ABSORPTION CHILLERS MARKET ANALYSIS

Market Overview

An absorption refrigerator or chiller is a thermally-driven chiller that uses liquid refrigerant or sorbent solution and a heat source to provide cooling to buildings. These chillers use relatively less energy as compared to traditional chillers such as electrical chillers and cool buildings and industrial equipment without using ozone-depleting chlorofluorocarbons (CFCs). Moreover, absorption chillers use heat energy with limited mechanical energy for pumping and can be powered by steam, hot water, natural gas, and waste water. There are two types of commercial absorption chillers used namely single-stage and double-stage systems. In single-stage system, a single condenser and generator are employed. However, thermal efficiency of single-stage chiller is low thus it hinders their cost competitiveness as compared to conventional electric chillers. Furthermore, double-stage system consists of two condensers and two generators, in order to allow more refrigerants to boil-off from the absorbent solution.

The global absorption chillers market is estimated to account for US$ 1,416.9 Mn in terms of value and 13,560 Units in terms of volume by the end of 2019.

Market Dynamics- Drivers

1. Growing adoption of solar-powered absorption chillers in different end-use industries is expected to drive growth of the global absorption chillers market during the forecast period

Non-electricity driven equipment have witnessed high demand from various end-use industries in the recent past, wherein primary source could be utilized more efficiently. Therefore, absorption chillers powered by solar energy have gained significant traction in the market for large chilling operations. These chillers provide maximum cooling performance while reducing electrical power consumption thereby minimizing ever increasing need for electricity in summer. This, in turn, is expected to drive the market growth in the near future. For instance, for the World Cup 2022 which is scheduled to be held in Qatar, a CLFR solar collector field has been developed to power a 1MW absorption chiller to provide air-conditioning for a 500-seat showcase football stadium at Doha, Qatar.

2. Increasing deployment of engines and turbines is expected to propel the global absorption chillers market growth over the forecast period

Air conditioning unit is required to ensure efficient performance in turbines and engines in operations. Favorable temperature for efficient performance of turbines is around 150⁰C. However, maintaining this temperature becomes challenging, especially in Asia Pacific and Middle East where average temperature is higher than 250⁰C. Therefore, absorption chillers are extensively used to prevent the waste of heat from turbines, which can be further effectively used power absorption chiller at a negligible fuel costs. Thus, increasing number of turbines integrated with efficient heat rate requirement is expected to boost the market growth in the near future. 

Asia Pacific region dominated the global absorption chillers market in 2018, accounting for 32.4% share in terms of value, followed by MEA, Europe, North America, and Latin America, respectively.

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Source: Coherent Market Insights

Market Dynamics- Restraints

1. High capital investment for installation along with high operational cost is expected to restrain the global absorption chillers market growth during the forecast period

When compared to conventional electric and mechanical chillers, absorption chillers require high installation costs, which results in long payback period. Operational cost for absorption chillers is also higher than conventional chillers, thereby restraining the market growth in the near future. Furthermore, local equipment suppliers and facility workers are sufficiently trained for maintenance of absorption chillers, which makes end users sign a contract with chiller manufacturers, in order to ensure efficiency of the equipment. According to Coherent Market Insights’ analysis, absorption chiller installation requires around US$ 830/ kWc with additional US$ 58/kWc per year for operation and maintenance. Such high operational and maintenance cost is expected to hinder the adoption of absorption chillers and thereby hamper the market growth in the near future.

2. Lack of skilled professionals for maintenance works is expected to hinder growth of the global absorption chillers market over the forecast period

Absorption chillers require skilled and expert professionals for maintenance. Such high maintenance is not possible from local vendors and distributors. Moreover, key players do not provide consulting for the maintenance works and concentrate only on promotion of other substitute equipment. This, in turn, is expected to restrain the global absorption chillers market growth over the forecast period up to certain extent.

Market Opportunities

1. Offering consulting and for operation and product maintenance

Absorption chillers, unlike conventional chillers, require high maintenance. For instance, in lithium bromide-based absorption chillers, prevention of crystallization of refrigerant for efficient working is essential. Very few players around the world can offer this service, which in turn, creates significant business opportunity for market players to expand their presence and gain confidence of consumers. For instance, Trane provides extensive aftermarket support wherein service personnel ensure that designated unit operators thoroughly understand absorption system operation and unit capabilities and limitations.

2. Rising waste of heat and high operational cost of ships is expected to pose lucrative growth opportunity

Operating large ships leads to wastage of large amounts of heat, which in turn, increases operational cost of ships and negatively affects the environment with emission of CO2. However, the waste heat can be to power an absorption chiller, which further can be used to cool the vessels. According to Coherent Market Insights’ analysis, in 2014, there were around 50,000 ships operating in the ocean, which is expected to increase at a rate of 3% annually. Therefore, research and development in absorption chillers used in maritime application are expected to pose significant growth opportunities for market players in the near future.

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Source: Coherent Market Insights

Global double stage based absorption chillers market was valued at US$ 1,108.0 Mn market in 2018 and is forecasted to reach a value of US$ 2,013.1 Mn by 2027 at a CAGR of 6.9% between 2019 and 2027.

Market Trends

1. Offering low coefficient of power (COP) for absorption chillers is a major trend in the market

Coefficient of power for absorption chillers should be as low as possible, in order to attain efficient operations. Offering low COP can be the major USP for manufacturers in the highly competitive market. Many companies in the market offer absorption chillers with low COP, which is expected to continue during the forecast period. For instance, in April 2013, Kawasaki Thermal Engineering Co., Ltd. developed double-effect absorption chiller with COP of around 1.51, which is the highest rated COP for double-effect chillers.

2. Absorption chillers with remote monitoring facilities via multiple interface is another major trend in the market

Remote monitoring of equipment offer flexibility, efficiency, and increases visibility of operations across different geographies and management hierarchies. Moreover, development in wireless networking and technology has enabled manufacturers to offer compatible features that offer remote monitoring capabilities for absorption chillers, which is expected to continue over the forecast period. For instance, Programmable Logic Control (PLC) absorption chillers are trending. These enable end users to view the performance of absorption chillers on wireless devices such as smart phones and laptops, thereby reducing demand for operational engineers, in order to ensure its efficient working.

Segment information:

In Global Absorption Chillers market, by application segment, the industrial sub-segment dominated the global market in 2018, accounting for 88.7% share in terms of value, followed by non-industrial, respectively.

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Source: Coherent Market Insights

Value Chain Analysis

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Source: Coherent Market Insights

Competitive Section

Key players operating in the global absorption chillers market are Broad Air Conditioning Co. Ltd., Thermax Inc., Carrier Corporation, Shuangliang Eco-Energy Systems Co. Ltd., Kawasaki Thermal Engineering Co., Ltd., Hyundai Climate Control Co., Ltd., Johnson Controls, Inc., Robur Corporation, Yazaki Corporation, EAW Energieanlagenbau GmbH, and Trane Inc.

Key Developments

1. Key players in the market are focused on product development, in order to enhance their product portfolio. For instance, in January 2019, Broad Air Conditioning Co. Ltd. developed a triple-effect absorption chiller that can produce chilled water down to 5⁰
2. Major companies in the market are focused on capacity expansion, in order to enhance their market presence. For instance, in January 2019, Thermax Inc. inaugurated a new manufacturing unit in Sri City in Andhra Pradesh, India to produce vapor absorption products as chillers, heaters, and heat pumps for domestic and export markets.