Absorption Chillers Market is projected to expand and reach around US$ 2.0 Bn by the end of 2029
Absorption Chillers Makes Inroads by Surpassing the Electrical and Mechanical Chillers
As the optimum utilization of resources governs industrial success, modern industrialists take the highroad by adopting ‘less input-more output’ technology. This has engendered the ground-breaking evolution of a techno-economic system – absorption chillers, which use cost-effective fuel sources such as waste heat, hot water, steam, and natural gas to optimize the energy consumption of industries that have year-round conditioning requisites. Though high installation and maintenance costs leading to a long payback period might be a deterrent, substantial sales of absorption chillers are likely to persist, driven by the acute demand for greater efficiency.
The preference of end users gained by absorption chillers over their conventional counterparts, such as electrical and mechanical chillers, has inspired Persistence Market Research (PMR) to trace the enormous growth potential held by the landscape. PMR, in its incisive study, identifies the crucial factors that underpin and hinder the otherwise steady ride of the absorption chillers market, backed by reliable statistics and data.
Absorption Chillers Market – What’s on the Horizon?
Revenue from the absorption chillers market were around US$ 1.2 Bn in 2018, and a cohort of drivers are likely to sustain its growth inclination. Stringent regulatory norms requiring manufacturers to rethink their product designs and discard underperforming units are resonating with industrialists, as they demand value for price. This has urged manufacturers to develop energy-efficient, noiseless, and reliable absorption chillers to differentiate their offerings in the market.
In the efficiency-driven industrial landscape, absorption chillers are the exact innovation sought after, and manufacturers pacing to match the ascending demand will aid in scaling up the market. All-in-all, the future holds promising growth opportunities, and Persistence Market Research (PMR) estimates that, the revenue of the absorption chillers market will cross the US$ 1.3 Bn mark in 2019.
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Analyzing the Mega Trends Shaping the Future of the Absorption Chillers Market
Winds of automation are sweeping over industrial processes, and even absorption chillers are not immune to their effects. Programmable Logic Control (PLC) chillers are appealing end users with the capability of viewing the performance of these systems on wireless devices such as smartphones, tablets, and laptops. The trend of adopting remote-controlled absorption chiller systems is gradually gaining ground in industries, as profit-seeking industrialists find a window to save on the costs incurred by employing operational supervisors.
As industrialists are increasingly adopting environmental safety measures amid the rising pressure due to stringent government norms, solar-powered absorption chillers are making a significant place for themselves in the industrial sector. With governments cushioning the high installation cost in the disguise of subsidies, the adoption of solar-powered absorption chillers will further become convenient for end-use industries.
Developing countries are increasingly creating a goldmine of opportunities for the manufacturing sector, which is inspiring absorption chiller manufacturers to expend and expand in these regions. For example, Trane Inc. extended its absorption chillers rental service network in China, India, and the countries of Latin America to serve the small- and large-scale industries concentrated in these regions. Additionally, steady investments in the food & beverage and chemical industries across China and India are likely to create a revenue pocket for the absorption chillers market in the South Asia and East Asia regions.
Sustainability Implications for the Absorption Chillers Market
In the bid to meet the unmet demand of end users, manufacturers of absorption chillers are geared towards streamlining their growth strategies. Manufacturers are capitalizing on opportunities being surfaced, as a result of environmental-sustainability concerns raised by governments, and this is likely to urge end users to adopt compliant absorption chillers. Another manufacturing shift taken towards the development of noiseless and vibration-free absorption chillers with greater life expectancy will continue to remain sought-after in nascent manufacturing facilities.
As operating costs heavily rely upon COP (coefficient of performance), manufacturers are moving past single stage absorption chillers and focusing on the development of dynamic stage absorption chillers. The adoption rate of dynamic stage absorption chillers is likely to surpass that of the former, on account of their high COP that significantly reduces overall annual operating costs.
In the immediate future, even double stage technology is likely to be replaced, as absorption chillers with COP value as high as 1.8 are available in the market. For example, Thermax Limited recently announced the launch of triple stage absorption chillers that possess 30% higher COP as compared to double stage absorption chillers.
Absorption Chillers Market – Unmet Demand from the Maritime Industry to Offer a Sea Full of Opportunities
A sea full of growth opportunities await absorption chiller manufacturers, as the maritime industry encounters challenges such as increasing operational costs and waste heat, which, when emitted, negatively impact the environment. Waste heat can serve as a fuel source for operating absorption chillers, which can cool the vessel and upgrade its overall operational capability. The same is being leveraged by COOL4SEA – it filed a patent with the underlying aim of gaining a significant share of the absorption chillers market, with just a handful of players at play in offering cooling solutions for maritime applications.
Going forward, the maritime industry holds sustained growth opportunities for the absorption chillers market, as in the year 2018, over 65,000 ships were operating in the ocean, and this number is projected to grow at an annual rate of 3.5%.
Gauging the Competition Intensity of the Fairly Consolidated Absorption Chillers Market
The absorption chillers market can be characterized as a fairly consolidated landscape, with tier-1 players – Thermax Limited and Shuangling Eco-Energy Systems – accounting for nearly 20-25% of the market share, and generating a major chunk of revenue. Expansion of manufacturing facilities remains a key strategy for core players. For example, in 2019, Thermax Limited inaugurated a new manufacturing facility in Andhra Pradesh, India, to develop a broad array of vapor absorption chillers, heaters, and heat pumps in the initial phase.
