In a report it published in May last year, Research and Markets predicted that the value of the Middle East and Africa (MEA) heating, ventilation, and air conditioning (HVAC) market would exceed $16.2bn by 2020.
The report identified population growth and the recovery of housing markets in the region as two key factors helping to boost demand for HVAC equipment across sectors including commercial, industrial, and residential.
Research and Markets further noted that smart and green building standards, as well as increasing awareness among consumers of the benefits of using sustainable systems, were pushing HVAC suppliers to develop energy-efficient and technologically innovative products.
Johan Samuelsson, vice president and general manager of Trane for the Middle East and Africa, offers a similar assessment, saying that “sustainability is playing a major role in shaping the HVAC market”, particularly in the UAE, owing to policy frameworks like Vision 2021.
“With sustainability at the heart of [the] country’s agenda, the HVAC market has to move towards reducing energy consumption while delivering efficiency,” he tells Construction Week. “Doing more with less is a fundamental approach that will direct companies to employ a ‘green thinking’ strategy in their product development.”
The adoption of green strategies is especially important in light of climate change concerns, as Samuelsson explains: “With global temperatures rising, the installation of cooling systems is no longer considered a luxury but a necessity. Furthermore, residential and commercial construction in the region is at an all-time high.”
To meet the growing demand for cooling equipment, Samuelsson says that HVAC manufacturers should focus on delivering not only the necessary quantity but also the required quality, pointing out that consumers are now looking for efficient and eco-friendly HVAC systems.
This trend presents an opportunity for the industry, he remarks, but notes that it could also serve as a challenge for companies that are not ready to adopt a sustainable approach in their business. This isn’t the case with Trane, he clarifies, emphasising that the company makes sure that its products meet market expectations.
“The Middle East is an early adopter of technology enhancements and trends,” explains Samuelsson. “Connected buildings, smart systems, and wireless controls are some of the [products] that we’ve seen our customers show an interest in when talking with the Trane Building Advantage team, [which is] a global business that offers energy-efficient solutions to facility owners and managers.”
Variable refrigerant flow (VRF) technology is also proving to be a cost-effective option for consumers, particularly for those seeking to cool small spaces, he continues, citing the Trane Variable Refrigerant (TVR) as an example.
“Now in its fifth iteration, it allows owners to work around space constraints by placing the unit on the rooftop or even away from the building. Moreover, the facility incurs lower energy bills since TVR units are modular and scalable to suit [varying] cooling requirements,” he elaborates.
Like Samuelsson, Magdy Mekky, chief executive officer of Gami, is witnessing greater acceptance in the market for VRF systems. He tells Construction Week that they are in high demand, along with inverter technology.
Having also observed the Middle East market wising up to the benefits of energy-efficient HVAC equipment, Mekky says that “rising electricity prices and new energy legislation” are creating opportunities for local suppliers with the “ability to design, engineer, and manufacture” the kind of products being sought by the market.
To make the changing trends work to their advantage, Mekky suggests that companies look into leveraging “scalable operating models to capitalise on local market opportunities”. He also recommends that stakeholders look into widening the scope of discussions in the industry to encompass not just energy-related concerns but also operational and capital costs, as well as performance-based infrastructure.
For the public sector, on the other hand, the opportunity lies in harmonising standards and regulations, notes Mekky, stating that variations in legislation across the GCC pose a challenge to manufacturers serving the region.
And then there is the issue of oil prices, which Mekky describes as a key factor in dictating the performance of the regional HVAC market. “The major risk to businesses in the region is the dip in oil prices,” he says, explaining that uncertainties around oil prices negatively impact the region’s investment climate, and tend to lead to governments cutting spending and capital projects being scaled back.
“As such, any decline in oil prices [puts a] damper on HVAC market volume growth,” he adds.
Although he shares Mekky’s concern about the oil sector and its influence on the HVAC industry, Arvind Bhatnagar is adopting a more optimistic outlook, saying: “There have been some challenges in certain GCC countries due to the past effect of oil prices, but that has ebbed out and the economy is back on track.”
Talking specifically about the UAE, the general manager of Technical & Trading LLC (TTE) continues: “Speaking from a contractor’s point of view, I have seen steady growth in the market, fuelled by the emphasis on infrastructure development by the government of Dubai. The expansion of utility, communication, sewerage, water, and road [facilities] is leading the way to sustained consumption.”
He believes that this growth will continue in the coming years, noting that market boost from infrastructure activity is “not a one-year phenomenon”.
“This will keep driving the HVAC business for the next two years at least, and then [the market] will stabilise as the time will have come to replace equipment installed 15 to 20 years back,” says Bhatnagar. “So I see a healthy cycle. Neighbouring GCC markets are also experiencing a need to invest in infrastructure and, thus, their HVAC markets are bound to grow [as well].”
Commenting on the opportunities presented by new legislation, Bhatnagar points out that there’s a need to regulate HVAC equipment manufacturers in order to ensure that their products can withstand the harsh conditions of the Gulf.
Bhatnagar tells Construction Week: “A lot needs to be done by manufacturers to ensure [that] their products are suited to our harsh climate and are energy efficient.”
He expands on this, citing microchannel technology as an example, and revealing that it has been adopted by many chiller manufacturers.
“Their claim is that it is better suited to dusty conditions, but [the] reality is far from [the] assumption,” he says. “It is just cheaper to produce than copper coils.
“There are 30-year-old installations where [the] coils are intact in outdoor units, [while there has been an] eight-year-old variable refrigerant flow (VRF) installation where we had to replace [the] entire HVAC equipment, as [the] untreated coils had just powdered away,” he explains, adding that not all of the units currently coming into the GCC have energy-efficient motors, and that “almost 80% have just 30% to 40% efficiency”.
“The fan blades are mostly stamp design and aerodynamically inefficient. Just these two factors control 40% of [the] power consumed by HVAC equipment. An introduction of IE3 motors and the right aerodynamically designed blades can cut power consumption,” he says.
These challenges highlight the importance of introducing regulations and benchmarks to the industry, according to Bhatnagar. He continues: “The opportunity is to start regulating HVAC equipment and setting benchmarks for manufacturers. Equipment with untreated coils and inefficient motors and fan blades should be discouraged, and imports should bear third-party certified coils protection for a minimum of 1,500 salt spray hours.”
Bringing up district cooling, Bhatnagar reveals that it is now in high demand “as it offers a better carbon footprint and is more energy-efficient [than other cooling technologies]”.
“The [UAE] government has correctly taken the lead by specifying areas for district cooling,” he adds, concluding: “Sustainability is the key driver of [the HVAC sector]. Efficiency in power consumption, and cutting down on cooling waste through building management systems [BMS], new refrigerants, and [greater] energy efficiency are just a few factors that will determine the course of the industry in the near future.”
Source: Construction Week Online
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