George Berbari

We will see global warming and problems inflicted on the earth increase to the point that it will be too costly to deal with,” said George Berbari, CEO, DC PRO Engineering and Author of The Energy Budget. Addressing the service providers, government authorities, manufacturers, consultants, contractors and other stakeholders during the third edition of DC Dialogue on September 15, in Dubai, he emphasised that the industry needs to position itself in a way that recognises District Cooling’s vital role in broader sustainability targets. Dominic Mc Polin, Chief, Central Planning – Central Planning Office, Ministry of Works, Municipalities affairs and Urban Planning, Bahrain, agreed, pointing to the IPCC Special Report, which says, limiting global warming to 1.5 degrees C will require “unprecedented” transitions and that UNEP has identified District Energy as one of the key strategies for tackling climate change.

Dominic Mc Polin

Berbari added that District Cooling is also essential in the development of carbon-neutral cities. Presenting Denmark as an example, he highlighted the significant contribution of District Energy, complemented by renewable energy initiatives, in helping Copenhagen push towards achieving carbon neutrality by 2025. For the GCC region to also move in a positive direction, Berbari pointed out, stakeholders must address inefficiencies in the design and operation of District Cooling networks, as well as in the existing financial models, all of which serve as bottlenecks to the wider adoption of District Cooling in the region. “I was one of the pioneers of District Cooling, but I’m not proud of where we are today,” he said. “This is not my aspiration for District Cooling. We need to change, and I see the seeds of that now.”

Dr Adib Moubadder

Dr Adib Moubadder, CEO, Emicool, said that undoubtedly, District Cooling is an important pillar in the UAE’s 2050 Energy Strategy, which can also be observed in the Dubai Integrated Energy Strategy 2030 target of having 40% penetration of District Cooling, as part of Demand Side Management initiative in Dubai. However, he pointed out that there is a long road ahead, considering penetration of District Cooling today is only between 18 and 19%. “If we talk about 40%, it means we need to add more than 2.5 million of tonnage,” he said. Raed Al Ahmed, Deputy CEO, Emicool, said that in the last year, penetration of District Cooling has only increased by 0.7 %. “If the target in 2030 is to increase by 24%, that’s a number of seven per cent per annum,” he said. “We are at 0.7%. How are we to reach the 2030 target doing only tenth of what we are asking for?” Al Ahmed emphasised that the issue is a serious one, in view of urbanisation and projected increase in population, which is set to drive demand for cooling, up from 15,000 MTRh in 2018 to 22,000 MTRh by 2030.

Raed Al Ahmed

In view of the expected demand, Mc Polin stressed that there is no time for subtleties. “No doubt, all governments are committed,” he said. “There are a lot of innovations, but it’s not fast enough, it’s all too slow. We have problems with over capacity of empty buildings. We need a place to arbitrate, to share benefits and make the industry grow.” Dr Moubadder, agreeing with Mc Polin’s words, added that the success of the District Cooling model is based on a quadrant of four: the government, developer, end user and service provider. “If we manage the interest of all four on a professional platform,” he said, “we will succeed in DC.”

THE ROADMAP TOWARDS REACHING 0.77 KW/TR

Fares Ahmad

For their part, District Cooling providers said they are working towards addressing prevailing issues within their own respective plants. Fares Ahmad, General Manager, Emaar District Cooling, said a number of initiatives have been implemented in an effort to reduce excess capacity in collaboration with developers. Dr Moubadder added that he believes idle capacity in Dubai does not exceed 25% of the installed capacity among the main players in the market, following providers’ innovative efforts. “Many prestigious locations are utilising existing capacity, moving forward,” he said. “With data available to us, in five years, idle capacity will be dismissed in Dubai, and we will have around 90% utilisation of installed capacity.”

Enhancing efficiency and plant room optimisation is also something District Cooling providers said they are looking into, in the move towards the ideal figure of 0.77 kW/TR. Ismail Almarzooqi, CEO, Dubai South said such a level of efficiency is achievable. “We had plants built 12 years ago running on 1.4 kilowatt, today running on 0.95, and we still have room to improve our efficiencies,” he said, adding that a strategy that Dubai South has employed to do so is implementing mandatory review of customers’ heat load calculations before allowing them to connect to the plant. “Most of the time, people are overdesigning,” he said. “A lot of buildings sent to us with 4,000 tonnes have gone out from us 2,500 tonnes.” Almarzooqi said it is important to stop wastage at the design stage and focus on optimising the plant, taking into consideration the emerging technology geared towards optimisation enhancement, such as variable-speed drives, and control instruments to optimise water-cooled chillers.

