Up to 50,000 CO2 heat pumps in China – Shandong Melinda interview 

By Huiting Jia, Aug 09, 2012, 16:51 5 minute reading

This week, R744.com talked with Li Gang, the Chief Engineer of Shandong Melinda, one of the first Chinese domestic CO2 heat pump manufacturers about the latest CO2 heat pump market trends in China. According to Li Gang, in the next decade, the market share of CO2 heat pump has the potential to reach 5% and there could be 50,000 CO2 heat pumps installed in the country in 2020.

R744: Compared to the CO2 heat pumps produced by Japanese companies, what are the unique features of Melinda’s CO2 heat pump?  
Li Gang: Compared to the CO2 heat pumps produced by Japanese companies like Sanyo, which focuses on domestic water and space heating, we produce high-powered CO2 heat pumps for commercial use. We mainly produce 2 types of 18kW commercial CO2 heat pump: the MHH-70a CO2 Heat Pump Water Heater and the MHH-70b for space heating.  
In the north of China, in winter the outside temperature is usually very low, conditions that pose a challenge to the consistant and stable operation of heat pump is, which is why most heat pump manufacturers choose not to enter the market in Northern China. Based on the technological improvements, our products can operate smoothly even the outside temperature is as low as -30°C. Our CO2 heat pumps has operated smoothly in the Bumade Station on the Qinghai-Tibet railway line at 4,800m above sea level, achieving operational cost savings, and also in many other commercial cases. As a result, we are getting more and more orders from hotels, restaurants, and public sauna lounges from the northern provinces. 
R744.com: To your knowledge, are there any other heat pump manufacturers in China also investing in R&D for CO2 heat pumps?
Li Gang: In China, there is a group of companies conducting research and producing CO2 heat pumps. Most of them focus on domestic CO2 heat pump water heaters, like Midea and Highly. Both of them have announced the successful production of their own CO2 compressors. For commercial CO2 heat pumps, besides Melinda, as far as I know there is one other company (Dong Qi) in Kunming, Yunnan Province, working on this technology.
R744: How do you see the present CO2 heat pump market in China and how do you evaluate the future market potential of CO2 heat pumps in China? 
Li Gang: CO2 heat pumps are a very hot research area among many Chinese universities and research institutes, especially in Xi'an Jiaotong University, Shanghai’s Jiao Tong University, Tianjin University, and Zhejiang University. Most of these universities and research institutes have already established CO2 heat pump laboratories and some of them have made prototypes. 
CO2 as a refrigerant is a “no regrets option” for China. Once CO2 is adopted the in refrigeration and heating sectors, the government will not face the problem of choosing other alternatives after several years when new international standards and obligations come out. 
Although the CO2 heat pump is still new to the Chinese market, as meets several key consumer demands, I believe the market potential is significant and will grow fast in the future. In particular CO2 heat pumps operate well under cold climates and can provide high temperature hot water. What’s more, CO2 heat pumps can help landlords to save energy by warming up water from 15°C to a certain point before using gas-fired or electric boilers to heat water to the required temperature. 
The CO2 heat pump can play a more active role in space heating especially in the North of China. Usually the hot water inside buildings for space heating needs to reach 65-70°C, which is unattainable for common heat pumps. Our company actually has more CO2 heat pump projects for space heating than hot water heating. 
R744: What do you estimate the market share of CO2 heat pumps in China to be in 2020?
Li Gang: The market for CO2 heat pumps in China is still a niche market today but with a large growth potential. In my opinion, like Japan, CO2 heat pumps could also become popular in hot water and space heating in China.  I anticipate there could be up to 50,000 CO2 heat pumps installed in China in 2020 and the market share could reach 5%. 
R744: What are the main barriers facing the expansion of CO2 heat pumps in the Chinese market?
Li Gang: In China, compared with HFC based heat pumps, CO2 heat pumps are usually 2 to 3 times more expensive. This is one of the biggest disadvantages of CO2 heat pumps although CO2 heat pumps are more competitive when it comes to producing high temperature hot water and have relative high COP. The reason most of our clients chose CO2 heat pumps is because common heat pumps with HFCs as refrigerants cannot meet their needs of high temperature hot water. 
In addition, customer awareness and government support for CO2 heat pumps is currently insufficient in China, which also impedes the emergence of a fast growing market.  
R744: Does Melinda have some concrete market strategies to promote the wider application of CO2 heat pumps in China?
Li Gang: We have tried and are working hard to find more partners like energy companies to adopt CO2 heat pumps for energy saving building management in China. We are also cooperating with research institutes and universities to jointly apply for projects and seek funding. But until now, there has been no major progress. Since the government is not familiar with the technology, there is no financial or policy support for CO2 heat pumps right now. 
R744.com: many thanks for your insights!
About Shandong Melinda
Shandong Melinda is a Chinese CO2 heat pump manufacturer established in 2007. The company was one of the first to focus on the research, development and production of CO2 heat pumps and high temperature water-source heat pumps. Its CO2 heat pumps cover residential, commercial and industrial applications and have been applied throughout China in hotels, schools, hospitals and public sauna lounges, which have a high hot water demand.


By Huiting Jia

Aug 09, 2012, 16:51

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