Reflect Saudi construction sector’s resurgence with lineup of over 720 projects.

According to a recent statement issued by Saudi Build and Saudi Stone-Tech, the Kingdom of Saudi Arabia’s current lineup of construction developments includes over 720 projects spanning the commercial, education, healthcare, leisure and residential segments, and collectively budgeted at more than SAR1.6 trillion. These account for more than 25% of construction activities in the Gulf, making the Kingdom the region’s largest construction market.

This is reflected in the growing interest in Saudi Build 2010, the 22nd International Construction Technology and Building Materials Exhibition, and Saudi Stone-Tech, the 13th International Stone and Stone Technology Show, said Riyadh Exhibitions Company, the organiser of the two events.

The events, which are slated to run simultaneously at the Riyadh International Convention & Exhibition Centre, from October 18 to 21, are already 70% booked and expected to draw thousands of professional trade visitors, the organizer claimed. It also confirms the participation of 42 national pavilions, with Belgium, Egypt, the UK, France and Taiwan joining for the first time and contributing to a 12% increase in international participation.

Commenting on this, Shahid Bhatti, Project Manager, Saudi Build and Saudi Stone-Tech at Riyadh Exhibitions Company, said: “Saudi Build 2010 and Saudi Stone-Tech 2010 are still a few months away, and yet we have already received numerous inquiries and advanced confirmations. This is indicative of how Saudi Arabia has emerged as the leader in Gulf construction and property development. Last year, the domestic construction business posted a real growth of 3.9 per cent amidst the crisis. Given the more positive outlook for the global economy this year, we can expect even more local and foreign investments into one of the Kingdom’s strongest economic sectors, with Saudi Build 2010 and Saudi Stone-Tech 2010 serving as an important preview of construction opportunities.”

Saudi Build 2010 and Saudi Stone-Tech 2010 are business-to-business construction events in the Gulf, and will gather exhibitors from Europe, Africa, the Middle East, and Asia. According to Riyadh Exhibitions Company, the events will feature around 30,000 square metres of dedicated indoor and outdoor exhibition areas for stone, heavy machinery and construction equipment. It further claims that it is the only construction trade show in Saudi Arabia accredited by UFI, the Global Association of the Exhibition Industry.

The new facility will serve GCC region and nearby countries

Perma-Pipe, a subsidiary of MFRI, recently announced that its Board of Directors has approved the establishment of an additional insulated pipe manufacturing plant to be located in Dammam, Saudi Arabia, to serve the GCC region and nearby countries. The plant will be developed and operated by Perma-Pipe’s subsidiary, Perma-Pipe Middle East, (PPME), in tandem with its existing plant in the UAE.

According to MFRI, a site has been leased in Dammam Industrial Area, and the detailed plant engineering and design are currently in progress. The new manufacturing facility, stated MFRI, will serve the requirements of the oil and gas industry as well as the growing market for district cooling networks in the Kingdom.

As per a statement by MFRI, Perma-Pipe Saudi Arabia, (PPSA) will feature Perma-Pipe’s Xtru-Therm automated spray polyurethane insulation and several jacketing systems, including Polyethylene, metal and FRP, offering a comprehensive product range. PPSA will also be equipped to custom manufacture pipe spools and a complete range of pre-insulated fittings.

The company has reportedly received an industrial license and the required commercial registration and expects the plant to be fully operational in 2011.

“We eagerly anticipate this major strategic initiative, which will address the largest market in the GCC countries,” said said Fati Elgendy, President, Perma-Pipe, Inc. “Perma-Pipe Saudi Arabia will serve the KSA district heating and cooling and oil and gas markets in this important and rapidly growing economy. Furthermore, in conjunction with our facility in the United Arab Emirates, the company will be well-positioned to serve customers throughout the region.”

Avin Gidwani, President, Perma-Pipe Middle East, added: “The facility is within 20 miles of ARAMCO and very close to Qatar, Kuwait and Bahrain. PPSA fills in our Middle East expansion strategy. Perma-Pipe has successfully served Saudi Arabia since the 1970s, and is currently supplying several major projects in the country from our UAE facility. Prominent among the projects currently being supplied in Saudi Arabia is the Princess Noura University, an entirely new university campus exclusively for women. Through PPSA we look forward to expanding our share of this very large market, as well as adjacent areas in the GCC.”

Al-Futtaim Engineering recently announced being awarded a contract to supply 14,000 units of Sanyo air conditioners for the Al Razeen Labour City at Al Wathba, Abu Dhabi, for the Abu Dhabi General Services Company (Musanada). The contract from the International Construction Company (ICC) was reportedly signed in Abu Dhabi, in the presence of senior management personnel of Al-Futtaim Engineering and ICC.

Seen in the picture (above) following the signing are (from right) Rajesh Bhatia, Divisional Manager, A/C Division, Al-Futtaim Engineering; Dawood Bin Ozair, Managing Director, Al-Futtaim Engineering; Fuad Mashal, CEO, ICC; Farhat Noor Khan, Regional Sales Manager, Abu Dhabi, Al-Futtaim Engineering and Shadi Shadi, Sales Engineer, Al-Futtaim Engineering.

Infrastructure services to be ready by 2012

Planner and property developer, Rakeen, has announced completion of 80% of infrastructure work on Al Marjan Island, in what is claimed to be the first-of-its-kind man-made island in Ras Al Khaimah.

Artist impression of Al Marjan Island

According to Rakeen, the project is on track for its targeted completion date in 2012. The company further revealed that infrastructure services such as, potable water system, irrigation system, storm water system, rising main system and vacuum system will be ready by the time the first development projects on the island are completed.

Phase 1 of the infrastructure work, consisting of Peninsula Islands 1 and 2, was awarded to Kumho Industrial from South Korea, which started construction work in September 2008. Phase 2, consisting of Peninsula Islands 3 and 4, was awarded to Italian contractor Rizzani De Eccher, and work commenced in November 2009.

Speaking on the progress of the project, Yahia Kambris, Technical Director, Rakeen, said: “Construction work has progressed according to schedule, and we are on track to complete all infrastructure work in 18 months. The first development projects to be completed on the island will then be able to hook up to the infrastructure services and enjoy various amenities on the island. As we enter the final stretch of construction work, there has been a growing excitement among future residents of Al Marjan Island, as various sections of the prestigious development now begin to take shape.”

Continuing on the subject, he added, “In line with Rakeen’s core values of sustainability, responsibility and prosperity, Al Marjan Island is being developed to be one of the most attractive communities in the region, with a serene and optimised living environment that provides a perfect balance between life and work.”

Rakeen reported that the $1.8 billion (Dh6.6 billion) Al Marjan Island, one of the major projects of Rakeen, consists of five man-made coral-shaped islands, covering over 2.7 million square metres and extending up to four kilometres into the Arabian Gulf.

Stating that it improves indoor environmental quality (IEQ), while delivering energy-efficient performance, Johnson Controls has announced the launch of its new Enviro-Tec-brand, floor-mounted fan-coil unit.

According to Johnson Controls, available in concealed, exposed or sloped-top configurations, the unit includes factory-mounted DDC control or unit-mounted digital thermostats. Controllers and actuators are wired via plugged wiring harnesses with colour-coded plugs and wires. In addition, factory-mounted piping packages arrive on the job site with actuators wired to the controller.

