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Tag : refrigerants

Home/Posts Tagged "refrigerants" (Page 2)

Centralize Refrigeration Management

by kwrmson 1 May 2015in Blog

First published in Frozen & Refrigerated Buyer Magazine May 2015

Store level programs can hide huge dollar losses from refrigeration leaks.

People often ask me to name the single most effective way to cut supermarket refrigeration leaks, based on my time heading up the EPA’s GreenChill Partnership.

My response usually surprises them: Your first priority should be to switch from an individual-store-based refrigerant management strategy to one that is centralized at headquar­ters. This switch produced a 10% re­duction in corporatewide leaks in one GreenChill partner’s first few months in the Partnership. This partner had more than a thousand stores and this 10% reduction equaled at least 150,000 pounds of refrigerant. Mul­tiply that by about $5.00 a pound way back then, and you get a cool $750,000 cost saving off the bottom line.

What do I mean when I recom­mend shifting to headquarters refrig­erant management? Well, refrigerant management has historically been the responsibility of the individual store. In fact, Section 608 refrigerant regulations place the responsibility for record keeping and repair of leaks at the individual store level. That is the single biggest flaw in Section 608 and the reason it has largely been a failure in reducing and preventing harmful refrigerant leaks.

Headquarters management shifts the responsibility for refrigerant tracking, management, and strat­egy to a central person who has the responsibility for all stores. Just to be clear: this does not do away with individual store responsibility under Section 608. I would never encour­age anyone to flout the law, even one that has as its only accomplishment the killing of trees in the name of superior record-keeping.

If headquarters begins managing refrigerants centrally, there has to be a system in place for individual stores to produce all records required under Section 608, should an EPA inspector ask for them. Cen­trally managing all required informa­tion on leaks greatly increases the likeli­hood that a store will be able to produce those records. If left to their own devices, individual stores rarely produce adequate leak repair records. The most likely re­sponse from a store manager when asked for refrigerant records by an EPA inspector is something like “I don’t have anything to do with that stuff.”

So how did a shift to headquarters management lead to such a huge reduction in leaks in such a short period of time in the exam­ple cited above? First of all, calculating a corporatewide leak rate for the first time usually opens the eyes of the top brass to the enor­mous amount of money a company wastes on replace­ment refrigerant. And that’s the key: the realization that the best financial path is to solve this corporatewide problem.

An individual store manager looks at refrigerant leaks as a cost of doing business. He or she is often unaware that something can be done about the problem, or if aware, doesn’t have the time to become a refrigeration expert to figure out how to solve it. The store manager’s job is to sell groceries. A person at headquarters who has been hired to tackle this problem would have the knowledge and the time that individual store managers lack.

Centralized refrigerant manage­ment leads to quick wins by focus­ing attention on the horrendous leak rates at some stores. From the perspective of the individual stores, these leak rates are probably consid­ered normal. But a per­son who has the records for all stores sees that a small number of outliers make up a large percent­age of the leaks. He or she can target those stores as the first priority. Sometimes sending out contractors to investigate the problem leads to the simple solution: finding and repairing the leaks instead of just topping off the refrigerant every month. If the problems are more complex, headquarters can allocate funds to tackle them in other ways, includ­ing investing in a new system if that saves money in the long-term.

$30,000 FINES PER DAY Centralized refrigeration manage­ment often alerts corporate officials to the potential legal liability from non-compliance with refrigerant regulations. At $30,000 per viola­tion, per day, fines can be much more expensive than investing in better refrigerant management.

There are other examples of the benefits in switching to centralized refrigeration management, but they all boil down to the same premise: better companywide refrigeration management results in better com­panywide financial management. The environmental benefits are a pleasant side effect.

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Time to Overhaul 608

by kwrmson 1 April 2015in Blog

First published in Frozen & Refrigerated Buyer Magazine April 2015

Special interests want to expand Section 608 refrigerant leak regula­tions. But what it needs is a major overhaul.

