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The obsessions with LDT

In this – the last installment of the post-event report on the third edition of The Client, Consultant, Contractor Conference, organised by CPI Industry on September 30, 2019 in Dubai – Climate Control Middle East shares key points from a panel discussion on causes behind the Low Delta T Syndrome in district cooling developments and how penalties imposed in contracts serve as a bottleneck in the adoption of district cooling…

| | Jan 21, 2020 | 9:46 am
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From my 25 years of experience in the UAE, I have noticed a huge difference in the way buildings are being designed and operated, which has contributed to having this Low Delta T Syndrome,” said Fares Ahmad, General Manager, Emaar District Cooling, as he dove straight into the heart of the matter during the third edition of The Client, Consultant, Contractor Conference, on September 30, 2019 in Dubai.

Ahmad emphasised that the issue of Low Delta T starts at the design stage, sharing his observations not only as a representative of a district cooling provider, but also gleaning from the various roles he played within the industry as a consultant, manufacturer, contractor, client representative, project manager, strategic adviser and risk manager. “It’s about doing the right heat-load calculations, the selection of the contractor and consultant, the selection of the right equipment and having the right budget to select the right equipment,” he said.

District cooling companies, Ahmad pointed out, are essentially tasked with providing chilled water flow, in line with the design capacity of the building, as calculated by the consultant, and within a certain supply and return temperature. “If a building, and the load, has not been designed and considered in the right way, the building can be overdesigned,” he said. “And we know most buildings in the region have the problem of overdesign.” Such systems require a higher flow, he said, adding that it also means that building owners are not able to control the return temperature from their assets, such as the heat exchanger and ETS room. “That will create a problem for the district cooling provider,” Ahmad said. “It will force him to run the chillers and the pumps in the district cooling plant for a longer period of time. It means the plant will not be running at the highest efficiency profile it’s designed and selected for. Then, the district cooling provider will be paying more money for the electricity and water required to run the district cooling plant.” Ahmad said he has seen buildings overdesigned by up to 40%, wherein consultants are applying for 1,500 tonnes of cooling for a building that requires only 1,000 tonnes.

Providing a perspective on the challenges facing consultants in this regard, Mansour Kharoub, Associate Principal – Mech Engineering Services, Khatib & Alami, said that while he agrees with the statement that many projects suffer from being overdesigned, from his own experience as a designer, over design can and should be avoided by approaching the project in two different ways, taking into consideration peak time load selection for individual units and plant load selection for the whole project considering certain diversities. “The peak time load, here, contributes to only one per cent of the building’s operation over the year, but I have to comply with this for individual spaces/units,” he said. “Definitely, I cannot compromise on the size of the unit, so I base my selection for the unit on the peak load scenario. Coming to the final connected load for the project as a whole, we start to apply measured diversities that would reduce the plant load and ensure proper cooling for the project all year around. This plant load is what we request from the district cooling provider.
Unfortunately, we have experience with some of the district cooling providers where we say ‘Okay, this is our plant load and what we require for the building,’ yet when we want to sign the contract, they say, ‘No, we will provide you the load as per the summation of you equipment units’ selections which raises up the figure tremendously. This means that our client would have to sign for more cooling than what we requested, which we as consultants refuse, and this leads to some hard negotiations with the DC providers. These are some of the practices in the market that also contribute to the Delta T.”

Sougata Nandi, CEO, 3e Advisory, pointed out that the prevalence of overdesigning for capacity persists despite the fact that buildings are being constructed according to standards and guidelines. Commenting on this, Asim A Hashmi, Sales Director – Applied, S.K.M Air Conditioning LLC, said that it is important for stakeholders to remember that each building, and each project, is different and may have issues that is not under the scope of the existing guideline, and which may impact its design. “You can design a building and its equipment based on the guidelines, but because of the tactical issue – and the fact that proper balancing has not been done – you will have issues on the performance of the building and equipment, as well. Balancing is key.”

Kharoub weighed in to highlight the important role that testing and commissioning play in building performance. “When it comes to testing and commissioning, in most of the projects here, the occupants enter the building before it is done,” he said. “After that, they test without the system being properly balanced. The FM’s here role becomes corrective rather than preventive.”