The new fan-coil unit improves IEQ by offering the following, claim Johnson Controls:

• High-efficiency MERV 8 or MERV 13 filters
• Reduced sound levels
• Stainless steel coil casings
• A sloped, stainless-steel drain pan that avoids standing water
• Standard closed-cell foam insulation that exceeds the insulating value of fiberglass and does not wick condensate
• Dehumidification control via reheat options and thermostat control schemes

Other product features include:

• Optimised coil circuits and fan and motor combinations that contribute to 30 to 50% less energy than comparably sized competitive units
• Choice of a programmable thermostat that uses a clock for unit setback or a passive infrared (PIR) sensor that senses occupancy to determine setback to help manage energy consumption
• Wireless networking capabilities that enable communication with a building automation system
• Airflows ranging from nominal 200 to 1,200 CFM with performance certified as complying with AHRI Standard 440; sound data tested in accordance with AHRI Standard 350
• Cabinet heights and widths that can be varied in one-inch increments up to 12 inches to accommodate existing architectural features

Challenges are aplenty, but there are ways and means for the district cooling industry to see the downturn through, said participants at the recently concluded DC Dialogue 2010.

Three years ago, at the inaugural DC Dialogue, held in Dubai, the mood had been buoyant as 11 industry folk deliberated on the operations and maintenance aspects of district cooling. The discussions, held amidst a real estate boom, had been high on intensity, focusing as they did on critical issues like the low delta T syndrome and the need for properly maintaining cooling towers from an energy efficiency point of view and a health perspective.

In the second edition of DC Dialogue, held on June 2 at Yas Island, in Abu Dhabi, a different kind of intensity was on display. This time around, the number of people present swelled. While 2007 had drawn 11 people and no audience, Yas Island drew not only a larger participation but also a large audience, all eagerly converging to hear what could be done to resuscitate an industry in distress. Post Lehman, the district cooling industry began to flounder as it hit road blocks spurred by a precipitous slowing down of real estate construction. During 2006, 2007 and much of 2008, it had transformed into a behemoth that constantly fed on a slew of new projects – in Dubai, in particular – to keep the momentum alive. The downturn in its wake mauled the momentum, forcing the industry to look for sustenance for survival. Despondency crept in, though George Berbari of DC Pro Engineering, speaking as a member of the audience at Yas, pointed out that the melancholy was the offshoot of an exaggerated fear, considering that other avenues for business never did go away. Abu Dhabi, Saudi Arabia and Qatar were – and continue to be – robust, he said. UAE’s capital, he added, had such projects as the Khalifa University (20,000 TR), Saadiyat Island first phase (42,000 TR) and Abu Dhabi Airport (300,000 TR), over the next 15 years. In Saudi Arabia, he pointed out, Makkah and Madinah also had several projects, and in Qatar, Lusail alone had 400,000 TR in the pipeline.

Berbari’s comments notwithstanding, DC Dialogue at Yas Island essentially became an exercise in collectively identifying challenges, agreeing that they, indeed, were legitimate challenges, and proposing solutions.

A key challenge that the downturn immediately threw up was the lack of availability of sufficient projects in the market, compared to two years ago. While projects do exist to this day, as Berbari said, they are not sufficient, considering the large number of contractors vying for a share of a considerably smaller pie. By way of offering solutions, the participants agreed that there was a need to think broadly. Abdullah Zeneeh of Rio Electromechanical said that he saw an opportunity for growth and sustenance by focusing on existing buildings. Building owners, he said, were now being careful in sizing their plant rooms, in contrast to the profligacy of the past. The new mindset, he said, meant that it was possible to build smaller plant rooms in congested neighbourhoods and, thus, overcome the constraint of a smaller footprint. Ken Currie of Mott MacDonald, and a long-time proponent of a modular approach, said that distributed cooling was, indeed, the answer. A smaller plant room, he said, meant a smaller piping network, which could be accommodated even in congested utility corridors.

Some of the participants said that while building a smaller modular plant room was, indeed, a solution for Dubai, the proposal was not attractive enough to many building owners, and also end-users, because they lacked a true awareness and education about district cooling and because they had developed several misconceptions about the costs involved. Said Mohammad Abusaa, of ADC Energy Systems: “Some people are walking away, because they have seen only the large plant rooms and, thus, feel that district cooling will be expensive.” Added Zeneeh: “Also, the existing plants have never showed what they have achieved. A plant room is not what it was designed for. So the contractor has to prove (the effectiveness of district cooling) by using, say, BMS. Developers and investors want to see results. It has not been proved so far, and strongly. The figure of savings has not been achieved so far.”

The ramifications of poor PR for district cooling, some of the participants said, simply could not be ignored. While on one side, some major existing developments, like the Burj Al Arab and the Emirates Towers were in the process of migrating to district cooling, a reverse phenomenon was being seen in Jumeirah Lake Towers, where some owners were looking to move to standalone systems. Zeneeh pointed out to the example of a new development where the owner had already installed air-cooled chillers in the first phase and was, in fact, pressing ahead with the same for the second phase. This, Zeneeh said, was a worrying phenomenon. Suggesting that he was not surprised by Zeneeh’s words, Abusaa said that the industry ought to take note of the fact that the air-cooled market was not sitting still and was, in fact, building better efficiencies. “So we are facing this challenge as district cooling providers,” Abusaa added.

The participants said that in addition to educating building owners and end-users on the numerous benefits of district cooling, there was an urgent need to introduce government regulation to ensure that district cooling plants were energy efficient. Tawfiq Abu Soud of Drake & Scull went a step further when he said that regulation, as such, was insufficient, and that the government should issue mandatory rules. “(The use of) treated sewage effluent is mandatory for us, so why not make district cooling plants a mandatory issue?” he asked. This prompted Prabhakar Naik of John Buck International to say that mandatory rules would work but only if the benefit of the savings through district cooling was passed on to the end-user. “For it to be mandatory, the government should subsidise the rate (of district cooling),” he said. By way of substantiating Naik’s words, Currie narrated an interaction he had had with the main developer of a project, who told Currie that district cooling would not be attractive for him till there was a move to reduce the rate. Thiyagarajan of TransGulf Electromechanical agreed with the viewpoint of Naik and Currie. Referring to Zeneeh’s earlier comment about the need to pursue the possibility of installing a district cooling scheme in an existing development, Thiyagarajan said that owners of existing buildings would be willing to migrate to district cooling only if they were offered better costs.

Almost all the participants agreed that it was in the best interests of GCC governments to offer a preferential treatment to district cooling. Earlier in the session, Berbari had quoted the Minister of Oil and Gas in Saudi Arabia as saying that Saudi Arabia was currently consuming 3.5 million barrels a day for producing power and that it would be consuming seven million barrels out of 12 million barrels a day it would be producing in 15 years’ time. In that context, district cooling was crucial, in that it reduced power consumption, Berbari had said. Currie referred to Berbari’s words when he expressed the collective sentiment that the region’s governments ought to treat the industry better in a bid to conserve power.

Another legitimate challenge, the participants agreed, was the financing of district cooling projects in the midst of the downturn. He said that Drake & Scull had adopted a novel approach in situations where funding was not forthcoming. Citing a project in Sudan, Abu Soud said that Drake & Scull adopted the DBFO model. “The client owns the assets, and we finance it,” he said.

Saying that it was not easy to attract finance, Abu Soud added that those developers going ahead with projects did have the funds, but they were trying to protect the money. “They are keeping it aside for a rainy day,” he said. Zeneeh said the developers were adopting a cautious approach, because district cooling involved a long payback period. “They would want to invest their money in something else,” Zeneeh added.

