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Jensen Predictive Maintenance (JPM System) of district heating pipes

Periodic Reporting for period 1 - JPM (Jensen Predictive Maintenance (JPM System) of district heating pipes)

Reporting period: 2015-10-01 to 2016-02-29

Summary

District Heating (DH) is expected to grow fast in Europe and in the world. EU Strategy for Heating and Cooling is identifying DH as a technology to quickly reduce CO2-emissions, dependency of imported fossil fuels and to create more local jobs.
DH is used in more than 70 countries worldwide. Most countries in Europe has DH, with highest market share in Northern and Eastern Europe. All urban areas in Sweden and Denmark are connected to DH and the total market share in heating is higher than 60 %.
The challenge for DH is to overcome high capital expenditure, in other words improve the Return On Capital Employed (ROCE) - increase Revenues, Reduce operating costs and limit capital. The DH operators must be able to expand, build new networks, connect buildings that leave oil & gas. At the same time the operators must take care of existing assets – literally “buried assets”, thousands of kilometres of pipes, 30-70 years old.
Jensen Predictive Maintenance (JPM) is utilizing a window of opportunity; new technical enablers and new customer needs. Digitalization, new sensors, IoT, smart battery-free power supply and methods for big-data-analytics are enablers to develop JPM.
New customer needs are ensuring demand for JPM;
1. Need to better avoid large failures at pressurized DH-pipes.
2. Need to reduce cost from energy losses from smaller leakages.
3. Need to limit and defer replacement investments, use the pipes to end-of-life.
4. Need to optimize heat production and pumping work by using new sensor data.
JPM is based on advanced acoustic signal analysis, similar to technology to hunt foreign submarines in the Baltic Sea. Most of the analysis methods are proven in field.
JPM will open up a multi-million Euro market, in Europe then worldwide, with new local jobs. The customers will save energy and maximize utilization of their assets. If all DH operators in 27 countries would apply JPM on pipes older than from year 2000, the annual saving potential is 3 billion Euro per year and the postponed investments are worth 2 billion Euro per year. Each DH operator would then invest 1-4 million Euro in JPM and then buy annual services for 0,1-0,5 million Euro. Roughly 2 000 operators represent more than 80 % of the market.
AJAB is a small company with experience of large R&D-projects and spin-outs. We have strong strategic partners and close customer collaboration in order to ensure success. No competitor up-front yet.
1. Early stage development of prototypes after deep dialogue with key reference customer. The purpose of the prototypes is to verify that it is possible to execute a development project.
2. Three levels of customer and market analysis;
a) Strategic level, trends and priorities at company level or national industry level. For instance, we have detected a growing concern on how to maintain assets, to reduce costs and to limit capital employed.
b) Interviews with 25 customers from different countries.
c) Deep collaboration with one customer and two more customers in the pipeline. This group of customer will decide Product/System configuration.
3. Review of strategic plan, including how to organize the company and its partners for a big growth step.
4. Competitor analysis.
5. IPR analysis.
It is confirmed that Jensen Predictive Maintenance (JPM) takes Asset Management of District Heating (DH) system to a new level. DH operators will get a fundamentally improved control over their buried assets, thousand kilometres of pipes. Energy losses will be reduced and replacement investments will be done “just-in-time-and-spot”. The full life-time of every section of a pipe will be maximized. Billions of euro in costs can be saved and/or deferred/postponed. Especially poor cities with low-income-housings will be able to provide low carbon heating and avoid fuel poverty. The pay-back time for a DH operators investing in JPM will be less than a year. The JPM is truly an Internet-of-Things product, utilizing digitalizing and big-data-analysis in reality (not only a vision).
JPM itself will create jobs for hundreds of people in Europe. Indirect competitors who lose jobs are natural gas and oil suppliers in Russia or the Middle East and steel pipe manufacturers.
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