The Alliance for Responsible Atmospheric Policy, a Washington, D.C., special interest group, petitioned the EPA last year to expand Section 608 refrigerant leak repair regulations to include HFC refrigerants. The EPA’s Section 608 regulations currently apply only to ozone-depleting refrig­erants, and since HFC refrigerants do not harm the ozone layer, they do not now fall under its scope.

INEFFECTIVE REGULATION

The petition from the Alliance has many in the supermarket industry shaking their heads. Expanding Section 608 to include HFCs just takes an ineffective regulation and adds more stuff to it. The regulation already contains everything and the kitchen sink, including several provisions that most agree are pretty useless.

In addition, the petition does noth­ing to solve the real problem that Ti­tle VI of the Clean Air Act is meant to address: our nation’s enormous refrigerant leak problem. The current Section 608 does not mandate that a supermarket leak less — it simply says that once a supermarket leaks 35% of its refrigerant charge, records must be kept to show that leaks are repaired within 30 days of discov­ery. In fact, it’s perfectly legal for a supermarket to double its leak rate every year. You can leak 10,000 pounds of refrigerant every year and still be fully in compliance.

Many in the su­permarket industry are pretty clear on the actions they should be taking to try to solve this problem. At the risk of sounding like Captain Obvi­ous, the solution to supermarkets’ refrigerant leaks is leak prevention. Leak prevention is possible, afford­able, and readily available to every supermarket. Today.

The EPA in 2008 started a program to encourage supermarkets’ invest­ment in refrigeration technologies that prevent leaks: GreenChill’s Store Certification Program. The program gave platinum, gold, and silver awards to stores that achieved very significant refrigerant emissions reductions. After three years, the program had over-performed beyond anyone’s hopes. It wasn’t just reducing refriger­ant emissions; it was preventing them.

Every store that GreenChill had certi­fied as platinum had a 0% leak rate. Let me say that another way: these stores had never leaked a pound of refrigerant since they started operating. The companies behind these stores had completely changed the way they managed refrigeration, investing up front in technology that used very little refrigerant and then leaked nothing during years of operation. Some of the stores used only a few hundred pounds of refrigerant, com­pared to a typical store which uses about 3,500 pounds. One store even operated on less than 100 pounds.

Gold-certified stores averaged a leak rate of 0.5%. Silver-certified stores leaked just 3.8%, compared to a typical store in the United States that leaks 25% of its very large charge size.

While the Store Certification Program proved that certain refrigeration technol­ogy options are better at preventing harmful leaks, namely those that use modular chill­er units, CO2 cascade systems, and natural refrigerant technolo­gies like CO2 transcrit-ical systems, every type of technol­ogy in operation in the country was able to achieve some level of certifi­cation. Even centralized DX systems, which use thousands of pounds of refrigerant and are notoriously leaky, could be greatly improved if de­signed to the certification standards. At minimum, they reduced their charge by 50% and achieved very low leak rates, attaining silver and gold certification awards.

A GOOD QUESTION

So if solutions to the nation’s leak problem are possible, affordable, and readily available right now, why isn’t the Alliance petitioning the EPA to incorporate these solutions into their regulations? Could it be because a regulation that mandated large reductions in charge sizes and technologies that prevent leaks would result in Alliance members selling significantly less refrigerant every year? I’ll let you decide.

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The Great Divide

by kwrmson 31 January 2015in Blog

First published in Frozen & Refrigerated Buyer Magazine January 2015

Are you looking in the right places for unbiased opinions about your systems and refrigerants?

One of the first things I learned about refrigerants and supermarkets is that there is never one right answer, regardless of the question.

Doors on cases? It depends on lots of factors, including the case contents, the types of shoppers that frequent your store, how old the cases are, and, perhaps most im­portant, how much deference your management gives to your merchan­dising people.

Best type of refrigeration system? It depends in part on the layout of the store, the location of the store, the amount of money available, and, it seems, a lot of hearsay about the downfalls and dangers of the various types of systems that you yourself have never tried.