A key challenge when it came to financing district cooling projects involved the extensive piping networks. Masood Raza of PAL Technology wanted to know if there was any way the district cooling industry could let someone else do the piping. Abu Soud said in response that piping was, indeed, a vexing issue, as it was a dead asset for two to three years, till the network started distributing chilled water. And with 15-20% of the total cost of a district cooling scheme going to piping infrastructure, that was, indeed, a lot of money. Abu Soud added that Drake & Scull had succeeded in getting the client to agree to finance the piping in the Durrat Al Bahrain project, though. “It improved the financial model and reduced the fee for the enduser,” he said. By way of offering an alternative approach, which could be equally successful, Naik said that the infrastructure cost could be recovered as a first-cost from the investor. Currie said that distributed cooling could be a strong answer to piping-related financial challenges. “It’s easy for Dubai Municipality to take ownership and put individual plants to ramp up cooling,” he said. “For me, distributed cooling is the way forward, because the piping will be small.”

Abusaa, while supporting distributed cooling for Dubai, said that it would perhaps not be prudent to advocate a modular approach for the whole of the GCC. A country like Saudi Arabia, with its large domestic population, has different needs, he said. “In Saudi Arabia, they don’t have the problem,” he said. “Our problem (in Dubai) is the expatriate population. So here, it is a challenge, but there it is not; they may need a large load.”

An equally formidable challenge, the participants agreed, was the very survival of district cooling companies as business entities in the near term, despite what Berbari had said about there being sufficient projects and despite there being hope in the form of possible schemes involving existing buildings. The participants agreed and acknowledged that the market had changed and that companies were diversifying and expanding as a natural way of adapting to survive. For instance, some of the companies are offering a raft of solutions that include MEP, power and water. Said Abu Soud: “You cannot sustain only on district cooling. That’s why we have Drake & Scull Water and Power, which includes all the infrastructure-related aspects: wastewater treatment, water treatment, power generation, sub-stations, district cooling and the networks you see underground. All these services are integrated.”

The feeling in the industry, the participants said, was that the large district cooling contracting companies were up to the task of offering a wide range of services. Said Thiyagarajan: “If you look at the background of the companies, most were general contractors that became specialists in district cooling. So there is an opportunity for people to migrate, definitely into sub-stations.” The big question, though, was, “Will a client accept a district cooling engineers who says, ‘We will do everything’?” The answer, Currie said, was a resounding “yes”. “I will accept,” he said, “because the capability is known. I think there is (room for) migration to infrastructure projects.”

Snapshots of the Event

Story: B Surendar | Photographs: Rey Delante

Mary Coons speaks to industry experts about the long and short-term implications of adopting district cooling in the Middle East. She concludes that despite several ramifications, it deserves to be considered seriously as it offers sustainable solutions.

Smart sustainable energy is crucial for district cooling. And district cooling is vital in the Middle East’s harsh desert climate. Air conditioning in the Middle East is an essential service, with obvious life safety implications. Therefore, even greater attention needs to be directed to enhancing efficiency, maintaining reliability, and ensuring safety and security of supply.

“The district energy industry – both heating and cooling – is a proven, reliable and scalable energy technology that can contribute immediately to greater energy efficiency and mitigate carbon emissions on a highly effective scale,” Rita Chahoud, Executive Director of the International District Energy Association’s United Arab Emirates chapter, states. “Proof comes from the US industry standing the test of time. Businesses have been operating efficiently for more than a century with district energy.”

BUILDING ENVIRONMENTALLY ‘GREEN ’

With today’s emphasis on building ‘green’ to protect the environment, there’s already a frontrunner for cooling buildings. District cooling has always been environmentally friendly, with outstanding reliability and compelling efficiency. Going ‘green’ – and what shade of green – means different things within a variety of industries. District energy, which consists of heating and/or cooling water to heat and air condition buildings, is already ‘green’ in the sense that it uses so much less electricity than the alternatives, thus, reducing carbon footprints.

Bernt Andersson, CEO of Tabreed Bahrain, a utility company selling chilled water for building operators to use for air conditioning, believes that the only way to meet the demand for cooling buildings in a sustainable manner is to be sustainable. “And to be sustainable, one must utilise higher efficiency from district cooling plants as a local solution,” he says. “This green environmental thinking needs to take precedence in this part of the world, by making entire systems more efficient. We simply cannot burn fuels inefficiently to produce electricity.”

District cooling’s sustainable development provides essential environmental benefits, such as reducing air pollution, global warming, and ozone depletion. Its superior energy efficiency reduces electricity consumption – probably its greatest environmental impact – says Mark Spurr, President, FVB Energy Inc. FVB, a US consulting firm specialising in district energy systems, has a Middle East presence, with an office in Bahrain.

Elaborating on the environmental impact, Spurr explains, “This positive reduction in electricity consumption can be translated into any number of parameters. The most prominent one is carbon dioxide. We calculate that for every tonne of connected cooling load, we’ll save annually about 1.3 metric tonnes of carbon dioxide. That’s a huge environmental benefit.” On the flip side, he acknowledges, “The potential negative with district cooling, environmentally, is water. Potable (sweet) water is a precious commodity, and electricity reduction requires water. The days of using sweet water for a cooling tower makeup are rapidly ending. Water access, and making sure that water can be procured in an environmentally acceptable way, is key.”

The good news, though, according to Spurr, is the available options to this environmental challenge. “We can do many things, including using relatively low-quality water,” Spurr says. “The option of treated sewage effluent (TSE) for cooling tower makeup is another potential synergy of district cooling, with new developments.”

Major real estate developments create demand for all utilities, including wastewater treatment and cooling. “At FVB, we are focused on integrated infrastructure design, such as using the output of wastewater treatment – TSE – for optimising and reducing the environmental impact of district cooling,” Spurr says.

Says Andersson: “In Bahrain, where we use seawater for cooling, if the water is not distributed properly when let out, local sea life can be harmed. Therefore, you always try to distribute the water over longer lengths, so as to not impact the local change of temperature too much.”

Speaking on the pluses of district cooling, Andersson says: “Less natural gas or fuel oil is required to produce electrical power, with the main reduction being greenhouse gases. Often overlooked is the heat emitted from rooftop chillers. Substantial amounts of energy are released into the atmosphere. Chillers on the rooftops of buildings can contribute to the ambient temperature increasing in an urban area. That goes away if you use seawater for cooling. Another benefit of centralised plants is lower refrigerant emissions. From that perspective alone comes many benefits.”

In the near future, further restrictions related to which refrigerants will be allowed for use will also help the district cooling business, as well as the environment, say industry experts.

Thermal energy storage technology can further increase district cooling efficiency by shifting production to nighttime, when chiller efficiency is higher. In addition, by allowing chillers to operate at night, during the offpeak period, thermal energy storage reduces the peak demand on the electrical system. This can be viewed as either freeing up existing generation capacity for users who cannot shift their demand, or reducing the need for new generation capacity to meet the growing power demand of new customers.

All of the major Middle East players, including Bahrain’s Ministry of Works, agree that energy efficiency is the biggest benefit of district cooling, globally, not just in the Middle East.

END-USER BENEFITS

In the current economic climate, cost is more important than ever. Reduced capital costs is the number one benefit for district cooling customers, with the reduction in peak power demand being an integral component for reducing these costs.

“Building developers save not only the cost of buying and installing cooling equipment but also on the connection fees that they might otherwise have to pay the government to obtain power, and eliminate the operation and maintenance costs of running cooling equipment,” explains Spurr.

Comfort is an obvious added benefit. Since district cooling provides a much higher quality and a more controllable comfort level in buildings, end users find this benefit extremely important. Living in the Middle East with high temperature and humidity levels takes an obvious toll on one’s body. Working and conducting business in a comfortably cooled environment can make all the difference to employees and customers.

Maintaining cooling equipment in the Middle East is a major challenge due to its harsh environment. So, from a building management perspective, the convenience associated with district cooling services is considerable. According to industry advocates, that’s something customers don’t appreciate until they’ve experienced it. Khalil Issa, CEO of Energy Central, a multi-utility services company in Bahrain, calls it “a one-stop shop for multiple utilities and integrated solutions.” He should know, as the company works with the Gulf’s industrial clients more so than real estate clients, and also with developers within a design, bid, finance and operation model.

