HVAC Equipment-as-a-Service: a step ahead in sustainability
06 February 2020
Guido De Sanctis, services business leader HVAC Europe at Trane discusses the rise of servitisation for HVAC equipment and lays out the benefits for businesses and the environment
The acronyms related to “XaaS” – Everything as a Service – started to be popular only in recent years with all type of variants, starting from the most affirmed SaaS – Software as a Service. Most of us still remember when we purchased a CD with a given software version inside, while today everything is in the cloud and accessible for a service fee. It's the same for music – from buying CDs to “Music-as-a-Service” offered by many streaming services.
On the equipment side we are observing the same trend of “servitisation”: EaaS or Equipment-as-a-Service. We see it a lot for construction equipment, as well as for cooling and heating machines such as chillers, heat pumps, boilers. Most rental companies, especially those in the HVAC domain saw the first business opportunities coming from crisis-response needs, following a breakdown of the (owned) equipment at customer side. This is still there, but there are additional benefits that a rental solution can bring in the HVAC domain when we shift focus from owning a piece of equipment to receiving a service out of it.
Let’s put aside the financial advantages coming from a rental “operating expense” approach compared to the traditional “capital expenditure” associated with purchasing equipment: that’s a well-known story. Let’s focus on something different, on how Rental Services can be a way forward in terms of sustainability, for the good of our planet.
When we make a Life-Cycle-Assessment of an HVAC equipment, there are three main factors we can take into account:
- The energy and resources required to build the equipment;
- The energy required to operate the equipment and fulfil application needs;
- The end-of-life of the equipment.
Let’s start with the first point, considering the typical situation of a commercial building in Europe or in any other place with a temperate climate. The building requires cooling or heating, heavily depending on the season (outdoor temperature driven). The usual approach would be to buy a chiller to satisfy the cooling needs. Most of the time, those chillers are put out of service as the summer season comes to an end, by performing some service tasks also known as “winterization” in order to prevent freezing of the water circuit exposed to the cold winter weather. After winterization, the chiller seats unused for months, in a kind of lethargy, waiting for the summer season to come.
At the same time, think about an application such as a temporary ice rink, more and more popular means to attract families to visit Christmas markets, shopping centers, etc. All those installations require cooling during winter, fulfilled by a chiller, very similar (if not the same) to the one described above. Here as well the traditional approach would be to buy that chiller, with very little chances, if none, to make use of it out of the ice-rink season.
It’s very easy to rethink the whole thing starting from the concept of “sharing economy”. In the baseline we have two chillers to be built with a combined utilisation rate below 50%. What if those two HVAC users would share the same equipment? A single chiller would be enough to cover both needs. In practice a peer-to-peer sharing might be very impractical to put in place, so this is where a Rental company plays a key role: the chiller is owned by the Rental company and shared between two or more customers, achieving utilisation rates well above 80% in a case like the one described above. This is cutting by half the CO2 footprint of these two businesses, as only half of natural resources and energy would be required to build the single chiller capable of satisfying both needs. There are many other cases and applications like the two given as a simple but real example.
Moving to the energy consumption while in use, we can consider a different case which emphasises this specific aspect of HVAC operations. So let’s consider a process cooling application (e.g. plastic industry) where cooling is needed all year long, with a utilization rate close to 100%. In such cases, the carbon footprint is mainly driven by the direct energy consumption and the high utilisation rate is not suggesting any advantage from sharing the equipment with other users. Nevertheless, a rental solution can offer a great advantage also in this case: by allowing a faster renewal cycle, we can operate equipment always on the leading edge of technology and efficiency. A rental chiller can indeed be swapped at any moment with the newest model, eliminating any efficiency gap a given piece of equipment would be developing year over year compared to the state-of-art products – which are coming out at a very fast pace in those days. The baseline in this case would be a chiller purchased to be operated for at least 10 to 20 years. In recent years we saw new chiller models coming every 2 to 3 years with 10 to 30% better efficiency than their predecessors, just to give an idea of the efficiency gap that can be cumulated over a lifetime. Operating an inefficient equipment would be a considerable waste of energy.
And what about the older model we are going to replace in this energy intensive job, in favor of a more efficient one? No problem, as there are still plenty of rental application where chiller efficiency is not that critical: let’s just go back to where we started, the emergency cases. In such events, the main purpose is to restore cooling supply and an older chiller model is just fine, when properly maintained.
In conclusion, there are plenty of real life HVAC applications where a rental solution can help to reduce carbon footprint or energy intensity, either by sharing equipment or by running always on the leading edge of technology. In any case, the flexibility of the EaaS business model is the base ingredient to rethink our approach to HVAC and make a big step into a more sustainable cooling or heating.