District cooling is one of the nine strategic pillars in Dubai Supreme Council of Energy’s Demand Side Management strategy, towards achieving 30% power savings in the emirate by 2030. With government initiatives like this, there appears to be a greater opportunity for growth for the district cooling market in the region, industry experts say.
After the crisis of 2008, there was a general slowdown in the development and construction of new district cooling plants, particularly in the UAE. This was partly compensated by projects in the wider GCC region, recalls Georges Hoeterickx, the director of business development at Evapco, Europe. He says: “In the UAE, in the first years after the crisis, mainly ongoing projects were completed. However, one gets the impression now that there is a real revival in the district cooling business.”
By factoring district cooling as one of the nine strategic pillars towards achieving power savings, there was a concerted push by the Dubai government towards 40% market penetration for district cooling.
On the size of the industry both tonnage-wise and revenue-wise, Charles Russell, sales manager, Tower Tech Inc. Bahrain, says: “Our understanding is that the total in-service district cooling plant (DCP) capacity in the GCC was thought to be about three million refrigeration tonnes in 2015. The aggregate DCP capacity will top five million refrigeration tonnes by the end of 2025.” He adds that the district cooling companies operating in the Middle East had an estimated total annual revenue of around $3.3bn.
It is known that 70% of all the electricity produced in Dubai is used for comfort cooling, and therefore, a strong government and industry leadership is important, says Russell. He says: “DCPs reduce energy requirements considerably. For example, a window- or wall-mounted AC unit uses about 1.8kW per refrigeration tonne, whereas a DCP reduces the energy requirement to less than 1kW per tonne.”
Sanela Habbab, chief operating officer, Emicool, adds that the UAE government wants to ensure sustainable development while maintaining a perfect balance between economic and social development.
She says: “There are several strategies deployed under guidance of the UAE government that support the implementation of district cooling. For instance, the UAE Vision 2021 National Agenda focuses on improving the quality of air, preserving water resources, increasing the contribution of clean energy and implementing green growth plans. The Dubai Integrated Energy Strategy 2030 (DIES2030) that was deployed in 2011 under the guidance of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai sets the strategic direction towards secure and sustainable energy.”
Habbab says that in line with the aforementioned strategies, Taqati (the dedicated programme management office for the Dubai Demand Side Management) and Regulation & Supervision Bureau (RSB) have put the plan forward to achieve the goals.
Habbab adds: “According to RSB’s Dubai Market Share and Efficiency Study, district cooling’s overall cooling market share is 18% whereas ducted split and package units have a market share of 30%. On the other hand, the average efficiency for district cooling is 0.92kW/tonne while the average efficiency of ducted split and package units is 1.62kW/tonne, which is just slightly better than windows AC and split units 1.73KW/tonne. The facts confirm that there is great potential for significant energy savings through a widespread adoption of energy-efficient cooling solutions such as district cooling.”
Habbab adds that the district cooling sector certainly requires government support to achieve its full potential. She says: “The government has set plans to address the structural issues that made the market go against district cooling. The regulations will enable district cooling service providers/operators to improve on structural limitations that face district cooling operations.
“However, we strongly believe that involvement of the end users in energy awareness as global concern will further enhance energy conservation and will shift the population to a higher level of attentiveness that will not act with short-sighted objectives. Instead, the energy-efficient solution known as district cooling will be welcomed more than any other less efficient air conditioning system.”