“In general, district cooling is an energy-intensive utility,” he maintains. “It is a utility that is integrated to leverage multiple utilities, which, in turn, yields a more efficient supply of energy. Combining industrial process loads with building air conditioning loads reduces costs by increasing the number of hours chiller equipment is operated fully loaded. This occurs because the industrial customer requires process cooling even during periods of low air conditioning demand. The process load is tied to industrial production rather than outdoor temperature.”

Andersson, on the other hand, cites reduced requirements for new power stations, transmission and distribution stations for electricity as additional energy-efficient benefits. “With the conventional approach, there would have to be so many power plants with their distribution network so large that it’s almost non-feasible.”

TECHNICAL CHALLENGES

Though there are significant benefits that district energy brings with it, it is not without its share of technical challenges, when district cooling facilities have to be designed in the Middle East.

“Because the combination of high temperature and humidity here is enormous, condenser cooling is our biggest technical challenge,” says Todd Sivertsson, General Manager, FVB Energy, Bahrain.

In simple terms, chillers have a cold and warm side, similar to a refrigerator. The condenser, located on the backside of the refrigerator, needs to be cooled down. “If you try to use air to cool the condenser for large chillers,” explains Sivertsson, “this would require vast heat transfer areas, and there’s not the space. So, instead, we use water to cool it down, which is also much more energy efficient.”

Since the Ministry of Works does not permit using municipality water for cooling – and rightly so – sea water is used. Herein lies a challenge: “Sea water is very corrosive,” Sivertsson continues, “so you need good materials or you must produce fresh water from the sea water. Regardless, your plant must be located near the sea. It’s cost-prohibitive to have long intake and outfall pipes to the sea.”

A second challenge is Bahrain’s high groundwater table with its corrosive, brackish water. Underground pipe connections, therefore, must be one hundred percent watertight.

With constrained power supplies, more district cooling plants need to construct electrical substations into their facility, which adds a level of complexity. Factor in the limited, but valuable, Bahrain real estate, and you now have stakeholders interested in integrating district cooling into building projects, such as with Bahrain Financial Harbour.

District cooling development is totally intertwined with the pace of real estate development. Says Spurr: “To the extent that you have major real estate developments occurring in hot climates, there is going to be a very good correlation with the growth of district cooling.”

ECONOMIC CHALLENGES

The district cooling industry, in general, requires extensive capital at the outset. A payback timeframe is easily 10 or more years, making it difficult to entice investors. Investors want a quick return on their investment, and that is not possible with district cooling.

The economic challenge, then, is to build cost-effective facilities in the context of a rapidly changing and uncertain infrastructure. But how do you lay a pipe across a road when the road hasn’t been built yet, or it is planned for future expansion?

Issa – as do others – feels the industry is currently undergoing reassessment. “The next few years will see a more careful consideration focusing on modularity and scalability,” he says. “Gone are the mega plants concept – a web of plants interconnected and closely associated with loads, impacting infrastructure costs.”

A Gulf-specific challenge is that with the government subsidising energy – thus making it very inexpensive – building owners and investors are opting for inefficient cooling solutions using 100% electricity. In the long term, district cooling saves money, while utilising only half of the electricity, and from completion on, provides greater comfort, more environmental benefits, less maintenance, and a host of other enduser advantages.

“When clients demand district cooling, the government, in turn, will save energy,” says Sivertsson. “The government’s benefit would be, not needing to produce so much electricity and building out all of this capacity. Water usage regulations will also come into play, making district cooling more favoured.”

Todd Serious

“The bottom line is that, district cooling systems, particularly in the Middle East, are creating scale for more robust power and water conservation technologies, while mitigating peak demand on the power grid, enhancing sustainable solutions, and generating space and capital savings for end users,” reports Rob Thornton, president of District Energy and the International District Energy Association (IDEA). “Part of IDEA’s challenge is to educate and inform, not only policymakers, but also the wider population, as to the merits and tools involved in developing robust district energy infrastructure.”

A FINANCIAL FIRST

In late January, the first Middle Eastern non-recourse Islamic project financing deal was funded for a district cooling project. Eastern District Cooling Company, a wholly owned subsidiary of Zamil Industrial Investment Company (Zamil Industrial), signed with The National Commercial Bank (NCB) for the non-recourse financing project.

Mansoor Durrani, Head of Project, Finance, NCB, stated at the signing: “We anticipate that there will be a number of similar district cooling projects to be financed with similar structures in the GCC, and are pleased that Zamil is the first Saudi entity to close such a transaction.”

Zamil Industrial signed in November 2007 a 22-year Energy Performance contract with Saudi Basic Industries Corporation for the complete outsourcing of process and comfort cooling, including the construction of a central cooling plant to supply 20,000 tonnes of refrigeration within the premises of Saudi Iron & Steel Company (Hadeed) in Jubail Industrial City, Saudi Arabia. The project is being developed by Energy Central Company of Bahrain, and advised by Gulf International Bank with FVB Energy serving as technical consultant. The total project size is valued at approximately SR300 million, and is expected to go on stream during 2010.

GOVERNMENT ROLES AND CHALLENGES

Al Jimi cooling towers

Governments play a critical role in enabling district cooling infrastructure. Bahrain’s Ministry of Works (MoW), the construction arm of the government, is challenged with providing infrastructure for district cooling development, not only electricity, but also water and roads. This is all in accordance with the legal frameworks set out in the National Strategic Master Plan for Bahrain, Vision 2030. MoW is responsible for reviewing and permitting facilities to be constructed in the streets, sighting the plants, and issuing wayleaves (permission to use public land). In addition, the Ministry is tasked with addressing environmental issues in relation to sewerage, and works closely with the country’s private district cooling providers in TSE developments.

The Ministry’s Central Planning Organisation coordinates the planning and implementation of all public infrastructure projects across the public sector, as well as major industries. Dominic McPolin, Chief Planning Officer for the Ministry of Works, agrees that district cooling is, indeed, one of the most important industries in the Middle East, and recognises it as “the biggest quick-win in the supply side of power. It is also potentially the biggest early-win on the reduction of carbon emissions. As such, it is too important to be left to the marketing department of any district cooling company.”

The challenge, McPolin contends, is meeting district cooling demand as quickly as possible. Nevertheless, he believes there is a lack of procedure and a lack of regulations associated with district cooling, which is hindering its quick growth.

The private companies involved in district cooling projects in the Kingdom generally agree that the government utility requirements are strict; some believe they are too stringent. However, it is important to note that this is Bahrain’s first foray into district cooling (its first facility is under construction in the Diplomatic area), and thus, a learning experience. Obviously, the Ministry of Works wants to ensure that everything is correct.

“It (district cooling) has been run as a business model: integrating for technical and spatial solutions; guiding and helping companies as a team of experts; providing effective and secure customer delivery,” explains McPolin. “But the business model must change to a regulation model. Although we are all in this together, regulation is a government issue.

“This is too important to the government to be left to the success or failure of a district cooling company. We need to regulate this business because of the public/private relationships. We need transparency, customers need protection, and motorists need ease and efficiency driving through construction of public roads while pipes are being laid beneath them.”

Until procedures and regulations are determined and in place, the Ministry of Works has placed a moratorium on all new district cooling projects in the Kingdom.

Furthering his stance, McPolin believes the market now craves regulation, thereby providing security for banks lending huge amounts of money.

