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Kuwait warms to district cooling

The Kuwait District Cooling Summit, held in end-January, attracted presentations from experts and industry insiders. The collective experience and erudition raised as many questions as they answered. We bring you a summary …

| | Mar 20, 2011 | 10:15 am
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The two-day Kuwait District Cooling Summit, held on January 25 and 26, had a sense of urgency and purpose to it. Organised by the Ministry of Electricity and Water, under the patronage of H.E. Dr Bader Al-Shuraiaan, Minister of Electricity and Water, the event was indicative of the fact that district cooling was high on the country’s energy-conservation agenda.

The oft-repeated statistics is now common knowledge: Kuwait holds around 10% of global oil reserves but faces domestic power concerns. It has one of the world’s highest per capita consumption rates of electricity. Official figures estimate that around 70% of energy is consumed by air conditioning units, placing a heavy burden on the country’s electricity supply. The country is planning five mega cities to accommodate a growing population, which will make further demands on energy.

The rationale behind the event, therefore, was not difficult to ascertain. Apparently, Kuwait is now ready to place its faith in district cooling, which at least theoretically, comes with a list of advantages: lower cost, lower maintenance, enhanced efficiency and reliability, space saving, flexibility of air conditioning load and longer plant life.

Though Kuwait pioneered water-cooled chillers in the 1960s, it is a relatively new and a late entrant to the DC club in the region. Therefore, though the country has a strategic plan to invest in district cooling in a big way, it has been experiencing teething trouble. As both the cause and effect of it, the sector is still unregulated, and needs a well-defined structure and legislation in place before ushering in a regime of district cooling as a viable investment model. Raising awareness among decision makers and end-users are other main challenges.

It was under the shadow of these challenges that the Kuwait District Cooling Summit was held. However, it was evident from the papers presented that the Summit had inscribed for itself a wider arc. Its scope extended beyond Kuwait’s district cooling sector and its challenges, and included the region and the world, as it also sought to learn from global case studies. As events like these generally tend to be, it was also a forum for senior-level decision makers, engineers, project managers and regional and international experts to discuss the latest technologies, best practices and cost and sustainability dividends of district cooling.

Though the dividing line was blurred, the presentations roughly fell under two rubrics: conceptual/ideological and technical, one overlapping the other. Benefits and challenges of the sector were the recurrent undercurrents of the presentations.

This was reflected in the presentation by Abdulhamid Al Mansour, CEO, Saudi Tabreed. It was titled, ‘Challenges facing the district cooling industry in the Arabian Gulf countries’. Mansour compared the generation of electricity in the six GCC countries and enumerated the following concerns, which were, by and large, echoed by other presenters:

  • Meeting air conditioning demand
  • Escalated electricity peak demand – summer/winter power fluctuation
  • Low electricity tariff
  • Cooling water shortage
  • Environmental concerns
  • Lack of air conditioning legislations
  • Poor management of existing systems
  • New civic structure expansions
  • Increasing local fuel demand

At the crux of Al Mansour’s presentation was the question: How can district cooling mitigate these challenges? His gaze was also on optimisation of benefits of district cooling – increasing energy efficiency and reducing environmental emissions, including air pollution, greenhouse gas (GHG), carbon dioxide (CO2) and ozone‐destroying refrigerants.

He highlighted the fact that most Middle Eastern governments are parties to the United Nations Framework Convention on Climate Change. With most countries in the region having extremely high GHG emissions per capita, he argued that the issue would become increasingly important in the context of government policy making. Affirming that district cooling could reduce annual CO2 emissions by about one tonne for every tonne of district cooling refrigeration demand served, he listed a few of the provider responsibilities:

  • Investment in capital to build plant and infrastructure
  • Managing design construction of facilities
  • Looking into customers’ requirements
  • Providing specialised operators and technicians to monitor and maintain equipment and ensuring 24-hour service
  • Back‐up system that allows uninterrupted routine upkeep and repair
  • Assuming all risks
  • Illustrating a proven track record

To sum up, Al Mansour’s presentation explained why district cooling was environmentally friendly and how its benefits could be optimised.

In his presentation, titled ‘Prospective of district cooling for residential sector in Kuwait’, Prof Abdullatif Ben-Nakhi, Department of Power and Refrigeration, College of Technological Studies, Kuwait, focused on the current status of district cooling in Kuwait. Apart from highlighting the benefits of district cooling, his presentation touched upon the HVAC market for residential buildings in Kuwait. But the main thrust of his argument was the need for district cooling in residential suburbs in Kuwait (RSK). He examined its feasibility, barriers in implementing it and suggestions to overcome them.