Dr Moubadder also said he believes that 0.77 is feasible but that there are inherent challenges, considering each plant is different and has its own set of requirements. However, he said, technology, such as artificial intelligence, can play an important role in achieving the target. “We are working heavily on putting systematic approach for an AI system,” he said, sharing the company’s own technology-related initiatives. Such initiatives, he pointed out, require heavy investment and that in order for AI technology to truly be utilised in a way that will achieve such a level of efficiency would require a paradigm shift in the mindset of District Cooling companies’ board and shareholders.

Muna Al Nahdi

Muna Al Nahdi, Manager – Energy Management, South Energy, also advocated for greater flexibility, especially in the adoption of technologies, highlighting how AI and unmanned plants could pave the way for planned preventive maintenance. “We treat the DCP as a fixed asset, but technologies are advancing, be it chillers or controllers,” she said. “Optimisation doesn’t have only to be in existing plants. Don’t treat it as it is
in the next 25 years. Practices are improving, industry standards are changing, and we need to be innovative to operate plants in most optimum way.”

Nermeen Hammouda

Manufacturers and solution providers can help promote adoption of such technologies, Dr Moubadder said, by playing a more active role in sharing solutions with District Cooling providers in a way that could minimise financial risk by possibly sharing in the savings. Responding to Dr Moubadder’s words, Nermeen Hammouda, General Manager – Applied Equipment, Johnson Controls, GCC, underlined the importance of collaboration in the move to enhance efficiency. “We are not a supplier, we are a solution provider,” she said, adding that the value offered by quality manufacturers is not only in supplying the VSD or providing digital optimisation, it is in sharing technical know-how in the evaluation of the plant, in partnership with the customers to address specific requirements. As such, she said, the client, owner and District Cooling provider would benefit from working hand in hand with equipment suppliers in all steps of the project.

Dr Yousif Al Hammadi, Senior Vice President – Business Development, Tabreed, pointed out, however, that reaching an efficiency of 0.77 is not only about integration of technologies, such as VSD or artificial intelligence. “It starts from the beginning, from the design, the EPC and the operation philosophy,” he said. “The key element is the end user and how we react to them, so operation plays a vital role in achieving this 0.77 kilowatt per hour.” Ahmad also touched on the issue of operation, sharing that Emaar District Cooling is working to further engage with end-users, FM providers and teams managing assets, and that he believes the 0.77 target is not far from being achieved.

However, in view of the many hurdles District Cooling companies are already facing, Dr Moubadder said that issues are aggravated by consultants offering misleading information to developers and presenting District Cooling as more expensive without taking a proper review of lifecycle cost. Mc Polin offered the same observation. “That’s what I call coffee-shop gossip,” he said, “because everyone has a story. You have to question the ethics of some consultants, because they want to design the big chillers on the roof and all of that. They bad-mouth District Cooling, and they talk clients out of it. I’ve seen this over and over and over again.”

Mc Polin said that common myths propagated in relation to District Cooling is that it’s expensive and dangerous and that the facility could lose its cooling if left with no alternative and if the provider goes bankrupt. “The numbers are not working out, but it’s like any accountancy – it’s how you do the figures,” he said, “Especially with lifecycle costs. If they are doing properly, it’s a no-brainer, but we continuously have this foggy chit chat, talking clients out of connecting to District Cooling.”

COUNTERPOINT

Hassan Younes

Hassan Younes, Director & Partner, Griffin Consultants; President, ASHRAE Falcon Chapter, said that such practice does exist, recalling a project where a consultant recommended against District Cooling and despite his (Younes’) efforts to highlight its benefit for that particular application, the client went with a conventional system. “Organisations are not one person,” Younes said. “You have to convince everyone – from the engineer to management – with a lifecycle cost and discuss other benefits, like ‘you don’t have refrigerants in the buildings, you don’t have your own chillers and it could lead to less environmental noise’.” Younes said apprehensions some consultants have towards District Cooling is from the lack of due diligence, adding that consultants could benefit greatly from revisiting old projects. “Few go back to their own designs to see what has happened,” he said, “which I think should be done to see if you were successful.”

Mansour Kharoub, Associate Principal – Mech Engineering Services, Khatib & Alami, said that admittedly, there are designers that do not
have the level of specialisation and are unprofessional; and they push their views without care. However, Kharoub said that designers also face a number of challenges, sharing his own experiences on a project, where the team was forced by the District Cooling provider to increase capacity by 30-35% when they were applying for connection. “We have to find a way in the middle,” he said, pointing out that total calculation for heat load is a balancing act to ensure it is not overdesigned or under-designed.

