Australia's HVACR industry is getting stronger every year with $38 billion spent on purchasing, installing, maintaining and operating RAC equipment and services in 2016.

That spend was equivalent to 2.3% of national GDP in 2016, according to the latest Cold Hard Facts 3 (CHF3) report.

It found nearly $8.1 billion was spent purchasing and installing new equipment in 2016, and a further $161 million is estimated to have been spent on the refrigerants that make up the refrigerant ‘charge’ found in every piece of RAC equipment that uses the vapour compression refrigeration cycle.

It is also a significant increase compared to spending in 2012 which was $26.2 billion. The comprehensive report, which is produced by the Expert Group, has been formally released by the Department of Environment and Energy.

Highlights from the report were published exclusively in CCN earlier this year following a presentation by report co-author, Michael McCann, at ARBS 2018.

Using data largely from primary sources on the supply of goods and services in the industry in 2016, Cold Hard Facts 3 (CHF3) has been able to make comparisons with two previous studies published in 2007 (CHF1) and in 2013 (CHF2).

Every aspect of HVACR has shown strong growth between 2012 and 2016 with the report confirming that in 2016 the industry employed around 300,000 people in more than 20,000 businesses. Those employees earned approximately $24 billion in wages and salaries in 2016, the report said.

There are more than 54 million individual pieces of RAC equipment operating in Australia that consumed more than an estimated 61,000 GWh of electricity in 2016, slightly more than 23.6% of the 258,000 GWh of electricity production in Australia that year.

Owners of RAC equipment spent an estimated $14 billion to pay for that electricity and the liquid fuels required to run mobile AC and mobile refrigeration systems, the report said.

This vast stock of equipment, from small portable refrigerators and air conditioners to enormous commercial chillers and refrigeration plants, employ a bank of more than 50,000 tonnes of synthetic refrigerants that have high global warming potential (GWP) values.

The bank of refrigerant has an estimated current replacement value of around $2.7 billion.

CHF3 calculates that RAC technology was responsible for total greenhouse gas emissions equivalent to approximately 68.7 million tonnes CO2e in 2016 (including HCFCs), equivalent to 12.4% of all greenhouse gas emissions reported in Australia’s National Greenhouse Gas Inventory for 2016.

The report said all indicators point to continued strong growth for refrigeration and air conditioning services in the years ahead driven by a strong economy, population growth, reduced costs to equipment and high summer temperatures – the same mix of factors that saw the refrigerant bank grow by more than 50% over the last decade.

The cold hard truth is that the refrigerated cold food chain (RCFC) is an essential service with perishable food production in 2016 worth an estimated $38 billion.

Approximately $18.8 billion was earned from export of perishable foods in 2016.

The refrigerated cold food chain has more than 1.6 million installations and pieces of equipment that used an estimated 35% (1,250 tonnes) of all HCFCs and HFCs used in 2016 to charge new equipment and replace leaked refrigerant.

This is a 19% increase on the 614 tonnes reported in 2012.

The refrigerant bank grew by 17 per cent from 2012 to 2016. The big three were 410a, 404a and 134a, followed by R22, which has now dropped below 10,000 tonnes.

This will continue to fall as existing equipment reaches end of life and no more enters the bank. The total refrigerant bank in Australia in 2016 is estimated at approximately 51,000 tonnes of HCFCs and HFCs (CHF2, 43,500 tonnes).

This is an increase of nearly 15% as compared to the bank in 2012, and greater than a 50% increase over the decade from 2006 to 2016.

CHF3 said the bank of natural refrigerants grew by 14 per cent, with CO2 and hydrocarbons the big contributors to that rise.

Every year an estimated 2 million devices containing more than 1,990 tonnes of refrigerant reach the end of their useful life, including 110 tonnes in domestic refrigerators and freezers, 1,240 tonnes in air conditioners, 420 tonnes in motor vehicles of all types, and 220 tonnes in commercial refrigeration equipment, the report said.

In a first phase of small and medium AC driven growth in the 6 years between 2006 and 2012 the bank expanded by more than 45%, from an estimated 30,169 tonnes in 2006 to a total bank of 43,500 tonnes in 2012.

At least 40% of the total growth in the bank in those 6 years was contributed by refrigerants in small and medium AC.

Subsequently in the years from 2013 to 2016 the bank has continued to grow strongly, increasing by more than 17% to approximately 52,000 tonnes, led by the small AC stock of equipment.

Refrigerant in small and medium AC is estimated to have made up more than 37% of the growth in that period.

New chillers

There are estimated to be 22,600 chillers operating in Australia in 2016, containing in total approximately 4,200 tonnes of refrigerant.

New chillers sales are expected grow at around 1% per annum or in line with construction activity in large commercial buildings. The HFO refrigerant of choice for large centrifugal chillers is HFO-1233zd.

Split Systems

Single split systems sales including wall hung, cassette, consoles and ducted systems have grown rapidly from 2012 to 2017 with annual sales reported of 833,000 in 2012; 887,000 in 2013; 934,000 in 2014; 1,000,000 in 2015; and 1,177,000 in 2016.

This strong sales growth continued into 2017 when a record number of 1,356,000 single split systems were sold.

The split system market has experienced solid compound annual growth rates (CAGR) of around 5.5% from 2012 to 2016 with a significant increase in sales of HFC-32 charged systems of more than 30% in 2017 compared to 2016.

By the end of 2016 there had been 964,000 air conditioning units containing HFC-32 imported, mostly split systems, containing a total of 1,039 tonnes of the refrigerant. The count of HFC-32 charged systems exceeded one million pieces part way through the first quarter of 2017.

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