Zamil Industrial signing ceremony

“There now exists a change in mindset in this industry. We realise there needs to be benefits for businesses, district cooling companies, and the government,” he explains, and goes on to say, “This is possibly the most important new infrastructure in this region. The industry has an opportunity to get into this equation. It’s a challenge to get it rolled out and be widespread. We want to work as partners, but we must do it through a transparent process. It cannot be any other way. Energy efficiency is the major criterion we seek in a transparent process.”

Why is district cooling so important to Bahrain’s government? According to McPolin, there is the financial incentive for those who pay the government for energy in terms of oil and natural gas conservation, the enormous impact of reducing the carbon footprint, spatial issues (with reduced power demand comes a reduction in substations), and a host of others.

Here, the stakeholders have many faces: the utility developer/operator, lenders, end users, and contractors and consultants. There are challenges to spreading the risks to those best suited to deal with them. “This is a challenge the government is interested in, however,” McPolin says. “We recognise the need to get the price to end users down.”

“Regulation is vital for the realisation of Government objectives and for the stability and growth in the district cooling industry. This is a complex issue, which, like all regulatory practice, requires a delicate balance in its approach in order to maximise the potential of the industry within a transparent and open market for the service. The Government wants to intervene with balance and fairness, despite building models crashing as we speak.”

Although Issa believes the government must play a greater role now than it has in the past, he does have questions: Does the government have an obligation to step in? Should they be custodians of revenue lines? “I don’t think you can bundle everything under one party in order to provide the most cost-effective product,” Issa explains. “The government can pass on electrical transmission cost with reduced risk if there is a public/private partnership with the government, for example.”

So, what is holding back and/or impacting the growth of district cooling in the Gulf – not just in Bahrain? According to Issa, although district cooling companies are helping both the government and the energy sector, it has been very challenging to obtain the necessary supplies of electricity and water, and obtain permit approvals, thereby negatively impacting growth.

Adds Sivertsson: “One of the challenges we face in Bahrain is that the Ministry of Works wants to introduce district cooling regulations. This is holding the industry back, as the Ministry has halted all further development of district cooling through public roads until there are regulations in place.”

Paths for potential utility integration (Courtesy of IDEA District Cooling Best Practices Guide”)

Spurr interjects: “What this means in lay terms is that the Ministry would like to regulate district cooling as a regulated public utility. It is a very politically sensitive and tangled topic. A regulated public utility guarantees a rate of return with the government determining what rates to charge. District cooling worldwide has very, very few systems regulated, and such regulation is almost unheard of in the United States.”

Andersson advocates adjusting the electrical tariff system to give a correct reflection of electricity production costs. “If you do that, the whole thing will go to where it should go and where Bahrain’s government wants it to go. This makes it a better use of district cooling, in my opinion,” he says.

McPolin explains that the Ministry of Works is in the very initial stages of regulation discussion with the district cooling companies in Bahrain. “The time is right,” he emphasises. “The industry is ready and the government is ready to start this journey.” Establishing a licensing system for providers is on the board. For example, a Class C license requirement would be in place prior to development, rather than retrofitting later to district cooling. A Class E license issued to a designated area would make it compulsory to all developments to connect to the district cooling system.

When asked if developers will be approved for the entire system or piecemeal in urban areas – street by street or block by block – McPolin characterises his answer to this strategic question by replying, “We can make it happen anyway a developer wants, once we know it’s the right thing for Bahrain.”

As part of His Majesty King Hamad’s 2030 Vision, the Ministry of Works has set 2014 as a targeted goal by which to reduce CO2 emissions by 60% per capita – from 31 tonnes to 10 tonnes. Optimistic shortterm goals, admits McPolin, include introducing thermal storage and retrofitting existing urban areas, such as the highly dense Juffair, from current mini-split units to district cooling.

“It is important for district cooling companies to help governments to really understand the economics of the electrical benefits of district cooling,” believes Spurr, “because in some cases, district cooling is being constrained, while in other situations, the most optimal district cooling solution is being repressed. This occurs when a government is not providing the correct economic signals. For example, if there were truly cost-based power tariffs, you would see abundant thermal energy storage. So, the big issue and greater need, in my opinion, is to help governments understand how district cooling saves them capital and operating costs in the power sector.

“The bottom line is that, district cooling provides a good value proposition when you take into account all of the capital and operating costs,” Spurr says, “and it’s a good shade of environmental ‘green’.”

Nigel Hawley, General Manager, Trane (Middle East, India and Africa), speaks of the challenges faced by the HVACR industry today, and his commitment to achieving green building goals, even as he gives us glimpses of his life.

The beginning

Nigel Hawley

I was born in a lovely, yet small town, called Bromsgrove, in Worcestershire, England, at the end of 1966, five months after Booby Moore lifted the Football World Cup for England – something that is very much on my mind at the moment!

Bromsgrove is a small market town in one of the so-called “shire” counties of central England, and was focused on farming and agriculture. I vividly remember going to the local market each week with my mother to buy local produce in the auction, and even growing and selling plants and vegetables.

I am the only son of my parents, and the third born, almost 10 years younger than my two elder sisters. Though a Christian and a Protestant, all of my schooling was at Roman Catholic schools, due to the proximity of the primary school to my home.

After enjoying this school so much, it was decided I would attend the Roman Catholic Middle and High School in the neighbouring town, which involved me taking a one-hour bus ride each day on the school bus, not dissimilar to many children today in Dubai.

Outside of school hours, I loved to play soccer. This, we – my friends and I – did all evening-long, and every day of our summer holidays in the patches of a ground close to our homes. Whilst playing in various amateur teams most of my life, sadly, that is where it ends!

At school, my aptitude in Mathematics led me to undertaking my diploma in Business Studies and Finance from my local North Worcestershire College, which I completed in 1985. After college, I decided to take a break from studying, and took up a position as a Management Trainee at the National Health Service in the UK. Whilst this was very enjoyable, I realised that to progress with my career ambitions, I needed to complete my university education. I, therefore, joined the Hull University in 1986, wherein I undertook my Honours degree in Finance. I graduated with flying colours, topping my batch and won several awards during the three years of university education. I forged some of the closest friendships during this time.

Getting initiated into the HVACR industry

Fresh after graduating from university, I joined KPMG, an international network of member firms, offering audit, tax and advisory services globally. I spent 13 very enjoyable years in, what I still consider to be, one of the very best professional services firms in the world. Most of what I use and apply every day is based on what I learnt during those 13 years.

My career with KPMG started in Audit and ended up in the consulting side of the business, focusing on risk management and corporate governance. It took me across the UK and Europe on many customer engagements, and involved various overseas assignments, including several years in the US, when I lived in New York City, which was a very special time in my life.

I finally left KPMG at the end of 2002, to explore new horizons and opportunities, as by then, I had met Valerie, (another advantage of working for KPMG), who was working as an Automotive Consultant for the Paris office, after completing her Optics Engineering degree, and we had decided we needed to live in a neutral country outside of France or England. Also, I decided it was a good time for a new experience away from KPMG.

I took the opportunity to join the EMEIA HQ of American Standard, the then holding company of Trane (along with Ideal Standard and Wabco), in Brussels, as the head of Audit for EMEIA, for all three businesses, including Trane. My previous experience at KPMG came in very useful here, enabling me to successfully manage this role. Never did I imagine that few years later, I would relocate to the Middle East.

After four and a half years, I moved to an operational role in Trane, based in Dubai as the Finance Director for the Middle East, India and Africa regions. This was in October 2006, at what turned out in hindsight, to be the twilight years of the district cooling boom!

In March 2009, I was promoted to General Manager for Middle East, India and Africa.

