A silent revolution

District cooling is big business and a key part of the future of a developing region, argues Tom Daly.
By Tom Daly
Wed 01 Aug 2007 12:00 AM

Many people are still not familiar with district cooling, even if it is a part of their daily lives. With water being chilled off-site at central plants and the pipes which distribute it usually underground, there are few visible clues as to what is quietly doing its job of keeping a building cool, with the familiar air conditioning units nowhere to be seen.

The GCC provides an ideal market for this burgeoning utility. With energy costs increasingly a source of concern for businesses, district cooling is gaining ground because of its reduced power consumption - some 40% less than conventional air conditioning systems, the region's largest consumers of electricity.

This also means less power infrastructure is required, so property developers tend to have little hesitation in opting for it. And nowhere else is the property sector experiencing such a boom as in the GCC, and in the UAE in particular.

By the time the latest wave of UAE mega-projects open for occupancy, there will be a massive installed district cooling capacity on hand to meet their cooling requirements.

"The real estate activity in the UAE far exceeds that of other countries in the Gulf region," said a report compiled by Eric Chang of The National Investor (TNI) in Abu Dhabi earlier this year. "In 2005, the UAE accounted for 45% of projects under construction in the GCC and 65% of the total value of real estate projects," it added.

Total installed district cooling capacity in the UAE is expected to reach 4 million tonnes of refrigeration (TR) by 2012 at an annual growth rate of 63%. In 2005, the figure was 130 000 TR. In the GCC as a whole, total capacity is expected to reach 9.6 million TR by 2010.

As a further point of comparison, the total installed capacity for North America is around 700 000 tonnes, according to Ahmad Bin Shafar, CEO of district cooling provider Empower - and the Middle East will streak ahead due to its rate of construction and hot climate. It is thus in a position to be the global focal point for the industry.

The International District Energy Association held its first, and perhaps overdue, conference outside of the United States in Abu Dhabi, in January of this year, and will return to the UAE on October 28-30 for a symposium in Dubai.

"Previously we were trying to learn something from their experience. Now, I think it is time to flip the coin," said Bin Shafar.

If they didn't know already, visitors will no doubt learn how lucrative investing in district cooling in the Middle East would be. But with the dominant players already emerging - and strong tie-ups between property developers and cooling providers already in place - they might just wish they had signed up earlier.

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