I could go on and on. You name an issue in commercial refrigera­tion, and I’ll tell you that the answer depends on X, Y, and Z.

TWO MAIN CAMPS

One of the most polarizing issues in our industry is the right strategy for approaching the environmental harm caused by refrigerant emis­sions. There are two main camps: those who believe that the answer to this problem is leak tightness and those who believe that the answer lies in environmentally friendlier refrigerants.

The leak tightness camp proclaims readily and willingly that the refrig­erant is not the problem. It doesn’t matter if a specific refrigerant harms the ozone layer or if it is the most potent global warming gas on the planet. If the refrigerant doesn’t leak, it doesn’t cause any harm. Therefore, we shouldn’t regulate refrigerant type; we should install commercial systems that never leak and make sure that service techs are trained in best practices.

The people who believe that the answer to the harm caused by refrig­erant emissions lies in using refriger­ants that are not harmful will tell you that there is no such thing as a leak-tight system. They point out that re­frigerant emissions are often outside of human control. Components fail without warning. Natural disasters result in catastrophic leaks. Copper theft can cause a store to lose its en­tire charge overnight. They also refer to human error. I myself am fond of mentioning the inattentive high school forklift driver who bangs into a display case. I have no idea whether high schoolers are even allowed to drive forklifts in supermarkets, but I keep using this example because I think it gets the point across.

So what’s the answer? I’d like to say “it depends.” But this is an issue where “it depends” doesn’t really work. It boils down to your funda­mental world view, similar to wheth­er you believe that guns kill people or that people kill people, or perhaps more aptly, whether the answer to our energy future lies in renewables or cleaner fossil fuels. Needless to say, though I’m saying it anyway, there is a lot of money at stake in all of these areas.

Not surprisingly, many chemi­cal manufacturers and the associa­tions that represent them belong to the camp that professes that the refrigerant is not the problem. As the EPA focuses more on low GWP refrigerants, this camp will become more vocal about the need to better communicate best practices for leak tightness and leak prevention, the need for more training, and better enforcement of Section 608 of the Clean Air Act. They don’t want to seem blind to the problem, so they’ll focus the blame for the environmen­tal harm somewhere other than on the refrigerant.

CHOOSING SIDES

Also not surprisingly, many envi­ronmental organizations belong to the camp that believes that refriger­ants will always leak, so the industry needs to move to refrigerants that do not harm the environment when emitted. This camp often makes broad, sweeping pronouncements about what everyone in the indus­try is doing wrong, without offering much in the way of concrete solu­tions to the hurdles that stand in the way of adopting environmentally-friendlier refrigerants.

Though I find systems manufac­turers to be more agnostic, their agnosticism mainly comes from their desire to sell to all end-users regard­less of their own opinions. Most of these manufacturers will, however, suggest that you try to reduce your HFC charge as much as possible and that you invest in a system that prevents HFC refrigerant leaks. They offer refrigeration systems that reduce the amount of HFC refrigerant needed by anywhere from 75%-90%. They also offer systems that use only natural refrigerants. Depending on how they posi­tion themselves in the market, they will focus more or less on these attributes as the key for your preparation for future regulations and market developments. However, if an end-user comes to these manufacturers wanting the leakiest type of system that uses the most 404A they can pump into it, most will also gladly sell that type of system. They might even take this end-user out to dinner and gladly agree that all this environmental nonsense is a load of hogwash.

If you get the impression that I feel this is an area where beliefs have a lot to do with money, you’d be ab­solutely right. Cynical? Maybe. I prefer the term bluntly realistic. The term “cynical” suggests that I feel there is something wrong with all parties in this industry try­ing to make a living. I don’t see anything at all wrong with that.