The road oft-taken …

I think, as far as my career is concerned, I took what is a fairly established path for a finance graduate from the UK/western Europe. We are meant to live our stories. It’s when you let go of trying to control the path, and simply live the story ahead of you – win, lose or draw – that you ensure your own success. My life so far has been a calculated one. My move to relocate or switch jobs was an obvious choice to furthering my career. What lies in store for me next has not yet been decided, but I am very confident that, with the many opportunities Ingersoll Rand has to offer around the world, challenges and experiences lie ahead.

‘Traning’ for life

After my immediate family, Trane means a lot to me. My role as the head of business in Middle East, India and Africa keeps me on my toes 24/7. Whilst I do work long hours, I still manage a healthy work-life balance. And because I enjoy my job, this is not a problem.

At Trane, our philosophy is, our customer comes first. Our customer is the reason we exist. Our job is to meet his/her needs by using the expertise and knowledge we have in this business. I believe our employees are our most important resource. They provide the sole source for our ability to meet our customer’s needs.

Our values and brand promise unite us as a company, and express how we operate, how we conduct business and how we differentiate ourselves in the global marketplace. The five core values of our company are: integrity, respect, teamwork, innovation and courage.

The idea of using technology to give people relief from summer heat was a radical and unproven idea when Trane became an air conditioning pioneer in 1931. Trane fundamentally changed the concept of air conditioning large buildings in 1938 – the beginning of a long chain of innovations leading to Trane’s current CenTraVac. It’s the industry standard for large commercial air conditioning systems – the most energy-efficient system available anywhere for large buildings, and it has earned Trane the ‘Best of the Best’ Award from the US Environmental Protection Agency.

When I look around Dubai, I am very proud to see that Trane solutions are cooling many landmark buildings and installations, such as, Palm Jumeirah- Crescent & Trunk (140,000 TR), Jumeriah Beach Residence (60,000 TR), Mall of the Emirates (13,000 TR), Discovery Gardens (100,000 TR), DIFC (48,000 TR), Dubai Investment Park (50,000 TR), Dubai Healthcare City (30,000 TR), Dubai World Central (100,000 TR), and Dubai Mall – Burj Khalifa (40,000 TR).

Recently, we added one more feather to our cap by qualifying to have, probably, the highest installation in the World. On the 155th & 159th floor of the iconic Burj Khalifa is our CGAN & CCUN Scroll units. We are proud to be associated with all these projects.

Trane has always had the resources necessary to take calculated risks. However, with the addition of Trane to the Ingersoll Rand portfolio, we have even more to offer our customers.

We are now a $13 billion globaldiversified industrial company, driven by employees who are proud to offer products and solutions people use every day, to create a positive impact in their world. Driven by a 100-year-old tradition of technological innovation, we enable companies and their customers to create progress.

We provide products, services and solutions to enhance the quality and comfort in homes and buildings, transport and protect food and perishables, secure homes and commercial properties, and enhance industrial productivity and efficiency.

Coping with recession

As a company, we probably reacted too slowly to the recession, but we reacted before any of our competitors did. Today, I see what they are going through. We have continued to invest locally, even while in the midst of the recession, be it in our service business or the controls business.

All our product programmes to upgrade the refrigerant R-410A conversion, and investment in centrifugal chillers were accelerated in 2009. If accelerated during a recession, you will have the best product portfolio coming out at the end of the recession.

We have probably increased our staff by four times in Abu Dhabi. We never stopped investing in India. We have continued to hire there and we are adding more people. We are nimble and will redeploy people. So, when the recession hit us, we sent people away to India (or wherever they are from), because they chose to go and work out of India (or wherever they are from). We have not replaced them in the Dubai office.

Internationally speaking, in the last 10 years, the growth for Trane has come from Europe, Middle East, Africa and India.

I believe that service and maintenance are the keys. We, as a company, here in Dubai, are going to move to a servicecentric business model, just like in Europe. The fact is that you can’t keep selling new equipment. Soon, it will be 60% new equipment and 40% service. But the service model in the GCC is still immature. We make centrifugal chillers that will run for 25 years and beyond. They will run efficiently if they are maintained and upgraded. Here, though, they tend to knock the buildings off, even before the equipment has reached its mid-way stage.

Pitfalls of receivables

We have not had a problem with receivables. The issues are related to backlog – projects for which order has been placed. We are aware that lots of projects in Dubai got stopped. But since we hadn’t started building the equipment, there was no financial exposure. We can build a centrifugal chiller in 24 weeks. So we don’t face the risk of financial exposure.

There were projects where we had already supplied the equipment, but we don’t have any write-offs. We are a services business, not an equipment business. If they don’t pay, who will they go to for the service of all the equipment?

Our policy is that we expect to be treated with respect by our clients, just like we treat them with respect. I don’t like being taken advantage of. On our side, we will always honour the delivery date, technical capabilities, and operating efficiencies. In the same way, the clients have a commitment on their side, which is to pay. But fortunately, owing to very clear and open discussions, we have never actually had any difficulties with them. Yes, there are cases of slow payments. If the LOC is opened on us by the contractor, who says that he has not been paid, we will leapfrog him and straight away go to the client for our payments. We have been proactive and have chased our money. We are owed only a negligible amount in the Dubai World contract. We were owed $2 million, and we chased the money, and today, we only have $50,000 to be received.

I believe in arguing for what I intrinsically believe is right. That way, I find Dubai to be very professional when you make it be.

Greece and the double-dip effect

I don’t think the precarious position Greece finds itself in now, is going to cause a major shock for the GCC. I think the risk to the region is from the global economy. In Dubai, it is true that they made a mistake with Dubai World. And since then, they have shown an ability to manage debt. But if the world goes into a double dip, then it will impact the GCC, including Qatar. This time around, though, I don’t see a dip happening.

Western Europe is going to have a tough time. But let us not forget that the economy in western Europe is well established. With even 0.5% growth, the work will continue. UK, for instance, has an installed industry base and residential communities. It has a population of 59 million people, all packed into a small land area. So, the demand will always be there. Germany is okay, France has its protectionist regime. So, I think the powerhouses are okay.

Challenges facing the industry

The current issues, as I see them are: we need to make buildings more efficient. This can be achieved only by focusing on systems rather than on products. I also believe that ensuring focus is maintained on the long-term strategy and decisions are not made to just protect this year’s bottom line. A balance, of course, needs to be found.

Maintenance and controls is another area that needs to be focused on. Even the best equipment in the world will not perform well, if it is not controlled correctly and maintained correctly.

Maintenance, particularly in the emerging markets, is something people seem to believe is not necessary, if they are covered by a manufacturer’s warranty. This is simply not true. It’s a bit like your new car. It is all well and good if Toyota is offering you a five-year warranty, but this is of little use if you do not get the car regularly serviced. In fact, the warranty will be invalidated! Getting end-contractors and end-users to understand this is a real challenge.

Ensuring people do not get carried away by headlines, especially with Dubai, Dubai World and district cooling, is also a challenge. Certainly, we are not seeing the projects that we have seen in the past five years, but there are still many projects out there, and they all need efficient centrifugal chillers to operate effectively.

The real challenges today lie with the number of projects that have been stuck at the part-built stage. Changing plans part way through is never easy. Projects that are still on the drawing board are much easier to handle/cancel.

Another worry is, the credit markets are still tight, and until funds start moving freely again, things will not dramatically improve. This is why, the Dubai World debt restructuring is so important. It sends a very strong message to the market. Whilst mistakes were clearly made back in November 2009, when the initial standstill arrangements were announced, significant progress has been made since then, which will bode well for Dubai and the UAE in years to come.

