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issue: June 2003 APPLIANCE Magazine

European Heating - On Location in Frankfurt, Germany
ISH 2003 - Turning Up the Heat

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Paul Roggema, APPLIANCE European correspondent

On Location: APPLIANCE Magazine traveled to Frankfurt, Germany to report on the International Trade Fair for Building and Energy Technology (ISH) 2003.

ISH 2003 was awash with talk of the Bosch bid for power, the continuing research and development efforts of the European manufacturers to make fuel cells viable, and the reemergence of heat pumps.

While world events and economies limited the number of attendees at ISH 2003, March 25-29, to 180,000—an 8-percent decline from ISH 2001—exhibitors increased by 3.7 percent, due in most part to the partial return of Europe’s air-conditioning and ventilation industry.

In general, the looks of the fair did not change much from ISH 2001. However, with manufacturers now wanting to project innovative images, the look of the exhibitor stands reflected the change. This was most clear at the Buderus display: where large rectangular panels in shades of blue—the Buderus color—had once reigned; now there were sail-shaped panels with large pictures of people, for the human touch. The Vaillant stand distinguished itself with large bone-like structures, and at Viessmann, the most serious of them all, stylish water drops in bright colors marked a visual change.

Bosch/Junkers offers T60 to T110 geothermal pumps with outputs between 6 to 11 kWh. The units come with built-in hot water storage.

Expanding Horizons

The German heating market has been shrinking since 1994, along with the Austrian and Swiss markets. Thus, the total European market size is about 10 billion euros (U.S. $11 billion). So, what can businesses in the European market, which, as a whole, saw a 2-percent decline compared to last year, do to revitalize the sanitation, heating, and air-conditioning industry?

“In the UK and Italy there are many opportunities for condenser technology. Current shares are 13 percent for the UK and only 3 percent for Italy, against 100 percent for Switzerland and 89 percent for the Netherlands,” said Klaus Huttelmaier of Junkers/Bosch Thermotechnology. “Hence, there is significant market potential, further fueled by an expected law in the UK allowing only condenser boilers to be installed in 2005, and similar discussions on incentives in Italy.” For many companies, this means that the UK is replacing Germany as its largest market.

In a press conference at the show, Mr. Huttelmaier confirmed general ongoing trends in European markets. He said that oil is being replaced by gas (especially in the UK and Germany), the wall-mounted gas-fired boiler is increasingly popular (as is condenser technology), and regenerative energy has enjoyed double-digit growth numbers. Many manufacturers offer solar collectors; products for low-energy and passive buildings, as well as reverse-cycle heating systems; and development in fuel cells is a favorite subject of speculation.

Gerhard Meier-Wiechert, technical documentation management for Veissmann, told APPLIANCE, “Next to the fuel cell, our company sees several interesting trends in the heating market. First, at least in Germany, there is a clear trend to a system perspective instead of just delivering an appliance. This is partly because of legal changes. Previously, there were separate rulings for buildings and heating equipment. Now, there are just standards for the building as a whole, so interaction between architects and heating engineers is necessary. As a company, we are providing much more (and different) information to our customers, increasingly from a system perspective.”

According to Mr. Meier-Wiechert, Veissmann is also experiencing a trend toward condenser technology—also for oil-fired heaters, which is more difficult—as well as strong growth in environmental products. “In Germany, almost half of new houses are built with a solar collector,” he said.

An air-based heat pump from Stiebel Eltron can be placed outdoors, thanks to a protective housing.

Power Stacks

A clear trend at ISH this year was the development of fuel cells. And again, similar to 2 years ago, Vaillant seems to be the leader. At ISH 2001, the company showed a working prototype, and now reports steady progress in the field tests.

“We just started a field test of 30 installations of our second-generation prototype,” said Stefan Jakubik, public relations for Vaillant. “This is a test, partly funded by the European Union, taking place in Germany, Holland, Spain, and Portugal. An important improvement in the new generation is better integration of components…. We learned a lot in the first series. The second important test aspect is the central command system to balance loads. Technically, the stack—the actual fuel cells—got much smaller and more reliable, and the durability of the reformer (to transform natural gas into hydrogen and oxygen) also improved. The vision is to have hundreds of systems working together, achieving maximal efficiency, and it is called the Virtual Power Plant.”

The company has plans to test another 20 systems later this year reportedly in cooperation with almost a dozen public utility companies. According to Mr. Jakubik, even larger trials are scheduled for 2004 and 2005, and the date for commercial introduction of the fuel cells will depend on the outcome of the tests, which need a careful approach. “Power companies need to accept the system where small, private power units supply power back into their power lines,” Mr. Jakubik said.

