The largest regional markets for cooling towers are Europe and the United States. However, the Asia-Pacific region is expected to grow the fastest at a CAGR of 4.8 per cent, with growth in the region driven by steady economic development, from emerging markets like China, India and Korea.
According to latest reports, the global market for cooling towers is expected to reach $2.7 billion by 2020. This growth is expected to be driven by growth in the HVAC (heating, ventilating, and air conditioning) segment. Analysts estimate that steady rise in HVAC deployments (primarily driven by the boom in commercial construction projects) has ensured that there will be continuing demand foe efficient cooling technologies.
´Growing focus on enhancing energy efficiency and reducing environmental pollution by restricting CO2 emissions in these industries (thermal & nuclear power plants; oil refineries; chemical/petrochemical plants; and food & beverage, dairy, and paper & pulp processing facilities) is especially benefiting cooling tower installations,´ says the latest report from research firm Global Industry Analysts (GIA). ´Cooling towers are also extensively used as a part of building HVAC systems, particularly in commercial constructions where they play a major role in disposing excess heat from chillers. Steady rise in commercial/infrastructure construction projects across the globe and subsequent rise in HVAC deployments will boost market prospects for cooling towers in the coming years,´ says the report.
In India, the dark clouds that were hovering over the nation´s economic horizon have just about started to clear, but the past few years have taken their toll on the growth of the domestic market for cooling towers. Says S Bansal, Director, Paltech Cooling Towers & Equipments, ´In the recent past, coal shortages, scams, hike in prices of imported coal, lack of land availability, policy logjam, shortage of labour together paralysed the prospects of the power sector and other heavy industries. In fact all the industrial sectors were having virtually no growth.´ Naturally, this slowdown had depressed demand for cooling tower solutions. But there is immense market potential for growth.
´A cooling tower is a utility equipment in most of the MSME industries and a major and critical equipment for power plans, steel, oil & gas, fertilisers and other heavy industries. Therefore we can say that the opportunity for cooling tower systems in India is huge. However, as on today, the supply situation is better than demand because very few projects are under execution stage,´ says Bansal, sounding a note of caution. India continues to depend on coal for its power plants, and these installations also need large quantities of water for cooling towers. Neighbouring China plans to set up 16 mega coal-based plans by 2015, and the water requirements (including cooling tower supply) is expected to work out to an annual consumption of 10 billion cubic metres of water annually. ´One of the key sectors affecting growth has been undoubtedly the power sector. Cooling towers are extensively used in power projects with NTPC projects comprising a bulk of our business. However the sluggish growth has indeed impacted our business since turnover has declined considerably,´ avers Ravishankar Modi, Managing Director, Bygging India Limited.
In the Indian context, apart from the power segment, the key sectors for cooling towers are steel and refineries, since the manufacturing processes in these industries generate a tremendous amount of heat. India is transitioning into the next phase of its growth cycle.
With the key initiatives (like the ´Make in India´ campaign) being promoted by the government, manufacturing will likely play a leading role in this growth trajectory. While the country leads the world ranking as a shared services destination, it is rapidly emerging as a manufacturing location for many foreign corporations. This trend is bound to give a boost to the cooling towers segment. ´Growth in industrial/processing activity, as evident by the steady rise in manufacturing PMI, also augurs well for market growth. Continued strengthening of production/processing activity in emerging markets is expected to infuse hope for an even faster growth ahead in the industrial sector, which is expected to shore up demand for cooling towers. Increased investments in plant capacity expansions and upgrades will create strong demand for the deployment of cooling towers, says the GIA report.
In addition, it is expected that more stringent environmental regulations shall further impel growth in this sector. Government regulations mandating use of closed-loop systems for cooling will therefore drive demand for cooling towers in a range of industry segments. For example, the US Environmental Protection Agency (EPA) wants existing once-through cooling systems at industrial and power plants to be replaced with closed-loop cooling systems. Growing focus on greener buildings is also helping drive replacement of aging cooling equipment with new, more energy efficient models.