Solutions

Service businesses can actually thrive in the midst of a global economic recession, if they address the challenges facing their customers and embrace sustainable strategies to differentiate themselves. Taking care of customers requires continuous improvement in all elements of the business. We have adapted our Quality Improvement Process to allow our company to respond to the expanding needs of our customers. We provide many and varied capabilities, all focused on the broad spectrum of customer needs. Our goal is to have our equipment; controls and automation; project management and performance contracting; services and parts businesses working together, so that the sum of value provided to our customer, by each part of our business, exceeds the value offered by the whole. The key is to offer objective advice along with world-class, energy-efficient and reliable solutions, which will be around for the life of the building.

The important thing is to size systems according to actual demand, and not on wistful dreams of population growth.

How long it will take to come out of the economic downturn is a very difficult question to answer. A lot depends on finalising the Dubai World agreements, and then it will be interesting to see what happens with Dubai Holding and the rest of Dubai Inc.

Regardless of how long it takes, Dubai will succeed. There have been many false starts in the Gulf in the past, but Dubai has now come too far along the development curve, to not survive and prosper. As to what will it take, courage and credit are the main two ingredients. The UAE has plenty of both. So, I am not too concerned.

Insider’s insight into Qatar and Saudi Arabia

Qatar, to some extent, is like a mini Dubai five years ago – many exciting projects with everybody chasing them all. To be successful, you have to carefully select which project and which developer/contractor you want to work with.

I don’t profess to be an expert on Qatar’s economy, but it is a country we have serviced from Dubai for many years. To be frank, Trane, as a company, neglected Qatar. We still don’t have a representative there. Our technicians fly in and out, and it is frustrating for our customers. They tell us, “We’d rather go to you, but you are not here.” I find Qatar a very promising market. We now believe it is of such a size and importance that, by the end of this year, we will be opening an office there – a sales office and a service team. We may increase people working in Qatar in the next 12 months. We will have in place a team of technicians to handle AHUs, FCUs, controls and some of the district cooling equipment. We are going to appoint a new distributor of unitary products for Qatar, because we see the unitary market booming there. VRFs and medium-size rooftops qualify as unitary products for us.

There has been talk about the recent ramp up in the production of shale gas in the US and how this is going to impact Qatar. I don’t think shale gas can have a negative impact on Qatar. It has all the money. But when I think of Qatar, the risk for me is, how many people want to move in and live in Qatar? How much should you build, really? Yes, Qatar has an expat population consisting of people who work in the O&G industries, and their families. But what about those who want to visit Qatar for entertainment, say? So we have to decide how much to build. The UAE is different, because it has a certain lifestyle. And Saudi Arabia has a large domestic population. So, there is a demand for housing. And Oman is a beautiful country, with mountains and wadis. In the case of Qatar, that is a risk to me.

The positives about Qatar is that, its economics is very strong, and it is willing to spend. Of course, the question arises: what can they keep spending on? If this is the case, there is a limitation to all GCC states.

When it comes to Saudi Arabia, the situation is different. It is an incredibly important and a large market for us. The market for district cooling there is immense. It offers many exciting opportunities, which we are currently working on. There, all of our business is through our long-established distributor – Dallah Trading, a subsidiary of the Dallah Group – one of the top five Trane customers the world over. But we hope to be able to announce some good news very soon. Most importantly, we now see government investing more in education and healthcare verticals. But it is difficult to do business in Saudi Arabia. What is helping us is that more and more contractors, who were in the UAE, are now going there, owing to a shortage of jobs here. This cannot hurt us, because they will recommend Trane to their customers there.

R&D and innovation

This is probably the area where we benefited most from joining Ingersoll Rand. Our R&D facilities and investment are amongst the most advanced in the industry now. Our R&D centres from the US, Europe, India and China bring together highly talented and motivated people, who, through their competencies, make the maximum use of the centre’s technology and infrastructure for the benefit of the corporation. They offer support to Ingersoll Rand divisions globally. The mission of these centres is not only to be a hub of excellence for quality and reliability, testing, technology and supporting green solutions development, but also to develop our engineering talent, in whose hands our future success depends.

In 2009, despite the world financial crisis, Trane launched more new products than it had done in the past 20 years, including a complete overhaul of its unitary portfolio to a new environmentally responsible refrigerant, R410a. On April 22, we celebrated Earth Day, and Ingersoll Rand launched our Centre for Energy Efficiency and Sustainability (CEES).

CEES is a dedicated global group of leaders, focused on advocating and bringing to the market, energyefficient innovation and technologies for commercial buildings and transport, homes and select industrial applications. The CEES was created to increase the pace of environmentally sustainable innovation and to create a roadmap for businesses and organisations worldwide, to incorporate energy efficiency and environmentally focused processes into their daily operations.

This philosophy is close to my heart, as I had already introduced a number of small, but important, energy-saving initiatives in our offices around the region. Whilst reliability and energy efficiency runs through the company’s DNA, the flagship product remains our EarthWise Centrifugal chiller, which has picked numerous awards.

Focusing on ‘green’ products

Demand for environmentally responsible buildings is growing, as people realise it is not about cost, but a wise investment. Green buildings are designed with energy efficiency, indoor air quality (IAQ) and sustainable materials in mind.

The right HVAC system is critical to green buildings. As a leading global supplier of HVAC systems and services, with more than 650 LEED Accredited Professionals (APs), I think Trane can help clients achieve their green building goals.

Seeing that more and more businesses recognise the importance of building green, Trane actively supports the green building councils around the world, including in the UAE and in the US, and conferences such as Greenbuild and the Green Building Congress. We are advancing building technologies and solutions that accelerate the design and construction of green communities. We are a founding member of the Emirates Green Building Council.

How I wish to contribute to the growth and prosperity of the region

Personally, I would like to ensure when I eventually leave Dubai that I can put my hand on my heart and ensure it is a greener and more environmentally responsible place to live in.

I hope that district cooling plants are sized according to actual loads, rather than some fanciful dream, and that they use the most energy-efficient systems – something sadly, that has not always happened in the past. My hope also is that they are maintained and operating at the peak efficiency for which they were designed.

The world is my mentor

I try to learn from everyone I meet and work with. I am not a great believer in modelling myself on certain successful individuals. I believe we can all learn from everyone around us. Having said this, I must add that I am a great fan of good public orators. And although there are many, I believe Winston Churchill is out there with the best of them. He is one of the great leaders of recent times, and what I like most about him is his self-confidence and humour. Of his hundreds of wonderful quotes, I particularly like his response when confronted in the House of Commons by a certain lady MP, who was offended by one of his statements, and was prompted to say, “If I was your wife, I would poison your afternoon tea.” To which, Churchill instantly responded, “My good lady, if you were my wife, I would gladly drink it!”

My family

I’m English and aged 43. I’m married to Valerie, who hails from Gueret, on the Massif Central in France. We have three children – Chloe- Marie, aged nine, Eliott, aged seven and Charlotte-Alexine, aged five.

Chloe-Marie and Eliott were born in England, and Charlotte in Belgium, where we moved to in 2003, three months after Eliott’s birth. The children swim, dance, follow football and gymnastic courses. Valerie has to do most of the driving and organising. I am exhausted just listening to them at the end of the day!

As our children spent most of their early years in Flanders, the Dutch-speaking part of Belgium, they also attend local after-school Dutch classes. This is another challenge for them – being the only non-native Dutch children in the class. Being a stoic Englishman, I tell them this is ‘character building’. But I have to admit, I am very impressed by their resolve.

Life in Dubai

Both Valerie and I grew up in the countryside, in France and England, respectively, and therefore, have a great love for the outdoors and Nature. In Dubai, that draws us to the desert, and to Oman, in particular. It really is a wonderful country. We have just returned from a two-day trip, exploring the peak of Jabal Akhdar. At 2,090 metres, it is wonderfully cool at this time of year!

