If you are inclined to enjoy a cold beverage drawn from a cooler on a hot afternoon while you are out in the sun, then you already understand the concept of what an intercooler does.
The process of compressing air elevates the air temperature, sometimes to quite high temperature levels. As air is compressed and driven into the compressor tank the temperature of the compressed air will rise. As the compressor runs longer, the air temperature will become hotter.
In order to deal with the increasing compressed air temperature an intercooler will often be installed in the line between the two cylinders to help cool the air before it is ingested into the next cylinder for further compression. The intercooler improves the compressor's efficiency.
In a multi-stage unit compressor, the air is compressed in succeeding cylinders, getting hotter and hotter along the way. The "ribbed" air lines between cylinders and into the tank on the following Husky compressor are an example of a basic intercooler. The "ribbed" air lines offer more surface to the surrounding air, transferring heat from the air in the line to the atmosphere.
In air cooling the compressed air will pass through a chamber, on the outside of which, is substantially increased surface area - sometimes called fins - exposed to the ambient environment. The increased surface area will allow the heat inside the compressed air line to move more readily to the surface and to escape into an area of lower temperature.
Cool water will flow around the outside of the air line, quickly taking heat away, and cooling the compressed air rapidly.
The longer the air sits in the compressor tank before use, the cooler that compressed air will get, and the more condensation will take place in the receiver.
That, and frequent draining of collected water through the tank auto drain or manual tank drain, will prevent this condensed water from entering the downstream airline, benefitting all downstream air components that are negatively affected by water.