Do you believe there is a need for change in the way the GCC region approaches District Cooling?

Absolutely, we simply cannot continue the way it’s been going on. There are many occasions where a tenant or a developer is shying away from District Cooling because of what has been happening in the past 10 years. People tend to forget about the benefits of District Cooling and think, ‘If charges are going to be high, I would rather be better of without District Cooling; it costs me less if I have my own AC.’ I’ve seen it many times, and I’ve heard it many times, and it’s happening because of the high charges and the penalties. These charges are making District Cooling a burden rather than something to help everybody save on electricity and help the environment, and so, that has to change.
There are many ways to lower the costs. We have done many financial models and raised the point that, optimally, you need only one charge, which is the consumption charge, similar to electricity charges.

Not even the capacity charge?

Not even the capacity charge. The consumer thinks, if I’m using my AC, I will pay for it and if I switch it off then I shouldn’t. Just like with electricity. If you switch on the light, you pay for it; if you don’t, you don’t pay for it. We need to find a way of eliminating the capacity charge from the District Cooling part. There are many ways of doing so. Yes, you need to recover your capex cost, the installation cost, but if you look at the actual cost of the District cooling scheme, including the piping network, it’s a small percentage of the total development, right? And in the case of the piping network for example, it ought to be part of the infrastructure cost.

Fouad Younan

Along with the other utilities?

Yes, exactly! Why are we making the customer pay for the piping network? The piping network alone can reduce the demand charge considerably. And if you want to eliminate it completely, you can do so, for example, by slightly increasing the price of the land in the beginning and putting the price of the capital cost required for the plantroom as part of the square metre or square foot, be it the land or the property itself. We found that it is a small percentage of the price of the total actual property. There are many ways to work from that perspective, to at least reduce the capacity charge. I believe it has to be either reduced or eliminated. Another area that we need to look into is the electricity utility, and what it is charging District Cooling companies. Simultaneously, we have to do something on our own, which means finding another source of energy. Of course, solar is always the easiest and cheapest way of producing electricity. Integrating solar with District Cooling is a must. Gas is another area. Trigeneration should be an area of focus, if you want to reduce the consumption of primary energy. This is something we have designed and implemented at DC PRO, so it is not wishful thinking. Even if gas is not available, we have done trigeneration with diesel and integrated it with solar as much as is possible, in order to save 60-70% on primary energy. We cannot ignore these new technologies for use in District Cooling. The cost of living is so high, the economy is going through a challenging time, so alternative approaches cannot be ignored. We need to optimise costs. The point is, 10 years ago I used to say District Cooling is not an option, it is a necessity. Now we’re saying, trigeneration is not an option anymore, it is a necessity.

Provided, it’s done properly. 

Of course. From an energy point of view, a standard District Cooling project 10 years ago could save 40% of energy compared to standard air-cooled systems. Today, when we can save up to 80% on primary energy with different means, it’s more of a necessity. The new technologies that are available should not be an option for people anymore. The government has to join hands with us and move forward.

Let’s focus on Delta T. Is there a way out of the morass?

We are already charging on everything else – on demand, capacity, consumption, connection. You cannot add more layers to these charges. Now, Delta T is another problem, but we have to note that not all the service providers are forcing Low Delta T penalties. Low Delta T causes problems not only for the consumer but also for the District Cooling service provider. So, it’s a win-win situation if you solve the issue. Low Delta T also means your plant efficiency suffers a lot. The service provider has to pay for the extra power consumption, the consumer pays penalties, and the pumping at the consumer side increases, so that’s another extra hidden cost the consumer doesn’t know about. Low Delta T Syndrome is something that has been ignored, and everybody is suffering from it, because it hasn’t been taken care of from the beginning. The customer does not realise that the internal MEP design and controls of his building has to be synchronised with District Cooling applications, and that is one of the main causes of the Low Delta T Syndrome.

Which brings into focus the need for specialised MEP consultants and MEP contractors to be involved in the project, correct? 

Time and again, we have also seen instances relating to improper hydraulic balancing in District Cooling
schemes, where the problem is not necessarily with the equipment but with how they are installed.
Absolutely! It starts, like I said, with the design. The first problem is your load calculations. I can give you so many examples. Recently, a big development signed a contract with a service provider for 15,000 tonnes of refrigeration. They asked us to redo the load calculation, and that is when we found out that the actual need at even peak conditions was only 7,500 tonnes.

Which brings us to the lingering issue of idle capacity.

According to an estimate by DC PRO Engineering, in Dubai, you have over 3.3 million tonnes of planned capacities and over two million tonnes of installed and sold capacity. The actual peak is estimated a little more than half the installed capacity, so the rest is sitting idle. With all the installed and planned capacities if, hypothetically, we have a common piping network that connects all the service providers and all the District Cooling plants together, we at DC PRO anticipate that you would not need one extra tonne of cooling probably for the next 25 years.

Surendar Balakrishnan is the Editor of Climate Control Middle East magazine, and Co-Founder and Editorial Director of CPI Industry. He may be contacted at surendar@cpi-industry.com