In the past four years, we have spent many wonderful days racing along next to dolphins, swimming with giant turtles, watching the turtles come ashore and lay their eggs, exploring Whabi Sands and following in Sir Wilfred Thesiger’s footsteps – exploring the Liwa Oasis, the Forgotten Quarter and Salalah. All these places are a lot different from what we find at home. This has added greatly to the richness of our experiences here in Dubai.

Combined use of differential pressure controllers and variable speed pumps delivers high energy savings. By Jean-Christophe Carette (M. Sc. Eng., PhD, ASHRAE member)

With 40% of the world’s energy being used in buildings and 60% of this being used in HVAC, our industry carries a heavy responsibility for delivering energy-efficient installations. Chillers used in cooling and boilers/heat pumps used in heating situations are the devices which use the highest amount of energy in installations. On the waterborne side, pumping energy consumption comes a close second, especially in cooling, where it represents between 15 and 20% of the annual energy consumption. It is, therefore, necessary to undertake any effort to maximise the energy savings allowed by modern chillers, boilers and pumps, while making it possible to deliver the required comfortable indoor climate in buildings.

The chilled water return temperature issue

Chiller efficiency is usually indicated by its coefficient of performance1 (COP). In order to keep the COP of a chiller as high as possible at partial load, the difference between the chilled water supply temperature (Ts) and the chilled water return temperature (Tr) should be kept as high as possible. In these conditions, the mean temperature difference between chilled water and the refrigerant is kept high, enhancing the heat transfer in the evaporator and, thus, the chiller COP. With a constant chilled water supply temperature Ts as generally considered in cooling, keeping a high delta T means that the chilled water return temperature should be kept as high as possible at partial load.

When proportional control is used for variable flow circuits, the temperature monotonically increases when the flow is reduced through the terminal unit (figure 1). Hence, keeping a stable and accurate control of the cooling output of a terminal unit will benefit the chiller COP. On the contrary, if proportional control deteriorates to an uncontrollable on-off level of behaviour, energy consumption and uncomfortable room temperature levels will become unavoidable.

Stable and accurate control

To ensure room temperature is controlled as accurately as possible, the global control characteristic of the circuit, relating the cooling output of the terminal unit to the control signal, must be as linear as possible. All other characteristic shapes lead to high gain in some parts of the control range, leading to uncontrolled room temperature oscillations. The global control characteristic of a circuit results from the combination of the characteristics of the different circuit components (figure 2).

For typical cooling conditions, the characteristic of a terminal unit is nonlinear. At small and medium loads, small variations of flow lead to rapid changes of the emission of the terminal unit, making control difficult. Choosing a control valve with an equalpercentage Kv characteristic that compensates for the non-linearity of the terminal unit is essential to solve this problem. Unfortunately, in variable flow systems, when the flow in the system is reduced, pressure drops are reduced through terminal units, pipes and accessories. This results in higher applied differential pressure across control valves, which distorts the relation between the flow and the control valve Kv.

With a linear actuator characteristic and an equal-percentage control valve, the degree of nonlinearity of the global circuit characteristic depends mainly on the importance of the Dp variation effects (figure 2). It is, therefore, essential to focus on avoiding differential pressure variations on control valves. This is best performed by locally stabilising the differential pressure with differential pressure controllers, either stand-alone or integrated into control valve bodies (pressure-independent control valves). In this later case, care must be taken that the basic control valve Kv characteristic is indeed of the equalpercentage type.

Compensating an improper control valve characteristic or Dp variation with actuator signal reprogramming is not a viable solution, as this leads to position control valves at low lifts and, thus, near or within its range limit, where it will deliver unstable on-off behaviour.

Variable speed pumps and differential pressure controllers

When a system is equipped with a variable speed pump (VSP), one could wonder if the use of differential pressure controllers is really needed as both devices seem to work according to the same basic principle: controlling the differential pressure at one point in the system. Variable speed pumps are meant to maximise pumping energy savings at varying load in a variable flow system. They do act where they are installed, on the total flow going through them, based on the differential pressure sensed at one location by their Dp sensor. Even if multiple sensors are used, at any one moment in time, a VSP can only adapt its speed according to the signal of one of the sensors.

Thus VSPs cannot guarantee by themselves a stable and accurate control to all circuits distributed all over the system. This is true whatever the control mode and Dp sensor location that is selected. Differential pressure controllers are required to protect local control valves from large differential pressure variations experienced at varying load in variable flow systems.

Minimising pumping energy use

When differential pressure controllers are used consistently over a variable flow system, enhanced pumping energy savings can be obtained by using a remote Dp sensor for the VSP. This is made possible, because differential pressure controllers are self-acting balancing devices adapting their opening according to the variations in the system. Without differential pressure control, the use of a remote Dp sensor in the middle or the end of the system always lead to having some circuits unable to deliver their design cooling output under average part-load conditions.

The process to obtain optimum energy savings together with good controllability of all circuits works in three steps:

1. Perform dynamic balancing with Dp controllers on each branch/zone or on each unit by using pressure independent control valves2.
2. Install the VSP Dp sensor on the index, Dp controlled, branch or circuit.
3. Adjust the set-point of the VSP to the largest required differential pressure amongst all Dp controlled branches/circuits.

This last step ensures that all Dp-stabilised areas will receive enough primary differential pressure at low load. In order to implement this process, it is warmly recommended to perform a complete differential pressure calculation of the system.

Conclusion

Ensuring a good controllability to hydronic circuits is crucial for avoiding instability leading to chilled water delta T degradation and, thus, higher energy consumption by chillers. Variable speed pumps are essential tools for minimising pumping energy use; however, variable speed pumps cannot ensure good controllability to all circuits at all loads, because they are “global” devices. Local differential pressure controllers are required for this task. When differential pressure control is applied consistently in a plant, the sensor of VSP can be placed on the index branch or zone, thereby leading to enhanced pumping energy savings while providing an excellent controllability to the system.

The author is the Head of the Hydronic College, the knowledge development unit of Tour and Andersson, an Indoor Climate business of IMI plc. He may be reached at <jc.carette@ tahcollege.com>

1 Ratio between the cooling output delivered at the evaporator and the electrical power required for running the compressor.

2 For cost-efficiency and depending on the hydronic structure of a plant, one approach can be used for some parts of the system while the other approach will be used for the other parts.

Adding the RTAC XE (EXtra Efficiency) to its RTAC range of air-cooled helicalrotary chilled water systems, Trane says that the newly launched product is particularly suitable for applications requiring reliability and safety. This includes industrial, hotel and office buildings, hospitals and clean rooms. The new RTAC XE 430-1520KW-chilled water system is Eurovent Class A certified, with an average Energy Efficiency Ratio (EER) of 3.15.

According to Trane, energy saving is achieved with the patented falling film evaporator technology, minimising the expense of operating a chilled water system, which can amount to over 90% of the total lifetime cost of an HVAC system.

Manufacturers enumerate the following features of the new product:

• The RTAC XE is equipped with a compressor with variable unloading, which is able to closely match a building’s cooling load or an industrial process load.
• The RTAC XE’s helicalrotary compressor has few moving parts to maximise operational reliability.
• To ensure quick and seamless installation, RTAC XE units are tested, and refrigerant and oil charged in the factory.
• The compact system requires minimal clearance space around the unit to ensure it fits into small spaces.

“Maximum energy efficiency and reliability are equally important factors in minimising the lifetime costs of operating an HVAC system,” says Pierre Cazal, Vice President, Product Management and Equipment Solutions for Trane Europe, Middle East, India and Africa. “The RTAC XE delivers both. With the RTAC XE, customers get safety and robustness, as well as built-in energy efficient technology.”