A clear strategy on water slakes concerns about district cooling in the Kingdom

Delegates at The Climate Control Conference (C3) in Riyadh heard with relief that some of the key players in Saudi Arabia are doing district cooling right, be it in terms of water, power or financing. They also listened to the possibility of diverting cooling loads from residential to power plants and other industrial applications. Further, they responded to insights on refrigeration and ventilation.

The three-day conference, from March 14 to 16, was quite comprehensive in nature, including as it did almost all aspects of HVACR. It was a first for the Kingdom and, in that context, well received.

Day 1 focused on district cooling, with two clearly divided sessions. The morning session focused on the opportunities and challenges for district cooling in the Kingdom, whereas the afternoon session largely focused on what the rest of the GCC has to offer in terms of experience, expertise and refrain, borne out of over a decade of doing district cooling.

A standout feature of the morning session was that delegates got a localised flavour of Riyadh. The city’s King Saud University was a major point of focus in the 1970s when it established a central cooling plant. Using centrifugal chillers, it was able to achieve 1kW/TR, which was lauded as a technological advance and as something quite energy efficient. Equally significant, it used TSE, though it started off with using freshwater. Nevertheless, over the years, it has toted up the longest operating experience with TSE, something that its installers, the US Corps of Engineers, can be quite proud of. People at the conference listened with interest as Dr Zeyad A Al Suhaibani, Assistant Professor (Engineering Department) at the university took them through the profile of the district cooling regimen. They were particularly interested in hearing about the successful and sustained use of TSE from the 1970s, considering that the UAE has been using the source of water only from 2004 onwards.

While Saudi Arabia has had experience with central cooling plants for a long time, it is only in the recent past that it has adopted district cooling as a business model. The credit for being a pioneer goes to Saudi Tabreed, whose CEO, Abdul Hamid Al Mansour, shared his views on the initial days of doing district cooling. In his presentation, Al Mansour spoke of the tremendous challenges the company had to overcome, including the slab rate and also the cost of land for the plant rooms. He cited as examples the plant rooms in Jeddah and Madinah, where the plots of land cost the company SR100 million. His presentation brought home the message that the Government needs to support district cooling companies for the model to be financially viable.

Hisham Hajaj of Stanley Consultants was another key speaker. In his presentation, he highlighted the importance of the availability of water for district cooling to be successful in the Kingdom. Stanley Consultants is involved in the Pension and Retirement Fund projects in the country, in the forms of two plant rooms in King Abdullah Financial District (KAFD) (capacity 100,000 TR) and the Information Technology and Communication Complex (ITCC) (30,000 TR). Hajaj spoke of how the decision makers at the Retirement Fund eventually gave the go-ahead to the project, after they were assured that the plants would use only TSE, following a signing of a contract with the National Water Company (NWC), and not freshwater. His presentation was an eye-opener to delegates that largely speaking, developers in Saudi Arabia will pursue district cooling only if a sustainable water source is available.

In a subsequent panel discussion, titled ‘The challenges and opportunities for district cooling utilities in Saudi Arabia’, Nasser H Al Aamry of NWC elaborated on TSE. In fact, Al Aamry brought a fresh air to the proceedings by saying that NWC is committed to bringing TSE to district cooling regimens in six cities, to start with, in the Kingdom and, later, to 15 cities. The six cities are Makkah, Madinah, Jeddah, Riyadh, Dammam and Al Khobar.

Later, while making a presentation, Al Aamry went on to say that NWC had started with a SR 20 billion capital and that the company is looking to bring in several external investors in other cities, with NWC as the main shareholder. The intention, he said, is to bring foreign investors to handle privatisation of water and wastewater, in terms of collection and distribution. NWC, Al Aamry added, is willing to invest $20 billion over the next 10 years to boost the water infrastructure. This news was received with abundant relief by the district cooling industry. Battered as it is by the financial downturn and the rather sharp decline in the number of projects in Dubai, till recently regarded as the epicentre of district cooling in the region, Al Aamry’s words gave plenty of optimism to the delegates.

