Dominic Mc Polin

How feasible is interconnection of District Cooling plants in the GCC region?

It’s feasible. We have just done it with two companies and looked at the hydraulics, so they can connect. The technical side is no problem, the issue is the business side. Once again, how does the government intervene in a business? We can bring them to the table and say, ‘Look we want to incentivise interconnection.’ Why are we interested in interconnection? Because we want to reassure people, businesses and citizens who are dependent on one company that if it fails, or if there is a bankruptcy that there is an interconnection with another system, even if it’s on a temporary basis.

It’s just a psychological feeling that there is a safety net, and these are things that are important to change the market. More than the excellent engineering and increases in efficiency, these are wonderful things, but unless those things are passed on to the consumer, there will be no change. The biggest thing is the reduction in the capex, because developers do not pass on the savings of the difference between District Cooling and conventional cooling. They take that savings, and all of the capex is in the tariff, so you have this capex-distorted tariff for District Cooling to citizens and businesses. So, we want to share the savings. What are those savings? You avoid building a substation, for example. That’s a big savings to a developer. You avoid all the cabling, the electrical mechanical equipment you normally install for a conventional chiller. That’s an enormous saving. You want to share that saving with the District Cooling to bring the capex down to make that tariff attractive.

You discussed the importance of regulation and government intervention. What should these regulations target?

There is a range of targets. First of all, you can do inefficient District Cooling, so we don’t want to have District Cooling with inefficiencies, we want energy efficiency, and we want some kind of price control to consumers.

From our perspective, the most important thing is that we are giving our land, our streets to a District Cooling company. Our vision is to make District Cooling a normal member of the infrastructure family. What does that mean? It means that you’re in a street, you have a building, you have electricity, water, sewage and District Cooling – it’s a member of the family, it’s a non-thinking thing, it’s there. And in order to do that we have to open our streets to District Cooling, as opposed to masterplan project-driven District Cooling. Our vision in Bahrain is to have a general accessibility to District Cooling. To do that, you have to have transparency at a very high level, because, why do I choose you over that company? What is my criteria when I allow one? I can’t allow 10 companies, there is not enough space – it doesn’t make sense. So, when you are choosing to allow into your public roads a particular company, you have to have a set of rules, a set of rights and responsibilities and a transparency in making that decision – and that’s really at the core of this. We cannot get that level of District Cooling unless we have those rules in place.

But there are a lot of complexities surrounding identifying these rules. Who are the stakeholders that should take part in making these rules?

Well, I’ve had over 140 hours of stakeholder consultations with developers, with customers and with the industry, trying to get a balance into these draft regulations, and I think we have achieved that. Customers, District Cooling companies, government, developers… do you know what they all have in common? They all want regulation.

We have gone through a consultation period, as I said, with master-planners, with District Cooling companies and customers. We believe we have got fair and simple regulations to address the whole spectrum of those issues.

How far away are you in the process of implementing these regulations?

It has to go through the political process. I am presenting, I’m pushing, and I’m hopeful.

Stakeholders we have spoken to have often complained that the existing District Cooling framework does not incentivise retrofits and energy savings, because doing so would affect the Delta T and lead to potentially millions annually in penalty charges. Could you comment on that?

We have a potential to make meaningful changes and do really important things, quickly. We lose if we leave it to the marketing department of a District Cooling company. As government, the answer is, ‘No way, this cannot be.’ If we are to take our commitment seriously – and those commitments are clear, we have signed on to COP 21 – we have major commitments made.

We have introduced in Bahrain a National Energy Efficiency Action Plan and the National Renewable Energy Action Plan. In the Energy Efficiency plan, District Cooling is there. Whether companies like it or not, it’s part of the package, and we are determined to get more District Cooling quicker and satisfy our consumers.

How would you gauge the level of progress District Cooling has made in Bahrain as well as in other countries in the GCC region, in general?

It’s not fast enough, it’s too slow. We need more District Cooling, and we need it faster, and one last thing we have introduced is cost-recovery tariffs, which is helping advance its adoption. The electricity is now full-cost-recovery for expatriates, commercial and Bahraini second homes. Same with water.

District Cooling has always had difficulties because of the price differential. Now, hotels are looking for solutions for energy efficiency. Obviously, it’s helping the government save money, and it is creating a market for District Cooling. We just want to give it a push.