vehicle,” Gee says.

    The distributor/reclaimer meeting helped establish agreement on those things on which distributors and reclaimers have a common interest. Gee says HARDI wants to do all it can to increase refrigerant recovery, and assist in the responsible use and disposal of refrigerant. “Reclaimers are absolutely important to the process,” Gee says.

    “Refrigerant reclaimers will be greatly altered by legislation if we don’t do something as a group,” Ponder warns.

    “For example, there’s a possibility the Federal government could mandate the use of $90 refillable cylinders, rather than the $9 disposable cylinders we currently use. There’s a myth that disposable cylinders end up in landfills, which isn’t true; they’re recycled,” Ponder says.

    The need to reclaim refrigerant is receiving increased attention as an important part of managing refrigerants, says Craig Thomas, marketing manager of refrigerants for Arkema, Philadelphia, PA.

    “Contractors are exploring their options for the R-22 phasedown, and are going with R-410A for new air conditioning systems, or implementing retrofits using products such as Arkema’s R- 427A,” Thomas says. “Arkema believes there is and will continue to be a larger customer need for reclaimed refrigerant. Contractors realize they have to take steps to ensure they have sufficient R-22 to meet customers’ demands.”

    Thomas tells Contracting Business that Arkema is developing a program that will make refrigerant reclamation a good value. It will be easy, dependable, and contractors will be able to work through a full-service wholesaler.

    “In the past, reclamation wasn’t easy for wholesalers, therefore they in turn didn’t market it heavily to contractors. There were hidden fees and miscellaneous costs,” Thomas explains. “Contractors and wholesalers want a dependable program.”

    Alternatives: Ammonia & CO2

    Bruce Badger, president of the International Institute of Ammonia Refrigeration, Arlington, VA touts the value of ammonia as a refrigerant. He believes ammonia could go a long way in serving the commercial supermarket industry, but it’s a hard sell due to existing attitudes and technical challenges.

    “Unlike Europe where there’s been fairly significant activity, we haven’t seen a great deal of interest in the U.S. regarding the use of ammonia in supermarkets,” Badger says.

    According to an IIAR white paper, since ammonia is a common, naturally occurring compound in the environment and can be naturally broken down into harmless hydrogen and nitrogen molecules (the atmosphere consists of nearly 80% nitrogen), it’s often referred to as a “natural refrigerant”

    “When it escapes into the atmosphere, it does no harm to the ozone layer and doesn’t contribute to global warming, unlike the synthetics,” Badger says, and believes there’s a way to reconcile the benefits of ammonia with its perceived risks.

    “Natural gas is dangerous, yet we willingly pipe it into our homes. We know gasoline is explosive, yet we drive around with it in the back of our cars. It’s a question of understanding the risks and benefits, and being careful,” Badger says.

    Badger says carbon dioxide (CO2) and ammonia have been combined in some supermarket applications in the U.S., and worked extremely well. However, because of a lack of trained operators, the ammonia systems were reverted back to synthetic refrigerants.

    “This lack of training in ammonia is going to have to change soon, because of the elimination of R-22, and the significant cost of the synthetics and oil they must use with them,” Badger says. “It’s a cost issue, and it’s a question of when rather than if.”

    The first CO2 cascade system for low temperature refrigeration to be installed in North America is now hard at work at the Price Chopper supermarket in Saratoga, NY.

    The system was designed by Hill Phoenix, Conyers, GA. CO2 is condensed by a medium-temperature refrigeration system using R-404A, which also chills propylene glycol for the store’s dairy and beverage departments. The technology is used in the store’s new frozen food and ice cream departments.

    Hill Phoenix sources say a major advantage to using the CO2 in a cascade system is reduced cost of refrigerant. CO2 is a mere $.50 per pound compared to $7 or $8 per pound for HFCs. Other advantages include smaller line sizes, reduced copper piping, and increased system efficiency.

    Options Abound: Pick One or Fail
    By now, the R-22 conundrum and its solutions should be common knowledge to the vast majority of commercial refrigeration contractors in the U.S.

    Now, it’s up to you. If you’ve taken steps to educate customers and technicians in the business and technical ramifications, congratulations. If you’ve improved your leak detection and prevention program, and are reclaiming R-22 more aggressively, bully for you. If you’ve explored alternatives and are going to give them a try, we wish you much success.

    If you plan to do nothing, do the industry a favor and close up shop.