The Baxi Group’s recent acquisition of two companies clearly showed its interest in renewable energy sources. First, Baxi bought European Fuel Cell GmbH, a former research group of the Hamburg-based EON power company. “We now offer the second generation of our fuel cell product to show the market what we can do,” said Guido Gummert, general manager of European Fuel Cell. “It has a 1.5-kWh electrical and 2.9-kWh heat power output, uses gas, and is combined with a condenser boiler in one housing. About 65 percent daily use of heating power can be covered through the fuel cell.”

Also crucial was the purchase last year of German SenerTec, the market leader in cogeneration units or CHPs (combined heat and power). The company said that its flagship DACHS CHP unit is the most popular in its class. It contains a 579-cm horizontal one-cylinder, four-stroke engine, and delivers about 5 kWh electrical and 10 to 12 kWh heat power in gas and oil versions. CHP business is picking up in Germany because there is a fixed and guaranteed tariff for delivering power back to the public power network.

Through its acquisition of SenerTec, Baxi Group gained valuable cogeneration experience. Because fuel cells are basically CHP units, many issues regarding cogeneration must be solved before fuel cell installations can be successful, and fuel cell units are not possible without a cogeneration infrastructure

It looks like a washer window, but it is the Viessmann MatriX gas burner. There are no flames, but an equal “glow” in the mid-size VitoCrossal 300 boiler. APPLIANCE magazine photo.

Heat Pumps

In renewable energies, next to the fuel cells and the cogeneration units, the heat pump makes its comeback. This product, in different versions, is an important product for Stiebel Eltron, a German company that became well-known for instantaneous water heaters for kitchen use. “The current products are greatly improved,” said Michael Birke, director of Public Relations. “They now use geothermal heat, and the pipes are inserted vertically, about 50-m deep. Previously, one had to use horizontal tubes, which took much more space. With our system, one unit of electricity can produce five units of heat.”

According to Mr. Birke, a heat pump is more expensive at the time of purchase, but on the long term, savings are substantial. He added, “The heat pump market was very difficult for several years, but now there is a 30-percent growth. Market size is about 9,000 annually, and we are happy to be market leader.”

Another buzzword was the passive house—one with no external energy added. If the energy from room heating is recycled through a heat exchange in the ventilation system, up to 90 percent of the heat is recycled, and only the remaining 10 percent has to be delivered by the heat pump (using air). Stiebel Eltron manufactures integrated systems, combining a heat pump and a regenerative ventilation system.

A different approach to the heat pump is taken by Buderus. Instead of an electric-powered compressor, it uses a gas-powered absorption cycle, with a mix of water, ammonia, and helium. This is the same as is found in camping and hotel refrigerators, but Buderus increased the capacity to about 20 times of the existing circuits.

According to Buderus, the one-stage absorption process is capable of adding 50 percent to the energy value of the primary energy source, so that the theoretical output/input ratio could be 150 percent. In daily use, savings of about 20 percent are expected.

Bosch/Junkers announced a new heat pump product line: the Junkers T 60 to T 110 geothermal pumps, which are compact units with outputs between 6 to 11 kW, and have a built-in, stainless steel hot water storage tank. The units feature an integrated ventilation module to extract the energy in the waste air.

The Vaillant remote terminal allows the technician to remotely check any boiler parameter. Fast service can be provided with direct three-way voice connection between the technician, the customer, and the Vaillant support center.

Networking: Vaillant VR Netdialog

Home networking was not as visible as at other competing fairs (Mostra Convegno and HomeTech), and market developments are said to be slow. Still, Vaillant was proud to present its networking product line. In the system, the heating system is connected through a modem with an external server, which can be accessed through a cellular phone, a PC, or a PDA, of which the latter is thought to be the focus of attention. This is because the target customer is clearly the service technician, who needs a compact but user-friendly terminal. The technician can call up operating parameters as well as customer and equipment data, and can be voice-connected directly to the Vaillant callcenter for more assistance, even in a three-way conversation with the customer. Much attention was paid to the plug-and-play aspects, for on-site ease of use.

Current systems use telephone modems, but connections through IP-addresses or RF-modems are foreseen. Most of this is not new—Italy’s MTS had several previous offerings—but Vaillant added several elements: the PDA as a mobile terminal, functions primarily geared toward the service technician (such as the remote, quick first check as a response to a customer call), and the payment method. The test phase is finished, and the system will go on sale mid-2003, first in Germany, then in Austria and Switzerland.