Nandi said that this underscores the importance of a more dynamic operation of chilled water systems inside the building to match Delta T requirements, emphasising that the proper balancing of chilled water and air distribution in buildings is not a “one time exercise”. “You have testing and commissioning and then handover, but buildings keep changing all the time,” he said. “A dominant practice here is open plan offices. Today, one company occupies one floor, then later the same floor could be leased to five different companies. Office lots keep changing, and then the HVAC system becomes imbalanced.”

Nandi said that in addition to the technical issues affecting the Delta T, a number of the issues are also commercial and contractual in nature. Reflecting on this, he asked, “Considering a building won’t need the peak load for more than approximately one per cent of the time, which can be addressed by precooling and other solutions, would it be possible to sign a contract for 900 tonnes instead of 1,000 tonnes peak time, which will not be crossed for the most part throughout the operations?”

Ahmad answered by pointing out that the service agreement of district cooling providers, which is governed by the master developer, is defined by the peak load design. “That is the specified load the contract will be based on,” he said. Ahmad also emphasised that district cooling providers do not charge consumption based on peak load. “Consumption is the actual consumption of chilled water that you consume minute per minute, per hour,” he said. “The issue here is that the Delta T is not only driven by the maximum or peak load, it is driven by the difference between the actual load you require at a certain particular moment, and the load you are taking, which is more than the actual load. It means you are striving
for more flow, and more flow means more energy, so you are consuming more energy and you are consuming it in a manner where you don’t need it, and still you are not crossing the peak load, assuming the peak load is 1,000. During winter, you are not going to reach 1,000 tonnes, you are only taking 300 or 400 tonnes, but what you are actually consuming is like 600-700 tonnes, because the system is not balanced, the selection of equipment is not right, the diversity you have is not correct, you have certain bypasses, you are not doing proper maintenance for strainers and filters and you do not control the thermostat. All of these can contribute to the building striving for more flow that required, that’s creating the problem.” Ahmad added that when stakeholders take into consideration the percentage of the impact of low Delta T across the unit, often, it is happening when the unit is not reaching peak load.

A LEGAL PERSPECTIVE

Touching on the issue of penalties associated with Low Delta T in district cooling service agreements, Ahmad said that contracts vary from one district cooling provider to another, and from one contract to another. “We are not here to make money out of penalising people,” he said. “As Emaar District Cooling, it’s not our intention to charge people. Yes, we are sometimes applying Delta T, but we are more trying to be gentle with the clients at the end of the day and looking at giving a customer experience that will help keep customers with us.” Ahmad said that the company has been proactively incentivising different building owners, investors and developers by presenting the benefits of investing in energy￾saving measures. “We say, ‘You are paying AED 1 million penalty, regardless of mechanism, on a yearly basis because of having low Delta T issues, why not do a lifecycle analysis. If you can do some modification that could cost around AED 200,000, or even [implement a] change in operation to help them avoid Low Delta T, it will be worth it.’ We use it as a mechanism to encourage stakeholders to protect their own interest and, at the same time, protect interest of the district cooling provider from paying hefty penalties to DEWA for using electricity and water.” Ahmad said that as Emaar District Cooling, the company has been engaged with direct technical and commercial discussions with building owners, operators and
facility managers to control the building after identifying the problem behind the Low Delta T Syndrome.

Providing a legal perspective on penalties associated with contracts was Euan Lloyd, Senior Counsel, Al Tamimi & Company, who said that overall, the industry should take a closer look at how contracts are drafted. “You do get penalty clauses in contracts, but there are alternative ways to try to incentivise providers to perform,” he said. Lloyd added that based on his general observations on district cooling contracts circulating the market, he believes that in many ways the typical contract has not kept up with the pace of the market and its advancements. “District cooling contracts can be in a fairly basic form and do not always reflect the complexities and nuances of the commercial agreement,” he said. “The pricing mechanism tends to be rigid for a significant amount of time, sometimes up to 25 years, and this prevents efficiencies, which typically develop over time, from being passed to the end user. Contracts in the market don’t always acknowledge this, so I think rather than having fixed tariff for a fairly long period of time, it makes sense to have benchmarking procedures in contracts so prices paid correspond to efficiencies.” Another issue, he said, is reliance on the FIDIC format in most contracts.

Lloyd also pointed out that, as district cooling is becoming more and more prevalent in Dubai, following government support to increase penetration by 2030, there is obvious scope for the industry to move towards a fairly standard form of district cooling contract addressing these issues that can be implemented to provide standardisation to the industry.


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