Warm-up act

DEWA MD, Saeed Al Tayer

Simmering tensions in the district cooling industry between the profit motive of the larger private players and the need to be socially responsible came to a head in the form of some lively discussion at the recent IQPC District Cooling Summit 2009 held at the Arjaan Rotana in Dubai.

The major issues confronting the industry “are too important to be left to the marketing department of any big company,” was one of the blows struck by Dominic McPolin, chief planning officer at the Central Planning Office of the Bahrain Ministry of Works.

“This is the most exciting and relevant industry in the region, but what is the way forward? It is clear that the market cannot be the only industry determinant. It is all about regulation. It is all about intervention in the market. The district cooling market is crying out for attention and support,” argued McPolin.

He questioned whether the needs of the government and the market are indeed aligned. “To regulate or not to regulate, that is the question. We do not just want regulation for the sake of regulation; it must be meaningful to the market as well. In terms of energy efficiency, district cooling is irresistible, as it cuts power demand by half. Therefore it represents the biggest and quickest win-win scenario for all concerned,” said McPolin.

Ultimate question

However, one delegate described the debate about the need to regulate the market as a ‘warm-up act’ for the ultimate question raised in the dying moments of day two, when the floor suggested that a representative body be formulated to put together a convincing case and present this to government, and DEWA in particular.

“The government cannot hope to solve the problems of the industry without engaging in constructive dialogue and discussion with the major players. It is possible that regulation will be beneficial in this regard, but we as an industry need to reach consensus on this issue and then present our case to the authorities,” said Tabreed COO Khaled Salmin Al Kawari.

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The summit opened with DEWA MD and CEO Saeed Al Tayer, delivering the opening address, reiterating that, in accordance with Decree 27 issued by Sheikh Mahommed in September 2008, all district cooling companies would from now on:

• Use thermal storage facilities in all new installations; and
• That desalinated water could no longer be used, and must be replaced with sea water, grey water or treated sewage effluent (TSE).

Global best practice

“District cooling companies are expected to implement these requirements immediately, which constitute global best practice, and thus contribute to preservation of the environment and the efficient utilisation of valuable available resources,” said Al Tayer.

“While district cooling systems are efficient on the electricity consumption side, they are consuming a huge quantity of water in cooling towers. Taking into consideration that the main source of water in Dubai is desalinated water, these systems are saving energy in one process while consuming at least a part of it again in another process.”

At the end of the summit, Al Kawari lamented the fact that Al Tayer was unable to engage with the industry players represented there as to such issues as differential electricity tariffs to make thermal storage more viable. “It is clear that electric-driven chillers using potable water are out. How will the industry take into account the seriousness of this issue?” questioned Al Kawari.

Paradigm shift

John Roberts, a director and head of energy strategy at Arup, said the obvious implication for developers was a paradigm shift. “Developers are becoming utility providers, with energy efficiency being the key driver,” he said.

This was precisely why Decree 27 had been promulgated, said McPolin, as the UAE was burdened with having the highest carbon footprint per capita in the world. “This is terrible, and clearly untenable, but district cooling provides one potential answer to bringing our energy consumption down,” said McPolin.

“The fact that electricity in the region is subsidised by the government means that energy is cheap. Therefore it is not the consumers who are concerned about energy efficiency, but the government and the producers, who are burdened with the consequent financial liability.

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