IT specialist Holger Sedlak used to have good job at German semiconductor manufacturer Infineon where he developed over 80 patents. These days he would rather sell cooling systems, a change of tack which all began with an oil furnace.
Twelve years ago, Mr. Sedlak had a modern oil-fired heating system installed in his house in a Munich suburb. Much to his frustration, the new model was hardly any more efficient than his old furnace. There has to be a better way, thought Mr. Sedlak, and began to tinker around with ideas.
He came up with the idea of an efficient heat pump without environmentally-harmful coolants, mindful of the fact that hydrocarbons are notorious greenhouse gases. In the end, the heat pump he had planned to make became an innovative cooling machine. Every heat pump also produces cold, just as every refrigerator gives off heat.
“Around 90 percent of the refrigeration systems being sold today will no longer be allowed to be sold beginning in 2019.”
“Everybody told me it wouldn’t work. A lot of companies had tried that and failed,” Mr. Sedlak said.
But he carried on.
“I’m neither a heating expert nor an engineer. Thank heavens!” he said. “All I know are the laws of physics. I simulated them on my computer and realized it had to work!”
Mr. Sedlak, 49 at the time, and his 37-year-old colleague, Oliver Kniffler founded Efficient Energy after they quit their jobs at Infineon in 2005.
“I was a senior employee and each year got a higher salary – that was simply tedious,” Mr. Sedlak said.
Mr. Kniffler, who is an engineer, said they are trailblazers: “It’s a completely new technology.”
They had to develop almost all of the components themselves, from the mini-turbine to the magnetically-levitated electric motor. There are around 50 patents in their centrifugal eChiller which was developed in Mr. Sedlak’s garage.
And their enthusiasm has paid off. Efficient Energy was recently rewarded by €60 million in venture capital.
Cooling with water has a long tradition. Ancient Egyptians used clay jugs filled with water to draw the heat out of the surrounding area. Efficient Energy’s eChiller is a traditional compression refrigeration system.
“The main thing is we are able to write refrigeration history.”
What’s innovative is the cooling agent – tap water that is placed under a vacuum. The eChiller avoids harmful coolants and lubricants, while saving on electricity at the same time.
The German Federal Ministry for the Environment has awarded the idea the 2016 German Cooling Prize for efficient technology.
And the cooling and air-conditioning systems industry is under pressure to be innovative. Part of this is the step-by-step banning of the use of environmentally-harmful coolants like fluorinated hydrocarbons (FHC) that replaced the equally harmful chlorofluorocarbons (CFC). According to European Union guidelines, by 2030 only 20 percent of the current amount will be allowed.
And the E.U. Ecodesign Directive dictates that refrigeration systems are to become more energy efficient. The result is that “around 90 percent of the refrigeration systems being sold today will no longer be allowed to be sold beginning in 2019,” said Jürgen Süss, Efficient Energy’s chief executive.
Germany’s largest dairy company, Deutsche Milchkontor (DMK), has two eChillers running in its data centers which serve several thousand users.
“The miracle machine works,” said Joachim Hagenah, head of the company’s hardware and networks division. “It’s a revolutionary technology. The unit doesn’t even use half the electricity over the year that conventional cooling systems do.”
Cooling accounts for about half of the electricity costs for a computer center. That’s why Google and Facebook have built their server farms in cool Scandinavia. Germany has around 44,000 data centers. But smaller companies can’t simply move their servers to the polar circle.
The International Institute of Refrigeration (IIR) calculates that cooling and air-conditioning systems consume about 15 percent of the world’s electricity. The IIR estimates the market for air conditioning and cooling technology to be between €70 billion and €80 billion.
The eChiller is not only suited for servers but equally for building air conditioning, particularly in the food industry.
Businessman Wolfgang Jacobi was the first to invest in the innovation. MIG Funds came aboard in 2008. Santo Venture Capital, owned by Hexal founders Andreas and Thomas Strüngmann, joined in 2013. All in all, Efficient Energy has collected around €60 million.
Helmut Jeggle of Santo believes in the breakthrough of the innovation: “It’ll get really exciting in 2017, when the market launch accelerates the scaling effects.” Then more than 100 eChillers are planned to be built, and they aren’t expected to be more expensive than conventional cooling systems.
But Efficient Energy’s market launch hasn’t been smooth.
“The company grew faster than the product was being made was market-ready,” Mr. Süss said. “There was a purchasing department and quality assurance, but at first they didn’t have anything to do.”
In 2015, Efficient Energy was forced to let half of its 60 workers go. Today, the company employs more than 50 people.
These days, curious technology scouts from many companies pay a visit to Feldkirchen, just outside Munich.
“Maybe we’ll join together with a big partner with production facilities and global marketing or maybe we will go public – we’re open to everything,” Mr. Süss said.
For inventor Mr. Sedlak, who actually only wanted to improve his heating, one thing counts: “The main thing is we are able to write refrigeration history.”
Katrin Terpitz covers companies and markets at Handelsblatt, focusing on Germany’s Mittelstand and family-owned businesses. To reach the author: firstname.lastname@example.org