The problem in this situ­ation is when end-users, in trying to figure out what is best for their stores, gather information from people who are trying to sell them some­thing and never ask them­selves whether they are being presented with the whole picture. What baffles me is that these end-users are usu­ally the types of people who consult Consumer Reports or some other neutral source of information before purchas­ing a flat screen TV. They ask their friends who have flat screen TVs for their opin­ions on the pros and cons of various models. They under­stand that the flat screen TV salesperson may be trying to push one particular model or another based on the amount of commission he or she stands to earn. Yet when it comes to million-dollar decisions related to refrigerants and refrigeration systems, decision-makers rely on infor­mation from people who have a vested monetary interest in their decisions.

GREENCHILL: A GOOD SOURCE

The best source of neutral, user-friendly information that I know of is the EPA’s GreenChill Partnership. Lest you think that this organization escapes my cynical or bluntly realistic viewpoint, I readily admit that this neutrality is mostly due to the competitors that belong to the partnership keeping each other honest. The vari­ous best-practice guidelines, for instance, are written by groups of competitors. Any hint that a team member is trying to swing the document in his or her company’s favor is gleefully pointed out by multiple parties. Yes, there are situations where a whole group of competitors have the same economic interest, but the guidelines are peer reviewed by end-users and other industry stake­holders, too. They then go through a lengthy process of EPA review, where the pressure to eliminate anything that resembles a definitive statement is great. Neverthe­less, the result of this whole process is a set of pretty good guidelines. The guidelines don’t answer all of your questions on any one topic, but they do point out the questions that you should be asking yourself and anyone who is trying to sell you something.

As long as end-users rely on salespeople for the information they use to make million-dollar deci­sions about which system to install in a new store or which refrigerant to use as their standard, this whole is­sue will, in fact, boil down to “it depends.” Unfortunately, in this case, the factors in the “it depends” equation are who you get your information from, what they are trying to sell you, and how much of it they are trying to sell.

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The Final Word on R-22

by kwrmson 4 November 2014in Blog

First published in Frozen & Refrigerated Buyer Magazine November 2015

EPA’s determination means a lot less virgin refrigerant will be available. But nobody knows how much R-22 has been stockpiled, or what will happen to pricing.

A few weeks ago, the EPA issued its final determi­nation on the amount of virgin R-22 allowed to be produced and/or imported in the United States from 2015 through the end of 2019. This determination is what everyone with an interest in refrigerants has been waiting for. Chemical manu­facturers, refriger­ant reclaimers, and refrigerant end-users had been metaphori­cally holding their breath until this EPA rule was issued. Those who weren’t holding their breath were sighing and saying “Just tell us what’s going to happen already.”

So now we know.

HALF AS MUCH R-22

There is going to be less R-22 than there could have been. In fact, the EPA is allowing only half as much R-22 as it could have allowed in 2015 and then decreasing linearly the amount it will allow every year from that lower start­ing point.

Evidently, the EPA feels that there is too much R-22 on the market. In order for the R-22 phaseout to work the way it should in theory, the price of virgin R-22 needs to start rising. Those with equipment that leaks a lot of R-22 will find it cheaper to retrofit that equipment to use a different refrigerant, or to replace the old equipment with new. Those with R-22 equipment that is leak-free can con­tinue to use R-22 into eternity, as long as that equipment stays leak-free. People who don’t have to purchase R-22 for leak replacement don’t care how high the price goes.

Until that equipment leaks, that is.

What’s unknown is the amount of R-22 that commer­cial refrigeration and industrial refrigeration end-users have stockpiled. Will they keep that refrigerant for their own use, or eventually sell it back into the market after reclamation? There is no doubt that some supermarket companies have a lot of R-22 stockpiled. The EPA doesn’t know how much. The EPA has a general idea of how much is in banks with reclaimers, and they have information on how much has been sent to reclaim-ers over the past years, but they don’t have much of an idea of how much unreclaimed used refrig­erant from end-users’ own systems is being stored out there.

Short of commanding every commercial and industrial R-22 end-user to provide data on the amount of R-22 they are stockpiling, the EPA has no way of figuring out that number. And that number is the key to the R-22 phaseout working the way it’s supposed to. The EPA asked some supermarkets to voluntarily divulge how much they were storing, but who knows whether supermarkets told the truth, and who knows whether those supermarkets were representative of the industry. If you knew that EPA was asking you to tell them how much R-22 you had, so that they could accurately cut R-22 production to force prices higher, would you be open and honest with that information?