“In combination with the new condensing appliances with CO sensors, the system has an additional advantage: it performs security functions,” said Mr. Jakubik of Vaillant. “We call it the CareFree service. There will be functions for preventive maintenance: internal errors are detected before they turn into serious problems.”

“Conventional” New Products

Next to all the new developments, there were also several more traditional product announcements. The product that was highlighted by almost all manufacturers was the closed-casing reservoir boiler.

Customers reportedly like the floor-standing gas or oil boiler instead of a wall-hanging one, with separate DHW reservoir, and many even prefer a reservoir as large as 200 to 300 L. Usually the boiler would be installed in the cellar, where looks do not matter, so the piping and components on the appliance were visible.

Now, more customers want to install their boilers in living areas, so reservoir boilers (gas- and oil-fired) are offered with a much more compact closed casing. Bosch/Junkers has the Cerasmart line, Buderus offers the Logamax Plus, and Viessmann has the Vitodens 222 model. The DHW calorifiers are smaller, less than 100 L, and have temperature layers: instead of a heating element inside the tank, an external heat exchanger feeds into the top of the tank where the hot water is available immediately, doubling the peak capacity.

Jockeying for Position

The Vaillant-Hepworth Group

Two years ago the takeover of UK-based Hepworth by German Vaillant was in the headlines, partly because Vaillant was about the same size as Hepworth, and the combination of the two created the largest heating manufacturer in Europe with 9,300 employees.

When asked about the results of the takeover, Stefan Jakubik, public relations for Vaillant, told APPLIANCE, “It worked beyond expectations. The integration of Hepworth Group and Vaillant is on schedule. We are integrating marketing, administration, IT, and controlling, and we are achieving significant cost reductions.

A clear example is the consolidation of our service units in various markets. In some countries even the back offices of different brands were merged, while strictly maintaining the brand identities.”

After the takeover, the company appears to be flourishing against the market. The company boasts a 10-percent revenue raise over 2 years to 1.8 billion EUR (U.S. $2 billion) and an EBITDA margin up from 11 to 13 percent.

Bosch vs. Buderus

The biggest issue at ISH 2003 was still the Bosch/Buderus takeover. Electrotechnical giant Robert Bosch GmbH has wanted to take over Buderus for some time, and different approaches have been tried. At ISH, the only information was that Bosch had acquired about 10 percent of Buderus’ shares. In a later press statement, however, it was announced that the important 30.02-percent share in Buderus belonging to Bilfinger Berger AG will be sold to Bosch, and Bosch will renew the offerings to other shareholders. Many at Buderus fear that there is too much overlap between Buderus and Bosch Thermotechnology/Junkers division, and that the takeover will lead to major changes in Buderus operations.
Buderus itself performed two minor takeovers: a wholesaler in Turkey and Boulter Boilers, a 96-staff heater manufacturer in the UK.

The Baxi Group

Other interesting news on consolidation was the takeover of two smaller companies—SenerTec and European Fuel Cell GmbH, both German—by the Baxi Group. This UK-based company purchased German Brötje 3 years ago, and last year Turkish manufacturer Baymak joined the group, which now consists of 32 companies. Both purchases were made to strengthen Baxi’s renewable energy operations, as SenerTec is in Combined Heat and Power units (CHP), and EFC is in fuel cells.

The Baxi group is the third largest company on the European market with about 5,500 employees. In the UK, Baxi is strong in fireplaces—gas- or electrical-powered—a typical British habit. They are sold in many varieties, but are virtually unknown on the continent.

Air-Conditioning in Europe

The air-conditioning business has its own fair in Germany, the IKK. Still, a few manufacturers were present at ISH, and Tedy Kuni of Carrier Product Support was present to report the latest news on the European air-conditioning markets.

“Due to the mild climates, residential air-conditioning is a luxury product,” he told APPLIANCE. “Industrial markets are similar to the U.S. or Japan, but the private markets are small, and quite slow in adapting new technologies.” According to Mr. Kuni, European consumers are beginning to understand the benefits of air-conditioning due to the strong sales of car air-conditioning. “We adapted our strategy,” he said. “The emphasis is now on the wellness aspects (the fourfold air filtering), comfort, and energy efficiency (through inverter technology). We do not picture just white boxes in our brochures anymore.”
Mr. Kuni also commented on the differences between the world’s air-conditioning markets.

“The differences are startling,” he said. “In Japan, inverter systems have a 90-percent share, in Europe just 10 percent. Also, temperature perception is different. The industry has different graphs, picturing temperature versus comfort perception, for the various continents. The Europeans set their thermostats different (higher) than Japanese and Americans. Furthermore, the U.S. customer is keen on value-for-money and is willing to sacrifice efficiency and features.”


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