“We are simply dreaming if we don’t include District Cooling in the list of strategies to achieve carbon neutrality.” That was George Berbari – CEO, DC PRO Engineering, and District Cooling pioneer in the UAE – driving home the mission-critical importance of the sector, during the 6th edition of DC Dialogue, on October 27, in Dubai.
Berbari was chairperson of the conference, who whilst giving the opening remarks, pointed out that since his first District Cooling project, in 1995, the energy sector has moved from fossil fuel to solar, and from there, to hydrogen as a source of fuel. The District Cooling sector, he chillingly added, had failed to keep pace and has remained stagnant, in terms of innovations that matter. “There have only been a few innovations that have been adopted that can possibly redefine the sector,” he said, adding that at a time when it ought to have been more robust than ever, has been caught in a quicksand of issues, including providers incurring losses, end-users continuing to pay higher tariffs and technological advancements progressing at a snail’s pace.
“The Gulf countries have committed to ambitious climate targets, but achieving them within the planned timeline means that 80% of cities should be served by District Cooling, and the chillers need to be powered by renewable energy,” Berbari further said. “Unfortunately, today, District Cooling systems only provide 40% efficiency and consume almost 50% of the energy. On top of that, the construction sector has seen 17 consolidations since 2004, with 10 of them happening in the last two years; this has cut the District Cooling supply chain considerably, with many District Cooling providers requesting liquidation. There is an imminent need to redesign pricing, so it is profitable for providers and affordable for the end users.”
Whilst Berbari’s views pointed to a feeling that the District Cooling sector in the region has been a partial failure, Graeme Sims, Executive Director of the Regulatory & Supervisory Bureau for Water & Electricity (Dubai RSB), asserted that the future looks promising, as investment is not an issue and that customers have expressed interest in wanting to adopt District Cooling for their projects. Sims was speaking as part of his presentation, which delved into the upcoming regulations, wherein he also noted that the RSB’s current focus is on consumer protection. “Some of the early issues that the industry faced, like the lack of facilities to store water and alternative energy generation, do not exist anymore,” Sims said. “Today, we (DEWA) have already achieved up to 30% energy savings through District Cooling. However, it was not done without setbacks – the reluctance of developers to adopt District Cooling, thinking they won’t be able to make a profit, and having effective regulations have been the challenge.”
Sims said there have been many favourable developments, with the Dubai Supreme Council of Energy reconsidering tariffs for companies coming up with innovations. Sims said the RSB is also working on standardising District Cooling project contracts, so that developers, District Cooling providers and customers may all benefit.
However, Dominic Mc Polin, Advisor, Office of The Minister, Bahrain Ministry of Works, pointed out that “what we have so far are just plans”. The path ahead, he said, is riddled with complexities. Many countries have announced zero-carbon emissions and deadlines, he said. For example, the United States has a 100% clean energy target by 2035, whilst Saudi Arabia aims to have 50% of its energy from renewables. “Achieving net-zero buildings by 2050 will require all countries to quadruple energy-efficiency efforts,” Mc Polin said. “Companies focus more on getting ESG credibility than putting in impactful sustainability efforts. We have done it again. The global ESG funds and targets are increasing, and so is the Earth’s temperature. By 2021, more than 400 climate-related equity funds were created to address climate change and ecological and technological innovations to attract conscious investors. However, an S&P study found that 89% of global funds are on a trajectory to overshoot a 1.5-degree temperature rise.”
Mc Polin said that sadly, most funds rely on sustainability language to attract investment as the industry sits back, waiting for a change.
Hassan Younes, Co-CEO & Co-Founder, GRFN, going into granular details on technological aspects of District Cooling, said that most inefficient District Cooling plants (DCPs) have similar issues, such as sizeable number of constant-speed-drive centrifugal chillers, fouling, higher approach temperatures and water treatment issues, as well as lack of tracking of data or reporting. “Most of these DCPs have reactive maintenance and manual control of the plant,” he said. “But today, we are addressing these issues with technology and creating awareness among owners. Best-in-class DCPs have real-time measurement and dashboard reporting, as well as fault analysis that assesses predictive maintenance, making the systems efficient. We are evolving from our role as infrastructure developers to collect data and update new requirements and coordinate with other stakeholders and regulators to work for a better future.”
Samer Abusaa, CEO, Saudi Tabreed District Cooling Company, after patiently listening to the convergent and divergent viewpoints, gave a District Cooling utility company perspective. He said the first step towards mitigating the impact of District Cooling systems is to utilise alternative energy resources, as their consumption is very high. “The Saudi government is investing in renewables to power District Cooling systems, as protecting natural resources and emission reduction should go hand in hand to be effective,” he said. “However, the financial models need to be relooked at for District Cooling services to be profitable for the providers and affordable for the end-users.”
All said, Abusaa agreed that slow innovation and the lazy attitude towards change needs to change. Voicing a similar opinion, Khalid A Al Mulhim, Business Development Director, Suhaimi Design – Protecooling, Saudi Arabia, said that monopoly is killing the District Cooling sector. From over 11 players in the initial years, District Cooling companies have shrunk to three he said. “The industry lacks knowledge sharing, with companies doing what they know best, ignorant about the latest innovations,” he said. “Open communication, data sharing, and training future generations will bring in true difference.”
Eid Mohammed, at the UAE Ministry of Energy and Infrastructure, called for more collaboration between regulators and District Cooling players. “We hope to share the responsibility in reinforcing the District Cooling sector in the UAE,” he said. “With regulations still being amended and improvised, we would like to receive the data and inputs from the industry so we can meet the industry’s requirements.”
Speaking on the way forward, Alejandro Subiza, Country Manager, Araner, said the industry needs to ensure not to repeat past mistakes, through seeking recourse to data and monitoring. “We will be able to plan the design and size of District Cooling plants to meet consumption without wasting capacity,” he said. “Secondly, we need to find a way to use the existing capacity. The fact that the market is becoming tough means that the industry is becoming increasingly mature.”