By Gigi Wood
JOHNSON COUNTY – A small, Nerf-like rubber ball could change the way water is purified in a variety of business uses.
The water that runs through heat exchangers and condensers at power plants and in industrial refrigeration and central air conditioning systems becomes dark and muddy over time, as lime and other deposits accumulate inside pumps and other equipment. That accumulation eventually slows the efficiency of the machines used to cool buildings and generate power.
CQM, a new business located at the University of Iowa BioVentures Center on the school’s research park campus, aims to keep that water clean, thereby improving energy efficiency at power plants and places like Currier Hall on the UI campus.
“We’ve got the tiger by the tail, it’s kind of fun,” said Charles Dirks, CQM’s president.
Last week, crews installed CQM technology in Currier residence hall’s air conditioning system. The UI paid $35,000 for the technology. One of the advantages of CQM’s system is it requires little change to the existing infrastructure; a small chamber is added to the network of pumps and chambers that clean a building’s air conditioning water supply, for example.
“That will treat the cooling water that goes through the residence hall. One of their chilled-water loops, they (the UI) have a really hard time with the biolife in it. They aggressively treat it with chemicals, which is the way to do it,” he said. “This will eliminate the chemicals and it should clean up the water so it’s much more energy efficient. It will also extend the life of their pipe system because we can slow down the corrosion in the water.”
Although it’s a new technology, CQM made a pro forma transaction with the UI, which is investing $25 million on a long-term plan to become 100 percent energy efficient.
“We put together, ‘this is what the paybacks are going to be based on the data you gave us, whether its energy expense, labor, water, chemical expense, etc.,” Mr. Dirks said. “We put all that together, IRRs (Internal Rate of Returns), payback periods and the capital life is 20 years. We put together a view of what it’s going to do over a long period of time.”
Within a month, the water that is now muddy within the Currier Hall air conditioning system will be clear, he said. The UI’s facilities management team can conduct water and corrosion tests to verify the system’s success.
“The chilled water loop is dirty; it looks like milk chocolate, which is very common, they’re not doing anything wrong, they’re highly professional people there,” he said. “It will be clear in three weeks.”
Mr. Dirks grew up on a farm in Jones County and graduated from Anamosa High School, joined the Army, served in the Gulf War as a pilot and throughout his military career, flew a number of different aircraft, including UH-60 Blackhawks. He then worked for Cessna Aircraft for several years before joining Rockwell Collins, where he worked as principal marketing manager for the company’s Next Generation Avionics Program and its information management department.
A chemist he had worked with came across a company doing interesting work on energy efficiency technology in Israel.
“I was always into building business inside of companies and always wanted to do it myself. So I kind of sprung off the high-dive looking for freedom, which is what every entrepreneur wants,” he said.
He left Rockwell Collins two years ago to start the U.S. division of CQM.
“The manufacturer is Israeli-based, which is kind of the green-tech center of the planet,” Mr. Dirks said. “It’s also probably the start-up capital, as well. The start-up rates are many, many times what they are in this country. You have heavy (U.S.) industry traveling like crazy there now because of the green technology happening there now. It’s the center of solar, energy efficiency, creative energy design and development as far as generation goes. And I had gotten into that based on my military background and international travel.”
He chose the Israeli company because its technology is mature and applicable to many markets.
“The products that we represent are very applied now, they’re functional and have tremendous payback where the start-ups,” he said. “The paybacks are typically under two years. So you’re looking at 50 percent IRR’s very commonly and that makes it easier to sell the product.”
With the volume of U.S. companies traveling to Israel looking to invest in new energy technologies, Mr. Dirks said he is unsure why no one else discovered the company he did.
“They tried to sell in the U.S., they’re 16 years old now, and they couldn’t penetrate the market,” he said. “We don’t know why that is. They’re small. And I think prior to 2008 energy costs were so low, the capital motivation to spend in this country just wasn’t there. (When we found them,) the timing was right and the technology has been really mature now for six years. Prior to that, it wasn’t really ready to be totally applied in a mass market like this.”
Mr. Dirks’ company is the exclusive representative in this country and the two businesses are working on creating a stronger partnership.
“We have very aggressive designs with each other for what I would call vertically integrating,” he said. “We’ll probably bring assembly (to the U.S) starting next year.”
When assembly begins, Mr. Dirks plans to hire veterans for the work.
“I want to honor them. To come back to the (U.S. after serving overseas) is a hard acclimation,” he said. “It’s a debt we have to them to make sure they have opportunities to build thriving, prosperous lives.”
CQM’s U.S. operations employ eight employees, including workers in a Kansas City office. That office will eventually move to Iowa. Meanwhile, the company is working on expanding its dealer network in Iowa, Minnesota, Wisconsin, Virginia and Nevada. The goal is to have 25 sales representatives in a year and 50-75 in two years.
CQM has not received financial assistance from the UI or state for its start-up efforts. The company is applying for Demonstration Fund money from the Iowa Department of Economic Development.
“There’s a little bit of a problem with that because there’s a little bit of reticence with the Israeli part of it,” Mr. Dirks said. “We’re not going to let us stop us.”
The little Nerf-like rubber balls that CQM produces will be placed into Currier Hall’s water cooling system. After lime and other debris is removed from the water cooling system, the balls will be injected into the system. The balls will circulate through the system, keeping the chamber walls clean.
“The balls go through and never let the particles build up on the tubes, so it stays perfectly clean,” he said. “And none of these are lost. It’s very low cost of operation and they don’t change the pressure in the system at all, so the amount of energy used to operate the system is not even measurable. Most systems in the Midwest, there’s so much junk in the water, they’re just a mess.”
CQM applications allow water to be treated without chemicals, requiring less water to be used in the process, because water is not needed to dilute the chemicals. CQM’s technology is also being used to create a new product that transforms crude oil into petro fuel.
The company plans on using its applications in power generation, as well. CQM was recently selected as a finalist to work with the Dominion Resources GreenTech Incubator Commercialization Program in Ashland, Va., which hosted five Israeli companies as part of the Clean Tech Gateway USA Program March 30. Dominion, a $15 billion utility company, is working to provide assets in Virginia to serve as a base for Israeli technology companies seeking market entry into this country.
“We were one of those companies to collaborate and partner with them to migrate technology here that’s applicable to our (U.S.) infrastructure,” Mr. Dirks said. “For a typical fossil fuel power plant that you see on the river which is the vast majority of what we have in this country, we can improve their efficiency. These surface condensers when they get dirty they don’t work as well so we can improve power generation in an existing plant anywhere from 0.5 percent up to 5 percent increase in their power output, depending on the quality of their water source.”
He said he hopes to eventually implement that technology in UI’s power plant. If the tube cleaning process proves effective, he would like to take the next step with the water chiller system, which is installing a ball system into the chillers.
“The next step (would) be a building like this (BioVentures Center), to do all the HVAC water and the cleaning of the chiller,” Mr. Dirks said. “And typically you can improve the efficiency of that chiller 15-30 percent; that’s monumental. That’s huge.”
CQM is working on installing similar systems at Luther College and Winneshiek Medical Center in Decorah, as well as private industrial companies.