Richard Branson takes on the air conditioning industry

Friday, January 25, 2019

Serial entrepreneur Richard Branson’s latest target for “disruption” is the air conditioning industry and he has condemned its record on energy efficiency as “pathetic”. Graeme Fox* thinks he is barking up the wrong tree.

“Entrenched manufacturers” refuse to do what they are told and this “complacent” sector needs a major shake-up, according to world famous marketeer and Virgin founder Richard Branson. He says air conditioning technology has not changed “fundamentally” in 100 years and that it is time to “do things differently”.

Our industry has clearly piqued his interest because, as he rightly points out, it is one of the world’s largest at approximately 100 billion dollars with the potential to grow to four times that size by 2050.

“As our planet warms, we need it [air conditioning] more than ever to keep our people cool,” he said in a recent Virgin Blog. “Worldwide, by 2030, extreme heat could lead to a $2 trillion loss in labour productivity. India’s economy alone stands to lose $450 billion (not to mention the 200 million Indians exposed to dangerous heat conditions each year).”

He believes that air conditioning manufacturers have “barely scratched the surface of their technology potential” before suggesting that “even the most advanced products have only achieved 14% of their maximum theoretical efficiency”. A figure he describes as “pathetic”.

Theoretical efficiency
He compares our performance with LED lighting, which he claims has achieved nearly 70% of its “maximum theoretical efficiency” and solar panels, which are at 40%, according to his calculations.  Well, maybe.

“If we can trigger a major technology change (in cooling), it could be the single biggest technology-based step we can take to arrest climate change,” he opines.

But what, you might well ask, does Mr Branson know about air conditioning? Well, actually not that much if his pronouncements are analysed in any depth.

It is all very well trying to polish your ‘green credentials’ at the expense of an important global industry, but not a little galling when you are involved in a fledgling business venture that involves burning thousands of tonnes of fuel to send people on pleasure cruises into space. I seem to remember that Mr Branson also had something to do with more conventional aviation for some years– not an activity renowned for its planet friendly credentials.

Where he gets 14% efficiency from is a mystery, but it is clear he is talking primarily about basic residential cooling systems. The air conditioning industry has made huge advances in energy efficiency in recent years and, unless he is talking about some yet unknown technological breakthrough, I think 14% is a scurrilous suggestion.

However, there is no doubt that such a high profile figure turning his attention to air conditioning is not all bad. His intervention was in support of the launch of the Rocky Mountain Institute’s $3m Global Cooling Prize, which is supported by the Indian government.

This is, therefore, a welcome opportunity to focus on how we can meet soaring demand for cooling worldwide in the most environmentally sustainable way.

Mr Branson wouldn’t know it, but the air conditioning industry was fixated on this itself more than a decade ago. Many of us were great advocates of something called TEWI (Total Equivalent Warming Impact) – remember that?

This is the measure that takes into account, not just the global warming impact of a refrigerant gas, but also its energy efficiency so giving a more rounded and meaningful assessment of its environmental credentials – or otherwise.

This methodology was not popular with environmental lobbyists at the time because it highlighted the inefficiency of many of the so-called ‘green’ refrigerants that were emerging to replace CFCs and HCFCs. As a result, since then the conversation has been largely about phasing down global warming gases to avoid damage caused by possible leakage – not about the wider impact on the overall efficiency of cooling technology.

Politicians and environmental pressure groups forced the agenda onto theoretical leakage of refrigerant rather than the more rounded argument about TEWI because banning things makes better headline material.

Leakage
We have, to our credit, made huge advances with minimising leakage subsequently thanks to the F-Gas Regulation, but made slower progress on the wider TEWI agenda because the political fire was pointing in the other direction.

Mr Branson is correct when he says we should be trying to convince governments to “aggressively raise energy efficiency standards” as well as phasing out the most “damaging refrigerants” as he calls them. The point is that this is a delicate balance to achieve and, if the Global Cooling Prize helps to reset political objectives then Mr Branson’s intervention will be beneficial – especially if it can find a way of driving up efficiencies without making the units prohibitively expensive and, therefore, unlikely to gain traction in the market.

The award aims to “shine a spotlight on potential breakthrough cooling solutions” and its $3m prize money could go to something radically new in the field of cooling technology. Who would not welcome that?

Get your applications in (www.globalcoolingprize.org) and show Mr Branson – and his fellow ‘disruptors’ – that our industry did not just stumble upon air conditioning a century ago and has done very little innovation since. Rather it has made enormous progress in improving performance ever since.

 

Legislators and outside disruptors may make a difference, but it will be manufacturers with their deep understanding of the technology who will, ultimately, deliver the answers. It is their gradual improvements in existing technology that will allow us to minimise the negative impact of the cooling industry while maximising the positive benefits it brings to people all over the world – particularly those in developing nations subject to extreme temperatures.

A recent report from the International Energy Agency (IEA) found that by using technology that is already available it would be possible to keep building energy use at today’s level until 2040 despite a predicted 60% increase in new construction and a likely doubling of air conditioning capacity.

In its Energy Efficiency 2018 report, the IEA said warmer temperatures, increasing population and economic growth has seen cooling energy use in buildings double since 2000 making it the fastest growing consumable in buildings.

The report concluded that the amount of energy needed to deliver the required level of space cooling to meet this growing built environment would more than double between now and 2040 without the improvements in energy efficient operation delivered by our industry.

By strengthening minimum energy performance standards (MEPS) for key equipment and appliances, such as heat pumps and air conditioning, along with targeted incentives, the IEA believes the world will be able keep energy consumption flat.

“While the efficiency of best available air conditioning technology has continued to improve, there is significant potential to close the gap between the best available technology and the market average,” the report says.

This strikes me as a more measured and helpful piece of research than Mr Branson’s ‘theoretical’ 14%, but it certainly did not achieve anything like the media attention of the Virgin blog.

However, there is a challenge here for us to ensure that the best and most cost-effective technologies, (that are already available, Mr Branson) are adopted as widely as possible. That should be a challenge that a top-notch marketeer would relish…surely?

*Graeme Fox is Head of Refcom – the industry’s original and leading F-Gas register.

 

 

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