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GCC to benefit from district cooling as demand seen to triple
Published in The Saudi Gazette on 26 - 07 - 2012

JEDDAH – Today, air conditioning in the Gulf Cooperation Council (GCC) accounts for a staggering 70 percent of annual peak electricity consumption. Such heavy cooling demand is expected to nearly triple by 2030. By then, the fuel needed to power air-conditioning in the GCC will be the equivalent of 1.5 million barrels of oil per day.
In light of this, management consulting firm Booz & Company has identified that, if implemented under the right conditions, district cooling could effectively serve 30 percent of the region's cooling requirements by 2030.Perfectly catered to densely populated areas, district cooling offers a more cost-efficient and eco-friendly solution for the GCC - and one which can only thrive through market reforms.
If it maintains its existing pattern of cooling technology deployment with heavy reliance on conventional cooling technologies, by 2030, the GCC will have to invest approximately $100 billion for new cooling capacity and over $120 billion for new power capacity. Over the next 18 years, air-conditioning will account for 60 percent of additional power generation required in this part of the world.
However, there is an alternative option. By pooling demand for air conditioning, district cooling is significantly more cost effective over the long term than any other system currently being employed at the individual building level. "It also has less negative environmental impact than conventional solutions," said George Sarraf, partner with Booz & Company. "With these countries likely to urbanize further in coming decades, district cooling could save them from investing considerable sums on new power stations."
At present, district cooling is one of three main systems used for air-conditioning in the region. The two others include conventional window units or split systems as well as central air or water-cooled chillers. In contrast to those systems, district cooling is decentralized, and involves central plant supplying chilled water through a network of pipes to multiple buildings within a local area.
"In district cooling, the network entails an important additional cost which, on a "per-user" basis, decreases with increasing real estate density, and can be offset by the higher efficiency of the system," said Walid Fayad, partner with Booz & Company.
By offsetting network costs, district cooling provides three main advantages:
1. Lower energy requirements: Thanks to more efficient chiller technology and more professional O&M, district cooling typically consumes 40 to 50 percent less energy for every refrigeration ton hour than conventional in-building technologies.
2. More efficient capacity use: District cooling typically needs around 15 percent less capacity for the same cooling loads than distributed cooling systems at the unit level due to load diversity and flexibility in capacity design and installation.
3. Peak-period saving potential: District cooling offers a thermal storage capability that can reduce the strain on the power system at peak hours by storing up to 30 percent of potential output.
However, the system is, by no means, a universal solution to cooling.
Based on existing development plans and estimated density patterns, district cooling could play a particularly important role in the future of GCC countries.
According to an analysis by Booz & Company, by 2030, consistent use of district cooling in the region could lead to:
• A reduction of 20 gigawatts in new power capacity requirements - the equivalent of 10 large power plants.
• A reduction in the GCC's power plant fuel consumption equivalent to 200,000 barrels of oil per day.
• A region-wide decrease of 31 million tons per year in CO2 emissions
"From a qualitative perspective, district cooling offers a more reliable service because of on-going professional operation and maintenance," said Tarek El Sayed, Principal at Booz & Company. "Also, the system is quieter than conventional cooling systems and more visually appealing as it is located remotely rather than on the roof of a building."
Current market structures in the GCC make it difficult to recognize and capitalize on the benefits of district cooling. "In many cases, power prices are overly low, making district systems appear competitive with conventional cooling systems only at high levels of cooling density," said Simon-Pierre Monette, Senior Associate with Booz & Company. "Moreover, property developers often fail to appreciate the advantages of combining their cooling demand and are wary of the technology as it requires significant initial investment." – SG


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