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Disruptive design innovation for safe and lower cost implementation of the alternative to the ozone-depleting gases in the heat pump heating and cooling systems

Periodic Reporting for period 1 - PropSafe (Disruptive design innovation for safe and lower cost implementation of the alternative to the ozone-depleting gases in the heat pump heating and cooling systems)

Reporting period: 2017-06-01 to 2017-11-30

In response to international agreement (The Kigali Amendment, 2016.), the production and consumption of HFCs will be gradually phased-out. Rich countries, such as the US, Japan and EU, will start phasing out synthetic HFCs in 2019, China in 2024, and India and less ambitious countries in 2028. The main challenge for heat pump producers is to find refrigerant which will be the best replacement for the HCFs.

Propane (R290) is one of the best solutions for small heat pumps. Propane is designated an A3 safety classification – non toxic (A) high flammable refrigerant (3). Because of its flammability, currently existing R290-based systems require high-cost spark-proof electrical components and great care in the manufacture, installation and servicing. Only experienced refrigeration technicians, who have undertaken appropriately certified training, are permitted to service and maintain such propane-based heat-pumps.

Alfa Klima's "PropSafe" is highly effective innovative ecofriendly R290-based heat-pump system, completely safe for household or industrial use. Its design does not require high-cost spark-proof components or special type of compressors. In addition to being safer than current systems, such design has up to 30% lower cost of production.

Overall objective of the project was to determine if there is a sufficient user need in targeted markets to scale-up current bespoke production to a standardized serial production.
Following a 6 month assessment it has been concluded that an investment in scale-up production is feasible, with high earning potential. Annualized ROI is estimated between 31% and 51% depending on the scenario.
During the project a desk market study was performed of the heat-pump market in Europe. based on those results markets of the Western Balkans (home market), Romania and Poland were selected for in-depth study.

Coaching provided through SME Instruments was utilized to design most appropriate market survey tools and identify methods for researching distributors in the targeted markets.

Alfa Klima participated in five international heat-pump fairs/congresses in the targeted markets which was the key activity in identifying competition and collecting data on their state-of-the-art R290 products as well as determining the appropriate pricing structure.

A privately owned market-entry and M&A consulting firm from Romania was engaged to conduct a survey among heat-pump distributors in the target markets and arrange one-to-one meetings.

Two on-line surveys were conducted to gauge the awareness of consumers of the need to switch from HFC to R290 and the safety issues involved.

Patent application has been prepared.

The conclusions of these activities were: 1. there is a sufficient and growing market for the PropSafe product, but substantial effort in consumer education has to be invested; 2. the most appropriate power rating of the heat-pump to be produced has been determined and the costing of production has been performed; 3. complete investment plan has been defined including needed plant, property, and equipment, as well as labor requirements and costs.

The main conclusion is that Alfa Klima will go ahead with the scale-up of current bespoke production in the new facility for serial production of R290-based heat-pump systems.
The project served to conclude that PropSafe design is beyond current state-of-the-art design in R290 heat-pumps.

It is expected that Alfa Klima will capture 1% of the R290 market in Europe by the project end, double turnover and increase employment by 100%. Impact on the carbon footprint of heat-pump systems in Europe will initially be small, but if any of the larger manufacturers decide to license PropSafe design, in the long term it can become significant.
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