PM Profile: Grundfos sees a competitive advantage for the U.S. economy with a shift to new technologies
Pump industry needs efficiency standards to use energy wisely.
Grundfos North America President and CEO Jes Munk Hansen
Photo credit: Grundfos
Plumbing & Mechanical last month interviewed Grundfos North America President and CEO Jes Munk Hansen on issues facing the pump industry. A member of the Grundfos Group Executive Committee, Hansen oversees the company’s North American R&D and engineering, production, staffing, marketing, sales and service. Investments he has spearheaded in the United States include the Grundfos Water Technology Center in Fresno, Calif.
PM: Why must the U.S. pump industry establish minimum efficiency standards?
JMH: There are various angles on it, but the most obvious one is that pumping requires a lot of energy. The Hydraulics Institute states that 20% of all electricity in the world is consumed by pumps. That’s a staggering number. I’ve talked with some mayors in California where 40% of their electrical consumption goes to pumping water. It’s incredible what we spend on moving water around both on a national and a global level. We talk about the water-energy nexus of how much water we use to create electricity and then how much electricity we use to move water. We need to break that link so we can use our energy more intelligently.
PM: Why is it important to establish a labeling system for pumps?
JMH: We need better transparency. It’s a little bit like the car industry that brought better visibility to its products by showing miles per gallon. When it comes to pumps, people are not aware of how much electricity is consumed. We need to make that clear to them whether they are installers, mayors, building owners or investors.
Also, we need labeling so people can assess how their existing or new equipment is performing. If you are a hotel owner and walk into your mechanical room, do you have a clue when you look at your big cast-iron products how they are performing? It’s impossible for people, even installers in the industry, to easily compare products. Labeling systems that create transparency will enable us to instill minimum efficiency standards to lift the entire industry to a higher performing level.
The other point is that we must stay competitive. When we look globally, we see other parts of the world moving very rapidly to higher technology levels. Europe has taken big strides in recent years, but also in Asia where we see countries being much more interested in efficiencies. If we in the U.S. do not join that higher level of technology, then I am very concerned we will not be able to remain competitive going forward. We should not only follow, we should lead. There are many examples of industries in the U.S., unfortunately, where we’ve been outperformed by Asia. That should not happen to us in the pump industry. We need to get up to a different level, and that is best done with transparency so everyone knows what works and what doesn’t.
PM: What can be done to address the nation’s aging water infrastructure?
JMH: Technology really is the key here. It’s naive to think that we can fix our water infrastructure by spending trillions of dollars to upgrade pipes and build new pumping stations, power plants and water-treatment systems. That’s not realistic. We don’t have the money to do this and, frankly, much of it would be too primitive to fix. We need to use technology to solve a lot of these problems.
In the case of municipal water systems, the amount of water we are losing in distribution in this country is staggering. We have enormous leakage rates. A cheap fix often used for a high leakage rate is to increase the pressure to make sure something comes out the other end. Of course, you’re only making the leakage rate worse. At Grundfos we have developed systems we call demand-driven distribution, where we install sensors and feedback systems throughout the distribution system. This technology allows our pumps to pressurize the systems to the level they absolutely need.
Technologies are out there, and some of them are not rocket science. On the manufacturing side, we need to take these technologies, build them into the products, and make it simple for installers to install, run and monitor them.
PM: What changes in pump technology excite you the most?
JMH: I’m extremely excited about ease of use. What makes me really excited about our new MAGNA3, released in January, is how we have made a high-efficiency pump very easy to install and, by a push of a button, the pump will automatically find the optimal duty point. That can take off 50% or 60% of the energy consumption in a typical installation. We have integrated the technology so people can use their iPhone or iPad to make it easy to communicate with their equipment. Communication becomes more important both on the pump-to-installer level and on the system level where an automated building system monitors many pumps.
Interface is very important. The iPad is a good example. Think of what is inside an iPad, which is extremely complicated, but they have made it easy to use with the push of a button. That excites me because the pump industry has not always been the most sophisticated place from a technology perspective. But in the last few years some really exciting technologies have entered into our arena that are easy to use and to install.
It’s also exciting for a new generation of installers. We’re attracting a whole new group of young people who are interested in water and energy and heating and cooling, which have become more important on their agenda for society. The tools we use to address these issues have become sexier. Suddenly they can control their MAGNA3 with an iPad and they can run an advanced interface with their condensing boiler. They have an ultimate building system and a completely different job than just installing a few feet of pipe and hammering in a cast-iron boiler in a dark room in the cellar.
I am convinced we are entering an era when new technology is being launched by pump manufacturers and parallel industries such as boilers and chillers, and it’s very exciting.
PM: How will the Grundfos Challenge for engineering and business students benefit the U.S. pump industry?