Sagar Kulkarni, Managing Director, Consistent Engineering Consultants, weighing in, said that in one project for a hotel building, the team of Consistent Engineering established cooling load at 1,600 tonnes. “We applied to the District Cooling provider, and we got a notification that the plot can only reach 1,200 tonnes,” he said. “They said, ‘You have done something wrong.’ We went back, changed the calculation load, fresh air requirement and diversity, and we were not able to go beyond 1,500 tonnes. After a lot of deliberation, we realised the plot was for a residential building, subsequently converted to a hotel building after special permissions, but the provisions were done during the master. So, such are the challenges when you talk about District Cooling.”

Kharoub said improper selection of control valves and the lack of commisioning are also culprits that lead to inefficient design and issues related to Delta T. “Most of the projects don’t have enough time to do commisioning, and occupants come in before they start,” he said. Echoing this, Kulkarni said that consultants are working according to the best design parameters, but the detailing, such as selection of PICVs must be better addressed at the contracting level, where a lot of the issues happen. “Full-time supervision of this, at times, doesn’t happen,” he said. “Design is one part, but I say 70-75% of the issues go to contracting and commissioning.” Weighing in on issues facing contractors, Sriram Nagarajan, Senior Manager, Voltas Limited, said that often, contractors are made responsible for Low Delta T, which is an issue that can be aggravated by poor equipment choice, and that the responsibility for Low delta T must come from all stakeholders.

Operation and maintenance are also affecting efficiency of buildings, Kharoub said. He shared that in one project, his team found that the facility management team had created an imbalance in the system. “After four or five years, it was not anymore the project we had delivered,” he said. Younes added that this is an issue that comes with the level of investment, or lack thereof, being made towards quality operations and maintenance teams. “How do you expect an operator of a building with 1,000 tonnes of refrigeration taking AED 2,500 to deliver good quality work?”

Financial constraints, said Timothy McLaren, Senior Commercial Contracts Engineer, Ramboll, is an overarching issue that impacts the entire value chain. “Consultants work to a budget,” he said. “When you talk about the harmonisation of so many systems within the budget we established, if it doesn’t work, we have to go back to the client and say, ‘We have a problem, we have an unharmonised system.’ And if it’s not sufficient, we need to redesign, and it’s a big ball that continues. It’s all about the budget at the end of the day.”

L-R: Mansour Kharoub; Sagar Kulkarni; Timothy McLaren and Sriram Nagarajan

Younes said while a lot of responsibility does fall on consultants, commissioning agents, contractors and operators, the final decisions are still dependent on the owner. “I worked with a project where the original design had 900 tonnes, my calculation was 300, the owner went for 400, and the actual consumption was 250,” he said. As such, Younes discussed the importance of ASHRAE’s Owner’s Guide for Buildings Served by District Cooling, which was released earlier this year in an effort to address lack of understanding in the market, especially when it comes to low Delta T.

Sharing highlights of the main changes that eventually led to an extra 60 pages on the Guide, Younes said the first chapter includes an additional section on building owner’s benefits, and the second chapter elaborates further on refrigerant selection and the typical responsibility of a DCS provider, a building owner and design engineer. Chapter 3 added sections on refrigerant phase out, case studies on counterflow chillers arrangement and cooling tower location. “Chapter 4 added and elaborated more on valve vaults,” he said. “And Chapter 6 provided comparisons on energy storage technologies.” Younes said much of the changes were directed towards Chapter 8, which was rewritten to include additional sections on the organisation and structure of O&M, personnel requirements, procedure and documentation, training, performance and metrics, administration and support, outsourcing, maintenance frequencies, refrigerant management, maintenance programmes and strategies.

THE FOURTH PILLAR

While it is important to educate developers and building owners, Sougata Nandi, Founder & CEO, 3e Advisory & 3e Apps, said there is a greater need to have a better grasp on the needs of the ‘real consumer’. “The consumer is not the big building developer,” he said. “The consumer is each unit in the tower. Unless you are able to empower them, engage them and influence demand, whatever you do in the supply side will plateau. The time has come to focus on the consumer side of things, not just the master developer or building owner but the thousands of consumers that pay chilled water bills every month.”

Mc Polin added: “The biggest problem we have with District Cooling is that customers don’t like it, citizens don’t like it, because it’s a monopoly. It’s an issue of trust, and it’s an issue of individualism versus communal.” Mc Polin likened the issue to that of public transport. “Without a doubt, public transport is the best solution, but people still want to drive cars,” he said. “People still want to be in control of their houses and apartments. There is a psychological issue, so when we intervene we have to understand that we have a duty of care to the customer to reassure them and to physically make sure they are not a victim of a monopoly that doesn’t work, because they have no alternative.”