Ben-Nakhi pointed out that no district cooling system had been installed as a public utility system in Kuwait. This was because it required community support and political backup. Saying that those involved in district cooling could be grouped into building owners, the municipality, and the society at large, he cited resistance and ignorance as the main obstacles for implementing it on a large scale. He listed other barriers under the following categories:

Barriers related to non-governmental district cooling investors for RSK:

  • Starting district cooling for RSK is risky
  • Long payback period – exceeding 10 years
  • No political support
  • No legislation for the district cooling market (for example, protecting the investor)
  • Overall billing and collection of several and different types of customers
  • Requires access to municipal property
  • Resistance from unitary AC (installation and maintenance) companies

Barriers related to the government:

  • Absence of political support
  • No formal district cooling -related strategy
  • No policy supporting the district cooling industry

Barriers related to the community:

  • Fear of inefficiency due to misuse by other linked users
  • Lack of trust in the charging and billing processes
  • Ignorance of service quality control mechanisms
  • Fear of monopoly in an essential service sector

Ben-Nakhi suggested the following solutions:

The government should initiate:

  • District cooling boost in RSK
  • District cooling-supportive policies
  • Incentives for district cooling users
  • Reduced financing costs for district cooling investors
  • Cheap rental for district cooling plant rooms
  • Introduction of off-peak electricity rates
  • Legislate the district cooling market:
  • Protect participants
  • Control cost and quality
  • Design and build district cooling piping network and infrastructure free for the community
  • Sponsor further application-oriented studies

Ben-Nakhi’s final appeal was, “Let’s take this chance! Let’s start now!”

Anand K Rohatgi of Synergy Consulting, in his presentation, ‘Why district cooling under BOT/BOO structure may not be for private sector off-takers: learning from Dhahran district cooling project (a case study)’, examined the subject from a financial angle.

Delineating on the economic motivational factors of a district cooling scheme, he listed the following:

  • Highly profitable from a national economy perspective
  • Lower initial and recurrent operating costs for the district cooling plant operator
  • Smart energy technology and economically efficient utility service
  • Reliability in excess of 99.7%
  • Improvement in carbon footprint for the economy
  • Smooth load distribution – lower cumulative capacity requirements
  • Presents attractive value propositions to building owners in terms of space
  • Lower cooling costs to end-users

Rohatgi identified bankable transaction as the key factor for the success of a district cooling project. He believed that it provided a sense of comfort to lenders that debt obligations would be met within schedule, and ensured balanced recovery of all project costs, appropriate equity returns and proper risk allocation.

Rohatgi argued that district cooling was a viable solution in the long run due to better efficiency, which could be observed by comparing consumption charges and also the fact that its viability would increase with the availability of longer-term debt.

Fadhel Al Kazemi, CEO, Kazema Global Holding’s presentation went into both the generalities of the GCC context and the specifics of the ground reality in Kuwait. Titled ‘GCC countries or state-by-state draft district cooling utility acts and regulations setting fair business relations among the state, customers, developers and utility providers’, it stressed that the technicalities of district cooling as a concept needed to be co-opted by and subsumed into the larger ideological concept of Kuwait’s avowed “National Destiny and Purpose”, which would ultimately reflect the shared aspirations of the GCC countries. He believed that creating a “National Will” through a national-level initiative was important in order to implement district cooling, as part of the larger agenda.

Under the header of National Destiny and Purpose set by the leaders of the GCC countries, Al Kazemi listed some of its salient objectives:

  • To reduce electrical power demand
  • To reduce CO2 emission and domestic fossil fuel consumption
  • To increase use of alternative renewable energy in both demand side and supply side
  • To effect mass transit through trains and underground transportation to reduce the use of private vehicles
  • To transform the GCC region into one of the world’s financial centres and global hub for passenger airlines, freight airlines and marine logistics

With the above as the unified ambition, and a reminder that all GCC countries have ratified the Kyoto Protocol and signed the Montreal and Copenhagen Protocols, Al Kazemi believed that a common agenda agreed upon by ministries within each GCC state would make district cooling a more viable proposition.

Mohammad Abusaa of ADC Energy Systems made a presentation on behalf of Fadi Hashem, Engineering Manager and Co-founder, DC PRO Engineering, on the topic, ‘District cooling in Kuwait – environmental footprint comparison (IEA)’, which highlighted the electric power stations and power demand data in Kuwait vis-à-vis the impact of district cooling on overall government infrastructure costs, on carbon emissions and elaborated on the benefits of implementing district cooling in Kuwait.

Reiterating that the GCC countries have one of the highest environmental footprints per capita in the world in terms of peak electric load/capita, carbon emissions/capita and annual power consumption/capita, Abusaa said that with the global move to reduce carbon emissions and preserve the environment, and with the power failures and crises in Kuwait occurring since the summer of 2006, it was essential to adopt energy-efficient and environmentally friendly solutions, like district cooling, to meet the future expected growth in the country.

Emphasising on the fact that 60 to 70% of building peak electricity load and over 50% of the building annual energy in the GCC is consumed by air conditioning equipment, Abusaa, articulating Hashem’s presentation, said that district cooling, along with better building designs, could play a vital role in curbing power consumption related to air conditioning, and could offer numerous technical, commercial and environmental benefits to the government and end-users.