NWC will be supporting KAFD with 22,000 m3/ day of TSE and ITCC with 5,500 m3/day. Further, it has earmarked 10,000 m3/day for Ma’aden and 700,000- 800,000 m3/day for Riyadh alone, with irrigation schemes and industries as the beneficiaries.

Al Aamry’s co-panellist in the discussion on challenges and opportunities for district cooling in Saudi Arabia was Salah Abdulaziz Al Afaliq of National Trigeneration CHP, who has championed the trigeneration concept in industrial cities in the Kingdom. During the discussion, Al Afaliq spoke on how he is generating power, steam and chilled water for a select set of industries, including plastics and food processing. Another panellist was Abdullah Mohammad Al Jardan of City Cool Saudi Arabia, who spoke at length on the experience and difficulty in King Abdullah Economic City, where Emaar, he said, could not commit to an off-take in district cooling.

In a second panel discussion on the Saudi perspective, titled ‘Construction challenges and materials and supplies’, Albert Haykal of Trane spoke on the big advantages of water-cooled chillers in Riyadh, where due to dry conditions, the cooling tower would supply 80ºF water compared to 93-95ºF in the UAE. This, Haykal said, means an ability to select chillers at 0.56kW/TR compared to 0.7kW/TR in the UAE. Considering the fact that Riyadh is the driest, Haykal said, a water-cooled system is advantageous, and the gap (the demand for water) is filled by TSE, offered by NWC. His co-panellist, Mohamed R Zackariah of Protecooling (Suhaimi Design) concurred on the benefits of the watercooled system in Riyadh.

Haykal’s another co-panellist, Mohammad Abusaa of ADC Energy Systems spoke of the difficulties for contractors when he said that the Saudi labour law makes it difficult to get labour on time. “After signing a contract, it takes three to six months to get labour visas,” Abusaa said. Construction costs and materials are slightly high compared to the UAE, but the cost of living is low, Abusaa added. His co-panellists, Robert Geday of SNC Lavalin and Abdullah Zeneeh of Rio Electromechanical concurred with him.

In the afternoon session, George Berbari of DC Pro Engineering started off the GCC perspective on district cooling when he spoke on lessons learned from executing projects in the UAE. In his presentation, he focused on the phenomenon of over-building in the UAE. “One million was installed, and less than 500,000 was utilised,” Berbari said, adding that people simply did not manage their companies properly to match their financial projections. The news of Tabreed posting a huge loss was a bold move to acknowledge past mistakes, Berbari said.

After Berbari, Geday of SNC Lavalin elaborated on the extensive experience of the company, evidenced by the facts that it has installed over 680,000 TR (35 district cooling plants) all over the UAE. And Antoine Stephan of Hamon CTC described how the company has been cooling well water in Riyadh for over 30 years. In the course of his presentation, Stephan explained how the cooling tower capacity is derated at low wet bulb temperature. In other words, Stephan said, in Riyadh, there is a need to design for a larger approach, for example 10ºF or higher, compared to 6ºF, to compensate for derating of cooling towers.

The afternoon perspectives culminated in a panel discussion during which the finance side of district cooling came into focus. Mansoor Durrani of National Commercial Bank, Saudi Arabia; Khalil Issa of Energy Central, Bahrain; Mohammad Abusaa and Jardan were the panelists. Durrani revealed how banks were still interested in financing district cooling projects, provided there is strong offtake agreement with reputable end-users or developers, such as governmental or semigovernmental entities. Issa picked up the cue when he said that district cooling providers are still interested in investing cover story in projects, but they need to do a higher level of due diligence. “Provided there is strong offtake, they are willing to consider these projects,” Issa said.

District cooling companies will avoid investing in piping, Issa added. The developer ought to do that against a transmission fee, Jardan said. Abusaa gave the contractor perspective. He said that in the new paradigm, brought about by the downturn, contractors are being selective as to whom they would work with. Simply put, Abusaa said, contractors are looking at clients with a solid financial background.

Snapshots from the Event