A cleantech game changer for UK boilers?

Oxford, UK-based H2O Venture Partners Senior Investment Manager David Auty knows a good cleantech investment when he spots one.

He told the Cleantech Group he decided to make a recent investment in Sorption Energy his personal project as CEO, though he still maintains his post with the private equity firm. Sorption Energy is a spinout of the University of Warwick, where researchers created and achieved proof of concept for a new absorption system that repurposes carbon and has the potential to offer more energy efficient cooling and heating in residences as well as vehicles.

“We take an equity stake, and we put top quality business people in to set up the company and make it rock and roll,” Auty said.

He said Sorption Energy, backed with an undisclosed amount of funding from H2O Venture Partners, is on the verge of closing on £25,000 ($42,000) from the UK-based Carbon Trust and is working with Italian automaker Fiat to test the technology for its automotive applications.

The Carbon Trust is an independent company set up and funded by the UK government to help accelerate commercialization of low carbon technologies (see Carbon Trust backs energy-efficient pumping technology).

Current electric heat pumps use electricity to extract heat from the air or ground to heat a home, though the electricity used in the process still incurs carbon dioxide emissions at the power station.

The ability to more efficiently drive heat pumps or air conditioners using absorption technology has been well understood. Absorption technology uses heat from a gas flame or engine waste heat to power a closed system, containing carbon and the refrigerant. When carbon is at room temperature, it absorbs the refrigerant and when heated the refrigerant is driven out.

A process that alternatively heats and cools the carbon can be used to extract heat from the air and put it into radiators or hot water tanks. But the large size of such systems has prohibited it from being used in the home or car, according to a news release.

University of Warwick researchers, led by Bob Critoph, a professor in the department of engineering, devised and patented a way to make the device small enough for domestic heating and automotive air conditioning.

“We had this idea for a really compact heat exchanger,” Critoph said.

The arrangement distributes thin sheets of metal throughout the active carbon in the heat exchanger, with each sheet containing more than 100 tiny water channels that make the heat transfer more efficient.

Critoph said two exchangers are used for the car system.

“It can comfortably fit under the bonnet of the car,” he added.

Critoph estimates the technology, when used in domestic heat pumps, could offer reductions of 30 percent or more to fuel bills as well as carbon dioxide emissions, compared to a condensing boiler.

“In a nut shell, compared to the best gas furnace, we will use one-third less gas,” he said.

Auty said there are about 11 million condensing boilers sold a year annually, primarily in the UK, Europe and the Far East, which Auty said represents a major market opportunity.

About 25 percent of the total energy burned in the UK is in the domestic heating and hot water space, he added.

Companies such as British Gas and Cambridge, England-based startup AlertMe are working on technology that would allow consumers to control and reduce heating using the Internet (see British Gas picks AlertMe for trial of online heating control).

The utility has said it plans to spend more than £1 billion ($1.8 billion) by 2011 to help customers improve insulation and install energy efficient boilers.

With vehicles, Sorption Energy’s new system uses waste heat from the engine, converting it into useful cooling. It has the potential to reduce fuel consumption and carbon dioxide emissions by nearly 5 percent, and could be integrated into new vehicles are little or no extra cost, the company said.

Auty said Sorption Energy is planning to pursue greener heating and hot water systems for homes first, then air conditioning for cars. However, it is currently working with the central research group at Fiat on the technology.

Though still developing its business plan, Sorption Energy is going to be seeking additional venture capital funding. Auty thinks it will take another three years of product development before the company would begin shipping its products, Auty said.

“We would be crazy to make the systems and the distribution network,” said Critoph, who is also a shareholder in Sorption Energy.

The company would likely ship components to existing boiler makers, Auty said, such as Warwick-based Baxi, France’s De Dietirch, and German players such as Bosch and Viessmann.

Critoph’s research has been funded with about £2.5 million ($4.2 million) from the UK and European Union governments. Given that he’s been working on the technology over the last 20 years, Critoph said he also has a personal motivation to see Sorption Energy succeed.

“What it is about for me is doing my bit to combat global warming,” he said. “To do that, you have to get out there and make commercial products.”

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