In reference to recent headlines showcasing dissatisfaction with District Cooling services, Al Nahdi, quoting Bill Gates, said, “Your most unhappy customers are your greatest source of learning. We need to learn to ask difficult questions.” She underlined the importance of developing the right financial model that will benefit customers and the need to divert towards a more customer-centric business. A first step in doing so, Al Nahdi said, is to engage with customers and have a better understanding of their needs. “Don’t treat District Cooling as one solution that fits all,” she said. “You need to sit with them and understand operational requirements and their targets.” Muna added that customers should be viewed as part

of the team, instead of a silent user of the service. “Consultants, contractors and utility providers – we are the experts,” she said. “It’s unfair if we leave only important decisions to us and not involve the consumer who will suffer most from those decisions in the coming years.”

Eyad Ismail, Group Director of Engineering, Ras Al Khaimah Economic Zone, pointed out that essentially, as customers are cost-driven, for District Cooling to see greater adoption there must be a way for benefits to be shared. Eid Mohammed, Senior Mechanical Engineer, UAE Ministry of Infrastructure Development, seconded this saying there must be a specific financial mechanism that will serve as an incentive for the public. Berbari said such a behavioural change can be seen in Copenhagen, where people can save approximately EUR 1,600 if they are connected to District Energy.

Weighing in, Mc Polin highlighted the importance of passing on the savings the developer achieved in no longer having to build a substation, and reduced cost on cabling as well as electrical and mechanical components in the building. “Where does the savings go?” he asked. “It goes out of the equation, and the entire capex is carried by District Cooling. This is a crazy business model doomed for failure and overloading consumer with extraordinary high [cost]. We need capex down, we need savings shared – be it government, developer, whoever it is, [they should] capture the savings and make sure it goes to the business model, and that’s when you have customers asking and begging for District Cooling. That’s the scale, level and target we need to go for.”

A REGULATORY TIGHTROPE

Mc Polin said that to address these issues, a top-down and bottom-up approach is vital. “Top-down is obviously regulation,” he said. “Everybody talks about it, but we can’t deliver them. We are continuously pushing for regulation, because government cannot get District Cooling fast enough. It’s a business, and a business is driven by its own rules of business. When governments try to intervene with a business case, there is a danger it might over-regulate and destroy the business, so it’s finding that balance in meeting government objectives fast enough, while allowing business to develop and those benefits to be shared.”

L-R: Amal Hamadeh; Eyad Ismail, Dominic Mc Polin and Eid Mohammed, Senior Mechanical Engineer, UAE Ministry of Infrastructure Development

Amal Hamadeh, Project Manager – Demand Side Management, UAE Ministry of Energy, echoed this. “Regulation for DC is vital, so we don’t turn away customers,” she said. “As it stands, there are some issues with billing that make DC unattractive, and this is not a message we want to come across. Moving forward, there has to be more conversation for keeping industry alive and keeping customers happy.”

Dr Moubadder said that without a shadow of a doubt, policymakers must implement strict policies in the utilisation of District Cooling, adding that doing so would go a long way in removing the issue of excess capacity. However, Dr Yousif Al Hammadi said that government bodies have their own set of challenges. “We always like to point fingers at government bodies – that they have to step up – but at the same time, we have to feel sorry for them. Innovation is progressing at such a pace they are suffering to come up with right regulation and mechanism to catch up.”

Mc Polin admitted that the developing regulation can be likened to walking a tightrope, especially when it comes to making District Cooling a normal part of the infrastructure family. “See, District Cooling is an orphan,” he said. “Most utilities are government utilities. This [District Cooling] is a company, a business that is going in the opposite direction,” he said. “It’s difficult to regulate, because it’s not the normal state going to private, this is private going to state. This is a different polarity in regulations, which means it has to have a little something special in these regulations, an understanding of the business and an understanding of the obstacles… and the biggest obstacle, really, is the consumer, and consumers don’t like it.”

The only way forward, Al Nahdi said, is collaboration. “I call upon all of you, not just those [that are] part of District Cooling plants, but also consultants, contractors, O&M teams and manufacturers – we need to challenge ourselves before challenging our customers. If we don’t think sustainability, we will end up in a point where we will have no customers at all.”

Despite the complexity surrounding the issue, Berbari said he remains thoroughly optimistic, so long as the dialogue continues. “Something more has to be done, and the good news is, it is being done,” he said. “Industry is ready for it. And conferences, like this one, put the seed for these changes. Probably in my 25 years in District Cooling, the key thing I have learnt is perseverance. Be optimistic, never give up and keep on. Change will happen one bit at a time – but we have to keep rocking the boat.”