Exampledocument

The Customer: The process industry has been looking for effective separation methods, especially for mist-type components with small particles from dielectric fluids under elevated pressures. This project undertakes one of the most urgent and challenging portion of this problem, which is separating lubricating oil from refrigerant in refrigeration and A/C systems, heat pumps and ORC co-generation. Poor lubrication leads to premature compressor failures but also to loss of cooling capacity and increased use of electric energy. The proposed technology addresses a large, worldwide market of 300Bln that encompasses large manufacturers of compressors and condensing units, engineering firms that design, install and maintain the HVAC equipment, as well as smaller, local refrigeration and A/C service providers. This industry faces many immediate problems of either technical or legislative nature, with most urgent being the requirement to meet efficiency standards prescribed by US Gov't and to comply with Montreal and Kyoto Protocols in regards to conversion to new environmentally-friendly refrigerants. There is also a strong, century-old need to improve the operation of refrigeration systems at the periods of low cooling capacity, when lubrication of compressor maybe compromised due to low gas velocity in piping and inability to carry the lubricant throughout the system. The proposed technology addresses all these needs and requirements. Further, if this development is successful then similar separation methods could be adopted in chemical, refinery and food/pharmaceutical industries. Typical applications may include removing contamination or hazardous liquid mist from gas.

1. 
   The number of scientific papers devoted to compressor lubrication and oil circulation; specifically, our personnel attended Compressor and Refrigeration Conferences at Purdue from 2004 to present and AHR Annual Conference from 2002 to present.
   
2. 
   Own experience performing STTR Phase I and II research for NSF developing new refrigeration cycle with ejector – although the project was successful and achieved 16% COP improvement but still this was less than theoretically calculated 25%, mainly due to lack of proper oil separation.
   
3. 
   Discussions with manufacturers, installers and field technicians over last 25 years – they all bring oil separation/lubrication as a major problem in refrigeration today.
   
4. 
   Industry support – letter from Babcock Co. attached with this proposal.
   

Customers will include large compressor and condensing unit manufacturer, engineering firms that design, install and maintain large, central refrigeration and A/C systems and smaller service companies. Examples are shown earlier in Para. 2.2.

For an initial business model, the following possibilities are considered at this time: 1) organize in-house fabrication of separator device, starting with dedicating units for specific types and models of refrigeration and/or A/C units, 2) design a line of oil separators and selling the license to one or more major manufacturers, 3) create a joint venture with other company for designing, fabrication and marketing, 4) organizing world-wide network of sales representatives for a licensee.

Competition. The electrohydrodynamic separation has been researched in the past but while many theoretical publications exist, very few commercial products have been introduced to-date. The only larger-scale applications include dry ore separation in mining and separation of brine emulsified in crude oil, in petroleum industry [18]. No mention of oil-refrigerant separation by coalescence augmented by electric field was found in available publications or patents. To the best of our knowledge, ours is the first approach in the world to practically use corona discharge in refrigeration. However, we still be competing with conventional, separation methods, such as filters, cyclones and there are many companies offering such products. The increasing interest in improving regulation range, converting to environmentally-friendly refrigerants as well as energy savings will continue to drive growth in the area of compressor lubrication. This is well aligned with our value proposition. No substantial change between now and project completion is expected because the problem is known for many years and only small, incremental improvements being introduced without game-change development. As an example, the oil-free compressor was introduced by Danfoss lately but it didn’t achieve any sizable market share.

Key Risks and Challenges. The major hurdles to overcome will be the fact that the market for cooling equipment is well established and we expect some resistance to this new approach due to “not invented here” syndrome. Customers may be reluctant because this technology was never tried before in refrigeration and it represents a "disruptive" change rather than incremental improvement. Accordingly, we need to appear as a provider of enabling technology and below are few examples of approaches with customers and competitors:

1. For refrigeration, A/C and heat pump systems manufacturers, our product will support compliance with laws restricting use of refrigerants as required by Montreal and Kyoto protocols. It will also broaden a control range of system cooling capacity improving cost and competitiveness.

2. For large compressor and condensing unit manufacturers, our product will help improve their average COP/energy usage and advance environmental standards as dictated by government regulations as well as decrease of initial costs of the systems and reduce maintenance budget. Therefore their products will be more competitive in comparison with conventional systems.

3. Seek new and unusual applications – for example gas liquefaction, compressed air cleaning, two-stage heat pumps, transcritical CO₂ systems, etc. Effective oil separation will contribute to further development of the innovative and high-efficient refrigeration, for example ejector systems.

A conservative estimate for the first year worldwide market is a minimum of 3,000 units to increase to 20,000 units in the third year. At average price of $300 each, depending on size, the estimated first year revenue should reach $900K and grow to $6Mln in the third year. In addition to manufacturing, we envision selling licenses to larger manufacturers, and assuming that 1Mln units will be sold in the 3rd year at 5% royalty, the additional revenue will be $15Mln. If the project is successful, we are planning to organize in-house manufacturing for the entire line of oil separators to provide a sustainable business for the company. The proposer has the international sales force in US and over 20 countries that can be quickly activated for this product, minimizing the time from development to commercialization. Finally, this project has the potential to create many professional and manufacturing jobs for the local economy.