A VOLATILE MARKET

Imagine a scenario where R-22 prices go up, and then down again a few months later because a few supermar­kets have each reclaimed and sold 30,000 pounds of R-22 into the market. And then the price goes up again, and then it goes down again. A market like that would be very volatile, with end-users having no clue whether to buy or sell refrigerant at any point in time.

I have no idea whether that is going to happen. But if I expected to still be an R-22 end-user over the next few years, I’d certainly be sure that I had my own stockpile that met all of my own R-22 needs. That way, I’d be able to thumb my nose at anything that happens with R-22 availability and pricing in the future. At least I’d have certainty. And that is worth a whole lot.

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What Is Your Used R-22 Worth?

by kwrmson 12 October 2014in Blog

First published in Frozen & Refrigerated Buyer Magazine October 2014

About five years ago at the FMI Energy Conference, I gave a plenary presenta­tion on the EPA’s R-22 phaseout. I posed a question to the audience: Why were supermar­kets paying people to come and haul away their used R-22? I commented, admittedly somewhat facetiously, that paying someone to come and take away your used R-22 after a refrigerant ret­rofit was like finding a suitcase full of money bur­ied in your basement and paying a junk collector to come and haul it away for you.

I was confronted by several reclaimers after the presentation who told me that my analogy was ex­tremely flawed. The money in the suitcase would have to be so dirty that it couldn’t be used unless it was cleaned and made like new. They assured me that I’d gladly pay someone to haul away money that was covered in mud and grease. The conversation then deteriorated into jokes about money laundering, and, as is often the case at the FMI Energy Conference, the conversation resulted in more questions than answers.

Over the past five years, supermarket industry prac­tices with respect to used R-22 have certainly changed. Most recognize now that the value of a pound of used R-22 is about equal to the price you’d pay to pur­chase a pound of new R-22. The common practice is to recycle the used R-22 in-house by running it through a filter drier and storing it for use in the company’s other R-22 systems. Supermarkets save money by not having to purchase as much new R-22, but they also protect them­selves by hedging against future price increases and/or R-22 shortages as the R-22 phaseout progresses to its end stage in 2020.

I know of companies that have not had to purchase R-22 for the past three years because they have their own stockpiles. They watched the R-22 prices rise and fall over the past few years with big smiles on their faces. They aren’t worried about possible price increases when the EPA cuts production of R-22 again next year. Year after year, these companies need less and less R-22, while building up more and more of a reserve. Imagine not hav­ing to worry at all, ever again, about the R-22 phaseout.

Companies do face some challenges in managing these R-22 reserves. How do you transport the R-22 between stores? Where do you store it until it’s needed? Who keeps track of all that R-22? How do you make sure that your refriger­ant doesn’t fall off the back of a truck at some point, especially as the price of R-22 goes up? Finally, how much time do you want your refrigera­tion team to spend on your R-22 stockpile, instead of keeping your display cases cold? All of these issues are manageable, as demonstrated by the numerous companies that have successfully ex­ecuted their plan for used R-22 over the past few years.

DO THE MATH

If a company does 10 R-22 retrofits in a year, pulling out about 3,000 pounds from each of those 10 systems, the company has a stockpile of about 30,000 pounds of R-22. If R-22 costs $10 per pound, you’ve got an asset of about $300,000. Remember that this $300,000 would other­wise be a cost to the company as it purchases new R-22 for its systems. If you take the standard assumption of a 1% profit margin for a super­market, a company has to sell about $30 million worth of goods to earn $300,000.

I have yet to run into a com­pany that can’t find or hire someone to manage an asset of this size. I’d do it. And believe me, if I found a suitcase full of that much money in my basement, I’d find a way to clean the mud and grease off it, too.

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