JMH: The Grundfos Challenge provides a great recruiting base for us to attract new young talent, but it’s also a general awareness campaign on the importance of water and energy. I had the pleasure of meeting all the students at the Grundfos Challenge in Kansas City, and it was just fantastic to see how energized and enthusiastic they were about it.
Many of them said they didn’t know about the link between water and energy. But now they are seeing it and several of them have applied for jobs here because this is an industry people are attracted to. It’s strange that everyone knows water is important, but people start getting excited only when they understand the more complex issues such as where water comes from; what is clean water and what is dirty water; how water gets into a building; and where is it used.
The winners from the U.S. competition will go to Denmark this March to compete against students from China and Denmark where we ran the same event. We’ll see if they can come up with new solutions.
PM: What can contractors expect to see from Grundfos in 2013?
JMH: We’re running a Demand More marketing campaign, which means we want people to demand more from all our products, not just our large and small circulators. Later this year and in 2014, we will be releasing a series of products within motors, pumps and controls under the same concepts as MAGNA3 with similar technologies and philosophies. They will be much more efficient, much easier to install with many more interface opportunities.
Contractors can expect to see much more from us. This is only the start. We’ll be stepping it up a few notches this year and next.
PM: How can contractors establish themselves as green building experts?
JMH: Training is key. We are launching more training on new technologies and more certified programs that count toward continuing education credits. Is there a chance for people to position themselves? Absolutely. From where I sit here in Kansas City, I see more plumbing and heating contractors marketing themselves as green. If I were a contractor, I wouldn’t be in doubt in which direction to go.
I also did some very unscientific market analysis recently where I wanted to upgrade my home heating system to a heat pump. I called in four bids and had the contractors come to my home to tell me the pros and cons. It was quite interesting to see the difference between the guys who pushed me to buy the same thing I already have, just bigger, and the guys who actually understood what credits are available from a tax and utility perspective and who could explain to me what a heat pump does, and explain it to my wife. There was a big difference. It was clear who knew what they were talking about.
If I were a contractor, I would make sure my team and I know what is going on. The utilities provide a significant amount of credits and support on various pieces of technology. And if you’re not on top of that, you’re losing a big piece of competitive business.
I have no doubt that we are looking at the beginning of a big shift in this industry. I am convinced the federal government will come out with much stricter regulations on equipment in the next few years. We know for a fact that the Department of Energy is working on minimum standards on pumps and pumping systems right now, and we expect the first regulations to take effect in the coming years. DOE has been very active within the last year in talking with the Hydraulics Institute and collecting data. A significant volume of the products sold today in the U.S. will be disallowed in the future.
That may be a shocker for us in the plumbing world, but DOE is rationally analyzing where we can optimize this country’s energy consumption. The big power behind this is the utilities. They can’t follow the demand for energy so they are actively seeking places where we can reduce electricity consumption. Industrial electric motors were the first one on the list and pumps is the next. By the way, the U.S. today has the highest efficiency standards globally on electric motors. This clearly shows the direction of our industry.
PM: How is Grundfos using social media to connect with contractors?
JMH: We’ve actually found it a very beneficial way of talking to at least certain groups in the industry. We are using Facebook and Twitter. We update our Facebook pages for North America at least five times a week with new articles or news. We’ll also throw in some product offerings from our site, offer to help homeowners or provide more general information on water. I’m fairly active on LinkedIn, but Facebook is probably the best social media platform for us these days for sharing ideas.
Where Grundfos may be different from other companies is that we’re not afraid of sharing broadly because of our ownership. We’re not on the stock market and we’re not owned by an individual. We are owned by a foundation, and we can point to good stuff happening somewhere else.
PM: What do you see as Grundfos’ most distinguishing feature?
JMH: Technology. If there’s one feature that makes us different from everybody else it is technology and our passion about new technology. We spend more than any of our closest competitors on R&D. Nobody in the pump industry releases as many products as we do. And it’s always high-end technology. There are even times when we shoot a little bit ahead of the curve knowing it will take some time before these markets mature and can absorb all these technologies. But that’s how we operate. We don’t want to be caught behind the curve. We want to lead the curve.
PM: If you had one piece of advice to give to contractors, what would it be?
JMH: Educate yourself. Things are changing faster than most people realize because this has been an industry where there hasn’t been a lot of change. Don’t find yourself off the track. No matter at what level — if I were a specifying engineer, an installer or a contractor — I really would spend time on this myself and also make sure my employees are up to date. You can learn a lot on your website (www.PMmag.com) and others about what is going on.
You need to understand these new technologies, what difference they make to the customer and why they are better than other technologies. Also, you have to know everything that surrounds them such as who gets rebates, how they are installed and how they interact in the system.