In this free-wheeling interview to B Surendar of Climate Control Middle East, IDEA President Rob Thornton discusses district cooling vis-à-vis the LEED rating system, the oft-articulated need for leadership in taking the ‘message’ to the authorities, and the challenges involved in doing so.

(The interview was conducted on November 9, 2010, in Doha, Qatar)

You said earlier that IDEA was in talks with the US Green Building Council to look at district energy from a LEED rating system’s point of view. What progress have you made?

Rob Thornton

We have had a high-level discussion on USGBC, district energy and thermal energy. There are two options now for modelling. The first is less onerous for the applicants. It is representative of the energy efficiency and environmental benefits of buildings. It puts district energy on a better footing compared to other options.

The final guideline is due and, in fact, there is a title for it. It is for buildings that use district energy. It clarifies the points available and the process involved. Earlier, the focus was only on the building and not the source energy. In reality, though, buildings can decide whether to buy district energy or put their own chillers, so it is not realistic to look only at buildings. District energy is a choice – for instance, it is not mandatory for a college to adopt district energy. In other words, building owners can decide. The new guidance recognises that district energy provides advantages to a building. The source has environmental benefits. The guidance makes the process more clear. There are more points available for the energy category, but that’s part of a larger move and not just district energy. I think the USGBC now looks to IDEA as a technical advisory resource. LEED is a flat, democratic process.

Here in Abu Dhabi, though, Estidama is taking steps to firmly establish the Pearl ratings system, which means that the district cooling industry will, perhaps, need to work more closely with Estidama than with the USGBC. What are your thoughts on this?

We are aware of different standards. One approach would be to look at the process. In the US, we have engaged the USGBC; as for others, if they don’t equitably treat district cooling, we would endeavour to engage them in dialogue. Our members in the market in Abu Dhabi need to tell us that this is an issue.

In the US, in Manhattan, for instance, 60% of all steam is co-generated. It is recycled heat. That’s not fully being considered. Our discussion with USGBC was that steam is displacing other potentially higher emitting sources.

The challenge in Manhattan is that the LEED rating in buildings directly affects the lease rates. In Manhattan, LEED rating became a value driver for rental rate. It was not district energy, but property owners themselves said, “We like steam.” And IDEA helped the situation. The market liked district energy and did not want to be handicapped. If there is a similar issue here, we want to be mindful of it. We have to submit data. It was a thorough process with the US Environmental Protection Agency (EPA) and the USGBC. We need to see a similar endeavour in Abu Dhabi.

During a panel discussion, Dr Anwar Hassan (of Johnson Controls) said the industry in the GCC needs to do a better job at documenting data and at articulating its needs to the authorities. What specific steps ought we to take?

The industry had been growing so quickly here that the focus was on construction and not on operations or the customers. As for collecting operations data, it is not as simple as it sounds. They (district cooling providers) are naturally cautious about offering data that could be perceived as confidential. If you are supplying chilled water to buildings and want to know the impact of that, we need the approval from the building owner. Also, people collect data in different metrics. In the US, for example, we collect data per mmbtu, per btu and per square footage. So even squaring the columns is time consuming. We do survey our members, but even here, people manage and collect data to suit their needs. So there is no singular approach.

I think, as well, that some of the systems in the region are still start-ups. They have not had full loads and higher occupancy. We have to factor that in. I agree with Dr Anwar that when you meet the committee chair, you need to be able to articulate what you want. I agree with him that saying that we are not properly recognised is not sufficient. Most of the times, they don’t understand us. It was the same with US EPA and USGBC. They were not aware that LEED was impacting district energy. There was this process of building awareness. We also have to give the authorities a path forward that they can feel comfortable with. In Illinois, for example, there is a real difference between day and night rates. One of the challenges in the region is that electricity rates are not cost-of-service-based rates. So that’s a foundational issue. Fundamentally, if electricity is a subsidised model, we have a challenge there. But there are cases we can reference that show improvement in the electricity grid. We would like to have more consumption in the night and less in the day. Chicago has shifted load.

In the region, part of what we can do is to demonstrate models and cases where district cooling has delivered a verifiable impact on grid. We need to show it to the authorities and see if that’s the behaviour they would like to see. Behaviour follows the rate. In the US, we have done briefings on the Hill (Capitol Hill), and we work closely with energy-efficiency institutions. I think that within, the appropriate people who are driving environmental policies have greater awareness, but the general public has little awareness. For instance, students in the US are not aware of the benefits, though lots of colleges have district energy. At the state level (in the US), we are paying attention. IDEA is working in support of the Department of Energy, and our mission is to help inform and educate the engineering and architectural community on the advantages of district energy and CHP. We do workshops, webinars, outreach. We would like to be a greater resource here and engage with the authorities. We are building our resource base. It’s not so much a shortage of money as it is time. IDEA could do a better job, and we would like to, in supporting the industry here. We have done five conferences, and we have never wavered on our commitments. We have professional and personal relationships. We would like to help, be it leadership or intermediating or clarifying. The last year or two, with all the turbulence and reorgansing, we try to be respectful, as well. Strategic issues get sidelined to handle immediate issues. It’s not easy to be so many miles away to have a finger on the pulse of the market. We would like to be the galvanising entity, because talented individuals are here. It does not have to be Rob. We are very conservative in terms of we don’t lend our name, we stand by what we say. We don’t want people to traffic on our name, because we are only as good as our reputation. One of the things that’s happened within our sector is that Climate Control Middle East has had a role, other companies have done conferences – there has been a dilution. I, for one, find it difficult to attend so many conferences.

Conferences, to us, are a means to an end. We use the income generated by conferences to re-invest in the industry. It funds lobby, communication, white papers and the Best Practice Guide. We have been around for 102 years. We are here for the long haul. Some might say, “Is it in our interest to continue?” Last year was moderately successful, but we have come to Qatar. We are not opportunistic. But with that also comes responsibility. We have to use the web site and webinars to be more functionally available. We are not shortchanging our members here, but some things need attending to, like slab tariff and the LEED issue. We would like to be working closely with IDEA members. We are staff driven, and we also utilise the tremendous expertise available. There is lot of volunteer contribution under the auspices of IDEA.

Do you think the industry here in the UAE needs large dollops of intellectual honesty in its approach to district cooling? Is it about time that consensus emerged that systems were overdesigned to capacity, say?

It’s hard to look at things in isolation. There are so many different scenarios and, hence, it is difficult to draw one over-arching conclusion. Ideal capacity today could be fully utilised two years or five years from now. I cannot speak on timing with any clarity. It’s dangerous to draw our conclusions – in some cases, district cooling development was an outsourcing strategy. At the terminal level, end-users are comparing its merits with other systems, but somewhere capital was avoided or recovered in the value of that home. In this sense, more education is needed. But these are situationally specific. It is unfortunate that there is this disquiet among consumers that they are feeling it (district cooling) is not favourable for them. The investment in infrastructure has preceded the market to some extent, and it will normalise under some normal economic conditions. It is not entirely unusually for capital projects like this to precede the market. In Dubai, so much in the market is residential with occasional residency. But I guess I can agree with those who say, “I own the property. I am not there for three months, why am I paying charges?”

It is not reasonable to compare electricity bill to delivered service. Education has not been done fully, be it to tell them about emission reduction or the impact on the grid. If end users are feeling that they are paying more and that others are benefiting, that’s unfortunate, but some of the benefits need to be articulated on an individual basis. I cannot comment on oversizing.

Will regulation help?

District cooling in the US for 40 years has been wholly unregulated. That is because, historically, in the US, it has been an option. It is a relationship between the supplier and the user.