Pal Technology’s claim to fame is that its plant on Reem Island is an example of a measured approach to district cooling at the height of the construction boom in the UAE …

In the UAE district cooling landscape, the Pal Technology-engineered Reem Island district cooling plant (DCP) is a rarity. Though, with a footprint that can accommodate a capacity of 90,0000 TR, inclusive of 70,000 TR of chillers and 20,000 TR of thermal energy storage (TES), the DCP has an installed capacity of only 45,000 TR, which has minimised idle capacity for its owners. Following a soft launch, the DCP has been running at 20-25% of its installed capacity. B Surendar spoke to Sheraz Siddiqui, the Projects Director at Pal Technology, and Masood Raza, the Head of Engineering, on the district cooling scenario, in general, and the plantroom, in particular. Excerpts…

What does the road ahead look like for the district cooling industry?

Sheraz Siddiqui: In 2006, at the time we started out, we saw district cooling as a viable solution and as something that would lead to a significant reduction in the consumption of electricity and operating costs, plus benefits from an end user point of view and for the environment from a carbon footprint point of view.

The way district cooling was done was not right, though. We saw projects over-built to capacity. Today, the modelling of district cooling, the way the rates are structured, is not right – it is more expensive than conventional cooling systems. But with small changes, district cooling can be back on track. We do firmly believe that district cooling is the long-term solution.

How would you back your statement?

Sheraz Siddiqui: In a conventional building, the cost of air conditioning is built into the construction and paid as rent. When you don’t take that charge, you charge them separately for cooling to compensate for capex. In the case of a standalone system, the user is paying for the FCU and, on the face of it, not for the chillers, which is being paid by the owner. The point is, the building owner is somehow charging the tenants for the chiller.

Masood Raza: Things are beginning to look up for district cooling. There is a change in thinking, and the developer seems to be agreeable to bear the cost of piping network. This is a step we have taken – we are educating the developer that it is to his benefit.

Sheraz Siddiqui: We have spoken to a number of developers, and they are taking the piping network into their infrastructure costs, so it becomes a development cost.

Masood Raza: A standalone chiller in a building is running in a very inefficient manner, because it is air-cooled, but the tenant does not feel it, because it is included in the monthly rent; and without his knowledge, he is paying more for it than he would be, in the case of a district cooling system.

Plus, the fact that district cooling saves on power consumption, swings things in its favour. The Reem Island project is an example; if it were not for district cooling, the demand for electricity would be much more than what it currently is.

Do you think the industry has resolved its water needs? What’s the situation at Reem Island?

Sheraz Siddiqui: We are not using treated sewage effluent (TSE) in the new buildings, owing to lack of occupancy. We are using potable water at the moment, but the design is suitable for TSE. We also have a condensate-recovery system, which has the capacity to yield an estimated 8-12% of the required make-up water at peak conditions.

What kind of efficiencies are you getting?

Masood Raza: We are getting part-load efficiency but not as planned. If the plant were running at 40-50% at least, we would get efficiency, but currently, it is running at 20-25%. We have 60% connected load but no occupancy, because the buildings have not been delivered yet.

Is hydraulic balancing an issue?

Sheraz Siddiqui: Hydraulic balancing is not an issue, because the velocity is not so low. But sometimes, we have to supply at low delta T, and that’s the inefficiency we were talking about. The only solution would be to get the occupancy up, which is not in our hands.

What’s the solution to the issue of over-estimating to capacity?

Masood Raza: During the boom period, district cooling was a third party and, sometimes, not given enough importance. Bodies like DEWA and ADWEA always build over capacity, but then they are government-subsidised entities; district cooling, on the other hand, has been a private entity.

In Norway, the government took up ownership of the district energy system from the inception, and once a mechanism for O&M and metering and billing had been established, passed on the responsibility to private players. Couldn’t this region try a similar approach?

Masood Raza: Government ownership is not an answer, but government partnership is good. In a partnership, the benefits that the government is getting from district cooling should be passed on to private players. When electricity demand load is peaking up, every authority is paying a very high cost to accommodate it. We in the district cooling industry are shaving the peak demand, which means the authorities should pass on the benefits to us. Government ownership will likely lead to inefficiency.

This has been discussed ad nauseam, but I would like to hear from you all the same how the government can support the industry.

Masood Raza: The issue is that the villa owner does not want to see a hefty bill at the end of the month. The villa owner does not want to pay on time for district cooling services provided. If he does not pay his electricity bill on time, then he is faced with the threat of disconnection of services, which is not the case with district cooling. A villa owner will get electricity at a subsidised rate, five fils, whereas we have to pay 15 fils. So while he is looking at only five fils, we are forced to pay more for electricity, which raises the cost for providing district cooling. This is because we don’t get subsidised rates.

What role can a body like Estidama play in this?

Sheraz Siddiqui: Estidama is making it mandatory to achieve energy efficiency, so there is an opportunity for district cooling. Let’s take the example of a 400-square-metre villa, where it will cost AED 35,000 to install split units. But with Estidama on board, the villa owner cannot install split units, owing to energy-efficiency concerns and also due to ozone restrictions. A VRV for a villa of the same size will cost AED 120,000.

District cooling is in the business of sustainability and energy efficiency, and we can step in and make use of the opportunity created by Estidama. Thanks to Estidama, the playing field is even. It is up to us to be energy efficient and give benefits to the end-user.

In 2006, at the time of starting, we were convinced that district cooling is beneficial, and we had several plans to give several additional benefits.

Masood Raza: We are a youthful company with a lot of out-of-the-box thinking. In 2006, we aimed for the concept of self-sufficiency, be it power or water. We wanted to establish a power regimen and also a sewage treatment plant. But the way things evolved, we couldn’t go ahead. At one stage, we learnt it (Reem Island) was prime land, so we couldn’t have land for power and water regimens. At that time, the scenario involved several tall towers, so we factored in CHP (combined heat and power) and TES (thermal energy storage) and estimated a 1ºC requirement, but then came the height restrictions – no building can be taller than 75 floors – and so we have had to settle for an 4ºC approach.

Considering the slowdown in new construction, are you considering introducing district cooling in existing building neighbourhoods?

Sheraz Siddiqui: We are considering Abu Dhabi mainland, as well. We are, in fact, working on it and, at the moment, things are at a discussion phase. We have to consider several factors. Abu Dhabi is already suffering with infrastructure-related roadblocks, so if at all anything a distributed-cooling approach would be viable.