Giuseppe Chiorazzo
Joel Hiltunen
Evgenia Khashchanskaya
Julio Gomez
Hanken School of Economics
Sanchi Maheshwari
Martin Fougere
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AC drives are intelligent devices used to control electric motors’ speed to save energy and reduce emissions. AC drives can also be utilized to convert energy from renewable resources like the sun, wind or tides, and transmit it to the electrical network or use it for local consumption. In hybrid technologies, AC drives are used to combine conventional energy sources and energy storages to create total energy management solutions.
In their current form, Danfoss’ AC drives can help companies reduce their energy consumption by up to 40% when paired with other system-wide efficiency measures. In addition to positively impacting affordable & clean energy (SDG 7) and industrial innovation (SDG 9), AC drives also contribute to the development of sustainable cities & communities (SDG 11) and help companies fight against climate change (SDG 13).
Although the traditional uses for the technology reside in the realm of pumps, fans and compressors, Danfoss is continuously searching for new applications for their solutions, such as building automation systems.
As of today, the company offers many tailored AC drives across a wide variety of applications and industries. The extended product portfolio includes solutions for every need, including low and medium-power drives, full power range drives, dedicated drives, decentralized drives and servo drives. All of Danfoss’ AC drives are completely independent from motor and system controllers, which means they can function with all motor types. This makes them great for both performance and sustainability, as customers can always choose the most efficient and environmentally-friendly product combination without restrictions.
The company is relentlessly developing their products and creating new innovations thanks to their remarkable efforts in R&D.
The wish of Mads Clausen, Danfoss founder, was that his company would manufacture electronics. In the early 60´s Danfoss was a purely mechanical company and not many understood electronics, so the founder set up a research department and the goal to achieve was to identify which type of electronics Danfoss should produce.
Two Danfoss engineers, after attending a conference in London, became interested in the speed control of AC motors. They initially concluded that it was impossible to make speed control of AC motors, nevertheless they decided that Danfoss should proceed in this endeavour anyway. The challenge was taken very seriously and the vision was to make and bring a new technology to the market for a commercial use. In 1968 the first commercial drive was manufactured from Danfoss Drives and since then the company has contributed to the sustainability agenda of the world in a significant manner. Since then, the company has shipped more than 20 million drives all around the globe. These drives are running different types of electric motors and are also converting the energy generated from renewable sources to electricity. More and more applications in different industries are using AC drives and that makes the world more sustainable.
Tuuli Sarvilinna, Vice President Business Development and Global Marketing, says Danfoss is truly something special: “What motivates me are innovations that have positive effects on our societies. Our AC drives here at Danfoss not only make the world more sustainable, but a better place to live.”
Danfoss’ AC drives have a positive effect on improving electric motors’ efficiency and sustainability. According to company studies, their products can reduce motor energy consumption by up to 40%. It is estimated that the usage of AC drives in controlling all suitable applications, such as pumps, fans, and compressors across the world, could reduce global electricity consumption by 8%. As such, AC drives have a proven impact on several United Nations’ Sustainable Development Goals.
In the short term, Danfoss’ AC drives have provided multiple customer companies an immediate boost in efficiency and cost-effectiveness. A lower energy consumption has allowed companies to do more with less - as a result, they have been able to direct resources towards other strategic functions, such as R&D. In the long term, the solutions have given companies the possibility to significantly lower their energy consumption and CO2 emissions. Danfoss itself is a great example: the company has reduced their energy intensity by 43% and CO2 output by 27% since 2007.
Continued R&D and investments into new innovations regarding their AC drive technology has allowed Danfoss Drives to achieve consistently great results, multiple years in a row. In 2017 the company grew over 7% percent - ahead of the forecasted industry growth rates - while also improving their overall profitability.
The increasing adoption of Danfoss’ AC drives across multiple industries and new applications is also helping the company increase their market share and move into new product areas. Danfoss Silicon Power, for example, is a new business venture focusing on developing customized power modules for automotive, solar, wind and industrial applications. The growing revenue from the company’s AC drives business has allowed them to explore new territories in regards to their technologies and expertise.
According to Danfoss’ bi-annual employee survey conducted in 2017, all HR metrics have also improved since 2015. Although the survey combines results from all of Danfoss’ business units, it is still a good indication of the increased employee satisfaction. On a more anecdotal level, Danfoss Drives’ managers and top leadership have noticed an improvement in employee engagement resulting from the company’s redefined mission as true leader regarding climate change and sustainability.
Danfoss’ AC drives’ benefits towards the wider society and environment are multiple. Firstly, it allows companies, cities and countries alike to increase their energy efficiency (SDG 7), thus contributing to more sustainable communities (SDG 11) and reducing climate change (SDG 13). With better-optimized electric motors across a wide variety of applications, such as building automation systems and cooling fans, both public and private organizations can consume less energy and cut down on their emissions. AC drives can also contribute indirectly to other causes, including societal well-being, as optimized devices usually result in healthier city environments with better cooling, ventilation and heating.
Secondly, AC drives foster industrial innovation (SDG 9) by enabling customer organizations to cut down on costs and operate more efficiently. Technological progress and manufacturing are all important drivers of economic development and sustainability - with improved infrastructure and machinery, companies are able to generate more innovations that benefit the world in the long run.
A large part of the solution’s success in terms of sustainability can be attributed to its potential in improving traditional metrics of business performance. Although sustainability is increasingly visible on most companies’ corporate agenda, it is often competing with traditional operative goals. By contributing positively to both profitability and sustainability, the Danfoss’ AC drives encourage adoption with a clear “win-win” scenario. To this end, their products have also been awarded with the “Solar Impulse Efficient Solution”-label, which recognizes innovations that protect the environment in a profitable way.
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Danfoss Drives is a global leader in developing, manufacturing and supplying state-of-the-art AC drives that help companies of all sizes maximize the performance of their electric motors, along with saving energy and minimizing emissions. The company has been operating for over 50 years and their AC drives are installed across several industries, such as food and beverage, HVAC (heating, ventilation, and air conditioning), cranes, hoists and maritime, to name a few examples. Danfoss Drives is the combination of Vacon, Finnish-based global AC drives manufacturer and the Danish group Danfoss.