Armed with key data about district cooling and sustainability in the GCC countries and in Kuwait, he claimed that switching to district cooling would give Kuwait an additional estimated peak cooling load growth of 1,200,000 TR in the next three years, with an estimated actual load of ~890,000 tonnes. Highlighting the advantage of Thermal Energy Storage (TES), he stressed that the electric demand for 1,200,000 TR was 919 MW for district cooling with TES tank, as compared to 2,233 MW with traditional air-cooled systems. The inference, Abusaa said, was that district cooling and thermal storage would yield rich dividends in the long run.

Georges Hoeterickx of Evapco Europe, in his technical paper, ‘Cooling towers for district cooling design considerations’, looked at the issue of cooling tower size versus approach, the difference between cooling tower water outlet temperature and design entering wet bulb temperature and the difference between cooling tower water inlet and cooling tower outlet temperature. He advised against recirculation, as the bypass of warm discharge air into the cooling tower air inlet would cause capacity losses.

Taking the issue further, Jeevan Joy from Spig and Hisham Hajaj, Project Principal, Stanley Consultant Group, examined the implications of using sea water for cooling towers. Joy’s presentation was titled, ‘Application of field-erected cooling towers in district cooling’, while Hajaj spoke about utilising sea water cooling towers for district cooling.

Joy argued that using sea water in cooling towers was technically and economically feasible, and cited its merits:

  • Sea water cooling towers can satisfy cooling needs of petrochemical industries
  • No significant O&M complications with seawater cooling towers have been reported
  • Economics are favourable compared with the once-through system

Hajaj cited other added advantages: Durability, easy maintenance and control, energy conservation, obviating scarcity of water resources, heat rejection from industries dissipating back into the sea, plume forming far away from the ground level, low emissions in case of salt water, no restrictions for tower sitting within the site, unbiased to wind direction, thus no issue of tower orientation, and less piping, as there is a short distance to the process plant.

That it was suitable only for low-rise buildings, had limitations of geographical location and delivery system and issue of discharge seawater temperature were the disadvantages Hajaj listed. His presentation concluded with the case study of sea water cooling towers of Jubail Industrial City, Saudi Arabia.

Jarmo J Heikkinen, General Manager, Kamstrup Middle East, in his presentation, ‘Cooling energy (BTU) metering’, made a case for individual metering. Despite resistance to it in some pockets of the sector, he believed that the following merits overrode the concerns:

  • Saves money and energy – 30% less energy consumption, according to experience in Europe
  • Enables effective meter reading with minimum personnel
  • Enables fair billing
  • Exact monthly reading provides accurate statistics
  • Detects failures in the cooling system – leakages of water, energy or low delta T indication

Based on studies in the UAE of end-users, Heikkinen claimed that they preferred individual metering, as it increased consumer confidence. Also, actual consumption data would provide valuable feedback, which could be used for design recommendations.

Magdi Rashad, General Manager, S&T Cool (Sorouh & Tabreed District Cooling Company), gave Tabreed’s perspective on district cooling in his presentation and touched upon challenges facing Kuwait and how to overcome them, reiterating points raised by others.

While Roger Baroudi of SSHI, in his presentation, ‘District cooling designing for life power and cost saving’, dealt mainly with case studies like the Kuwait University Cooling Towers, Soren Kjaer of Perma Pipe focused on understanding international standards for pre-insulated piping for district cooling piping networks.

Tim Burbury, Partner, King & Spalding LLP, in his presentation, drew attention to an area that has not received much attention: ‘District cooling projects: legal and commercial issues and their solutions’. Asking what legal structures were being used in the sector, he looked at commercial and legal issues, like regulation, stakeholder concerns, billing and collection, project phasing – phasing of capacity and temporary chilling/heating construction, reticulation network/centralised plant interconnection, O&M, bankability, water source, end-user demand and off-take guarantees.

It was Yaqoub Almatouq, Head of Refrigeration Team, Ministry of Social Affairs & Labour, Kuwait, who finally gave a comprehensive perspective on the subject, viewed through a technical, environmental and ideological prism, in his presentation: ‘District cooling: environmentally strategic option’. He not only outlined the advantages and potential role of district cooling, but also squarely addressed implementation-related concerns, such as:

  • Costs: initial and running
  • Durability: longevity components compared to conventional AC systems
  • Reliability: capability to provide the required cooling capacity
  • Serviceability: repair period in case of malfunctions
  • Expandability: cost of more cooling due to building expansion – for example, plant and piping network, capacity improvement
  • Technical support: professionalism of district cooling operators and technicians
  • Validity of design: sizing, selection, integration of the components with the buildings they will serve
  • Monopoly of district cooling service: can the end-user select/change between different providers of district cooling?
  • How and who will control the cost of service?

Despite all the misgivings, quoting Alan Kay, Almatouq concluded: “The only way you can predict the future is to build it.” This, perhaps, signalled that the time had come for Kuwait and the region to sidestep interminable debates and discussions about the pros and cons of district cooling, and give it a fair chance. However, who will bear the moral onus and cost, if it does not live up to its promise, is not exactly a rhetoric question.


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