Given that developing countries attract heavy investments from the manufacturing sector, market goliaths are substantially capitalizing on opportunities to set up their operational facilities in the region. However, in the steeplechase race to occupy a majority of the share in the absorption chillers market, the strategies employed by tier-2 players contrast with those adopted by market goliaths.
Tier-2 players such as Trane Inc., Broad Group, and Carrier Corporation occupy nearly 10-12% of the absorption chillers market share. Product launch remains a robust strategy for this batch of absorption chillers market players. For instance, in 2017, Trane Inc. announced that it has expanded its CenTraVac Centrifugal Chiller Portfolio, with the latent aim to increase its customer base and broaden its geographical reach.
Absorption Chillers Market Through the Lens of Our Seasoned Analysts
The author of the report has a positive take on the growth prospects of the absorption chillers market. Manufacturers who are taking the keywords – ‘automation’ and ‘efficiency’ into consideration while developing absorption chillers, will be able to leapfrog their competition, with innovation being their main weapon. European norms on eco-friendly designs and energy labelling are likely to lay a marked influence on the adoption rate of compliant absorption chillers. Since the non-industrial sector is approaching surpassing the currently high growth industrial segment of the absorption chillers market in terms of application, demand ascended from the emerging end-user segment can be leveraged as a lucrative growth opportunity.
Legislation on Energy Labelling and Eco-Design to Foster the Installation of Absorption Chillers in the Coming Years
Persistence Market Research’s report on the global absorption chillers market provides information about the key trends and developments, market dynamics, and forecast factors of the global absorption chillers market during 2019-2029.
Globally, the absorption chillers market was valued nearly US$ 1.2 Bn by the end of 2018, and is projected to expand and reach around US$ 2.0 Bn by the end of 2029.
End User Focus towards the Reduction of Energy Costs and Enhancement of Environmental Sustainability
Absorption chillers are primarily adopted in regions where the prices of the source fuel, such as waste heat or natural gas, are insignificant in comparison with electricity prices. This results in the reduction of the average annual energy cost, thus, decreasing the payback period of the product. Further, absorption chillers are eco-friendly as compared to their conventional counterparts, such as the former relies on refrigerants such as water, and eliminates the need for CFC and HCFC refrigerants, which are responsible for high Co2 emissions. Hence, increasing environmental concerns combined with reduction in average annual energy costs are increasing the adoption of absorption chillers, primarily in waste heat recovery applications.
CSP-Powered (Concentrating Solar Power) Absorption Chillers are Gaining Traction across Industries
Electric and other types of absorption chillers available across the globe consume large amounts of electricity, which, in turn, increases overall annual energy costs. This makes absorption chillers the only viable option (mainly solar-powered). Further, utilization of solar energy also offers a solution for power outage problems in regions that require chiller applications. For instance, in recent years, MTN Group (a South Africa-based prominent telecommunication company) commenced operations at its first cooling plant in the country, featuring an absorption chiller that utilizes cutting-edge solar technology and uses water as a refrigerant.
Lithium Bromide – Key Segment for Absorption Chillers
The global absorption chillers market can be segmented on the basis of absorber type into lithium bromide and ammonia. The lithium bromide segment is expected to account for a prominent share in the global absorption chillers market over the forecast period. Lithium bromide absorption chillers possess various features such as cost-effectiveness, environment-friendly, superior corrosion protection, rugged machine construction, low cooling water temperature operations, etc.
Ammonia-based absorption chillers are expected to create nearly 9% of the overall incremental opportunity during the forecast period.
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South Asia and East Asia to Assist Market Growth in the Near Future
The Middle East and Africa is expected to account for a prominent share in the sales of absorption chillers, owing to their utilization across the natural gas sector. Continuous growth in the food & beverages and chemicals sectors across countries, mainly India and China, are expected to drive the installation of absorption chillers, and, in turn, escalate the growth of the global absorption chillers market over the forecast years.
The market in South Asia is anticipated to witness 1.6X growth in terms of value over the coming years, in the global absorption chillers market.
Absorption Chillers Market – Competitive Landscape
Some of the market players included in the global absorption chillers market report are Robur Corporation, Trane Inc., Carrier Corporation, LG Electronics, Inc., Thermax Limited, Shuangliang Eco-Energy Systems Co. Ltd., Kawasaki Thermal Engineering Co., Ltd., Hyundai Climate Control Co. Ltd., Yazaki Corporation, World Energy, BROAD Group, EAW Energieanlagenbau GmbH, Colibri bv, and Johnson Controls-Hitachi Air Conditioning.
Globally, the absorption chillers market is fragmented, with the top 3 players holding nearly 1/5 of the global market share.
New product launches and expansion of production facilities are found to be some of the key developments in the global absorption chillers market across the globe.
- In January 2019, Thermax Limited announced the introduction of its new production facility in Andhra Pradesh, India. This plant was set up with an investment of around US$ 24 Mn in phase one, with a capacity to produce nearly 400 absorption chillers a year.
- In the recent past, Thermax Limited introduced triple effect absorption chillers that have a coefficient of performance (COP) of 1.8, which is nearly 30% higher as compared to that of double effect absorption chillers.