CERN,GENEVA,SWITZERLAND

NEGVacuumInsulation
NEGevacuatedwindows
PerGunnarHagevik,EirikHogner,AndersMjset 11.06.2008

1 Product
1.1 Introduction

Buildingshavealotofenergylossthroughwindows.Thishasbeenlookeduponasaproblemfora longtimeandwiththerecentenvironmentaltrend,regulationsonenergyefficiencyhasbeen introducedinmanycountries.Theleadingsolutionforenergy efficientwindowsisatwoorthreelayerwindowwithaspecial coatingandargongasbetweenthelayers.Thisisarelatively expensivesolutionwithlimitations.Thelimitationfortwolayer windowsisenergyefficiencywhilstthelimitationsforthreelayer windowsarethicknessoftheglass,priceandtheletthroughof light.Analternativetothissolutiononenergyefficientwindows areevacuatedwindows.

1.2

Evacuatedwindows

Evacuatedwindowswerepatentedin1913,butthefirstcommercialproductwasnotmadeavailable untiltheNipponSheetGlasscompanystartedsellingin1996.TheyhadworkedwiththeUniversityof Sydney,whowereleadinginthefield,since1994.ThewindowiscalledSPACIAanditisstillonthe marked.Anevacuatedwindowisveryenergyefficient,noisereducingandslim.

Thefiguresabovedemonstratetheconstructionofevacuatedglass.Twosheetsofglassare separatedbyasealedframeandsupportpillars.Avacuumisobtainedbypumpingoutmassthrough atube,whichissealedwhentheprocessisfinished.Thepriceforevacuatedwindowsisabout20% higherthanfortwolayerargonglassesandslightlymoreenergyefficient.Threelayerwindowsare moreexpensiveandtheyareheavy,butatthesametime,theyaremoreenergyefficientthen evacuatedwindows.

1.3

NEGevacuatedwindows

Withthenonevaporablegetterwemightbeabletomanufactureevacuatedwindowswithoutthe processofpumpingoutairandsealingthetube.Thissimplifiestheproductionprocessandcan reducethecostofthewindows.Thegetterwillabsorboutgassingmatterandthereforemaintain steadiervacuumovertimethanevacuatedwindowsproducedbypumpingoutmass.

1.4

Gradeofinnovation

Thereisstillneedforinnovationinnormalevacuatedwindows.Thepillars,frameandproduction processhavetobeoptimized.ForNEGevacuatedwindowstheproductionlinehastobeinvented andtheNEGtechnologyhastobecustomizedtothenewproduct.Thegradeofinnovationis relativelyhighandtherearemanyuncertainties.Abiguncertaintyliesinthequestion,whetheror notvacuumcanbeobtainedbytheNEGcoatingalone.Thereislittlepointinusingbooth.

2 Market
2.1 Trends

Overallmarketforglassproductionworldwidewasin2004approximately36milliontones representingavalueofaround100000MNOK.70%ofthisisconsumedinwindowsforbuildings. Overthepast20years,glassdemandhasgrownmorequicklythanGDPaccordingtotheindustry leadingmanufacturerPilkington.Glassdemandisstillgrowingataround3.9percentperannum (2005).Demandgrowthforglassisdrivennotonlybyeconomicgrowth(maybenotatthismoment), butalsobylegislationandregulationsconcerningsafety,noisereductionandtheresponsetothe growingneedforenergyconservation.Inadditionarchitectsareusingincreasinglymoreglassin buildings.

InNorwayregulationsfrom2007saysthatawindowcannothaveaUvalueabove1.2W/m2K.TheU valueisadescriptionoftheamountofenergythattransferstruethewindow.In1987thedemand wasUvalueon2.4,intheperiod19972007itwas1.6andnowitisdownto1.2.Apassivehouse

cannothaveaUvalueabove0.8.Theseregulationshavegivenahighfocusonenergyefficient windowsinthebuildingindustry.

2.2

Segmentation

Therearetwotypesofmarketstofocuson;industrialbuildingsandprivateresidences.Thefirst segmentisthelargest,buthasalsomorespecificneeds.Oneoftheneedsislinkedtothebuilding regulationsthatgiveUvaluesonwindows.Secondtheusesofcustomizedproductsaremuchhigher inthebuildingindustrythanforprivateresidences.Inadditiontheareaofwindowsarealsolargerat industrialbuildings,hencetheneedofstrongerandmorereliablewindows. Priceisanimportantcriterionforabuildingproject,especiallyforthecontractorandbuildingowner. Howeverthesebuildingprojectscanbesegmentedbythedifferentrequirementsandpreferences, intotwodifferenttypesofbuildings;HighProfilebuildingsandstandardofficesandworking premises. HighProfilebuildingsareconsideredthemostattractivesegmentforustoapproachfirst.This decisionisbasedonseveralreasons: - Highwillingnesstopay.Sinceweareproducinginlowscaleatthestartupphaseandwill thereforeprobablyoperateatahighpricelevel. - Buildingownersandentrepreneursinthissegmentareinterestedinnewtechnologyand newsolutions. - Architectsareimportantdecisionmakersinthissegmentandareinterestedinenergy efficientsolutions. - Aninstallationorpilotprojectincooperationwithanentrepreneur,inaHighProfilebuilding willgiveuscredibilityandpublicityintheindustry. - Thissegmentusecustomizedsolutionsandarewillingtopayforthis.