´Opening of the economy has helped infuse private participation into power projects and effectively helped to multiply the growth of the power sector and thereby the cooling towers industry´, says Suresh Sarma, COO, Gactel Turnkey Projects Ltd. Speaking at the 6th Annual Middle East District Cooling Summit, Ranjith Paul, Managing Director of Fleming Gulf, said: ´Installation and implementation of efficient and environment-friendly cooling systems are necessary for the region to achieve its sustainable growth aspirations.´
In a country like India where the climate remains warm for most part of the year, the main challenge faced by power plants is to keep constant the cold water temperature from cooling towers to maintain the efficiency of a plant at the desired level. Especially during the monsoon where the humidity is high, the effective functioning of a cooling tower ensures that fuel consumption is not above normal and the plant meets all its efficiency parameters. Initially cooling towers were manufactured from wood, but owing to environmental concerns, towers are now made from fibreglass reinforced plastic (FRP) as well as roller compacted concrete (RCC). However, even RCC may be on the way out as new technologies take root in this sector. ´The latest technology breakthrough in cooling towers is introduction of Pultruded FRP Structure replacing RCC structures. The use of the former has resulted in cost-effectiveness and time-saving in total project schedule,´ says Bansal. These structures are corrosion resistant, have a high strength-to-weight ratio, long service life and are fire retardant, easy to fabricate and easy to install.
Growth in the Indian market is hence driven by energy efficiency, replacement demand, rising number of greenfield projects and capacity expansion of existing projects. The emphasis on energy savings will drive the growth of the cooling tower industry. There are a number of pitfalls, though. As Bansal adds, ´The various issues faced by the industry are low margins due to which they are unable to produce good quality products. They (industry players) are also unable to do any innovation in any components of the cooling tower. The shortage of skilled labour, (coupled with) steel and cement occasionally during the construction and high interest rates are a few challenges being faced by the industry.ö In addition, regular maintenance is key to ensuring optimum functioning of cooling towers. Studies indicate that up to 15 per cent of electricity can be saved by proper maintenance, along with conserving water and prolonging life of cooling equipment. Several other factors can contribute to cooling tower efficiency, including proper sizing of the tower (most cooling towers are undersized to save money), the age of the tower (older towers often degrade over time), using more effective fill materials, using variable frequency drive fan motors and replacing old spray nozzles. The facilitation of technological collaboration between Indian players and their foreign counterparts has made this field smarter by adding several novel innovations. However, many Indian players still depend on foreign technology for thermal & structural design of cooling towers and fan design. It remains to be seen if the industry manages to tie up with premier Indian research and academic institutions for better domestic designs.
´Paltech has planned a few strategies like backward integration of a few components of cooling towers so that better costing, better quality and timely delivery can be assured keeping us a step ahead of others. A sufficient inventory and quick response time for a client´s requirement of spares and services is also our USP,´ says Bansal.
There is still tremendous potential for growth in the cooling towers segment. All eyes are now on the new dispensation at the Centre to deliver conducive polices to foster the growth of this segment. Over the short term, repairs and innovations are likely to drive growth. Going forward, the focus is likely to shift towards usage of better construction materials, improve energy consumption of fans, reduce noise levels, and increasing use of natural cleaning systems to restrain bacterial growth. Adoption of dry cooling towers and air-cooled solutions may also be necessary in the future due to the rapid growth of industry and increasing pressure on water resources. ´Growth of the industry is fully dependent on how fast the Central government introduces reforms. Paltech is quite optimistic that in the next couple of years we will be doing very good business as the industrial growth should be above 10 per cent,´ concludes Gupta.
Cooling Tower Types
Cooling towers fall into two main categories: Natural draft and Mechanical draft. Natural draft towers use very large concrete chimneys to introduce air through the media. Due to the large size of these towers, they are generally used for water flow rates above 45,000m3/hr. These types of towers are used only by utility power stations. Mechanical draft towers utilise large fans to force or suck air through circulated water. The water falls downward over fill surfaces, which help increase the contact time between the water and the air - this helps maximise heat transfer between the two. Cooling rates of Mechanical draft towers depend upon their fan diameter and speed of operation. Mechanical draft cooling towers are much more widely used.