2.3

Entrybarriers

Therearehugeinvestmentsrelatedtosettingupproductionfacilitiesforourproduct.Ifwemanage torisefunding,westillneedexpertiseonhowwemanageanddriftthefacilities.Itmightbehardto archivethisexpertisesincewedevelopatotallynewproductbasedonanewproductiontechnique. Althoughwemanagetostartproductionwestillneedcostumers. Sincethebuildingindustryconsistsofmanyactorsthepurchasingsystemsarecomplex.Itis thereforeimportanttogetintouchwithentrepreneursandbuildingownerssotheycanimplement ourproductintheirnewbuildings.Theseactorsareoftenslowtoadoptnewsolutionsandproducts anditisthereforeimportanttoprovetheconceptandcommunicatethevaluepropositionrelatedto theproduct.

2.4

Customers

Thecustomersdependonwhatkindofbusinessmodelweapply.Ifweareonlyproducingglassfor windows,andnottheentirewindowwithframe,wecouldbesellingglasstohighprofilebuilding producerslikeNorDanandHydroBuildingSystems.Ifwechoosetodeliveracompletewindow solutionwithglassandframe,whichismostlikely,wepositionusselvesinanotherpartofthevalue chain.Bybecomingatotalsolutionproviderthedecisionmakerscanbethebuildingowner, architectsand/orentrepreneurs.

 Thebuildingowner Thebuildingownersaretheonesthatdecidethetotalbudgetoftheproject.Thereforetheyare mostlyconcernedwithfinancialmatters.Hencethepriceisacriterion,althoughthisisnotthat importantforprestigioushighprofilebuildingswhichhaveafocusoninnovation. Thearchitect Thearchitectneedtoconsiderthebuildingownersdemandsandwishestomakeaproposalfora design.Atthesametimearchitectscaninfluencethebuildingownerbothinestheticsandefficient solutions. Theentrepreneur Theentrepreneuristheactualbuilderofthebuildingandisalsomakingdecisionsregardingdesign anduseofmaterials.Theentrepreneurhastofollowregulationsandconstructionmethodsandhas alsoarighttochoosesubcontractors.Thesesubcontractorsareoftenchosenbyprice,howeverifthe buildownerandarchitectsetsspecificneedsonforexampleenergyefficiency,theentrepreneurhas tofollowthisandchoosesubcontractorsthatcanmeetthoseneeds.

2.5

Valueproposition

NEGevacuatedwindowsare: Energyefficient,noisereducing,slim(twolayer),lightweightandlonglasting Economicsavings:

Value Unit 1,1 Watt 30 Kelvin 3240 hours 1 m2 106,92 KWh 133,65 NOK 22,5 m2 3007,125 NOK 4500 NOK Comments Energywindows Vinter=1Spring/Autumn=1/4Summer=0 1020%oftotalarea incl.VAT

Valueproposition What Lossofenergy(Uvalue) Temp.difference(insideouside) Time Areal(basedon1mX1mwindow) Totallossofenergy Priceofenergy(Norwegianestimate) Savingseachwindow Totaltvindusarealienenebolig Annualsavingson200m2residence Priceonstandard1mX1mwindow

1,25 NOK/KWh

2.6

Competitorsandsubstitutes

Therearemanyglassmanufacturersonthemarketaswellastherearemanysuppliersofwindows. Inglassmanufacturingtherearefourmajoractors;Asahi,Pilkington,GuardianandSaintGobain. PilkingtonandSaintGobainarethemaincontributorstothewindowmarketandareestablished worldwide.Theyofferawiderangeofglassesfromenergyefficienttofireprotective.Theyalsohave somejointventuresthatoffervacuuminsulatedglasses.TheseproductsaremainlyknowninJapan,

andentrepreneursinEuropearenotawareofthisaccordingtoVeidekkeaNorwegianentrepreneur company.

3 Organizationandeconomy
3.1 InventorandCERN

TheinventorofthistechnologywasoriginallyChristoforoBenevenuti,awellknownandrespected scientistworkingatCERNfordecades.Benevenutihastransferredthetechnologytoanotherstartup henowisinvolvedin.Thisstartupfocusesoncommercializationofsolarpanels,combinedwiththe factthatBenevenutiisretired,meansthatBenevenutinolongerisanemployeeatCERN.However otheremployeesatCERNlikeoutcontactperson,PedroCostaPinto,hasgreatknowledgeonthe area.CERNcanalsotakepartinfurtherdevelopmentofourproduct,andespeciallyhelpuswith technologicalissuesduringourstartup.

3.2

Productcosting

ThepublicationManufactureandcostofvacuumglazingbyJ.D.RobinsonandR.E.Collinsof2006, comparesthemanufacturingcostsoftwolayerargonwindowsandevacuatedwindows.They concludewithaca20%higherproductionpriceforevacuatedwindows.IftheNEGmanagesto createavacuumwithoutpumping,themanufacturingcostwillgodown.WeassumethatNEG evacuatedwindowscanendupatapriceclosetotwolayerargonwindows.Ifweweretosetthe priceinthesamerangeasthetwolayerargonwewouldhaveamarginofmorethan50%.

3.3

Economicpotential

NumbersprovidedbyPilkingtonshowthatthetotalmarkedpotentialforwindowsisapproximately 100billionNOK.ToestimateamarkedpotentialforNEGevacuatedwindowsishard.TheNSGgroup wouldnotcommentontheirsalesoftheSpaciawindow.Anyway,allthemanufacturerswehave contactedtellusabouttheenergyefficiencytrendsandtheyareinterestedtolearnmore.Wedonot wanttoestimatetheeconomicalpotentialwithanexactnumber,butitisatleastinthe100million NOKrange.

3.4

Fundingandcapitalneeded

CERNgetstheirmoneyfrommembercountriescontribution.Toavoidworkingforprivatnational companieswhilstbeingpaidbyCERNallcommercialprojectshavetobefinancedfromoutsideof CERN.Wehavenotestimatedanycapitalneedbecausewedontevenknowifitispossibletomake agodproduct.