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Why Governments Should Support District Cooling

With the right mind-set and regulations in place, district cooling can offer numerous advantages over conventional cooling in the Gulf region.  The technology has essential advantages for densely populated areas with a heavy demand for air-conditioning. District cooling is more cost efficient over the long term than conventional cooling systems, it is also more reliable, more energy efficient, and has less negative environmental impact than typical approaches to air-conditioning.

The rapid growth in the gulf region could see district cooling save the economy substantially with regards to energy consumption and associated costs.   However, power prices are excessively low, making it harder to see the benefits of district cooling, creating the mind set that district cooling is a viable choice only in high density areas.

District cooling can appear as a costly asset to developers due to the initial investment costs, which results in failure to appreciate the advantages of the system.  However regulatory bodies can eradicate these hurdles by recognizing district cooling as a utility.

If regulators were to designate suitable regions for district cooling, with sufficient density, and include the technology in the urban forecasting this would eradicate the developers’ apprehensions.  In addition, tariffs would need to be regulated to ensure fairness amongst the developers and end users.  With such resolutions district cooling would be able to focus its cost-effectiveness and sustainable solutions to support the regions cooling needs.

Developers mistakenly believe that district cooling works economically only at very high densities.  Developers identify fewer benefits than if cooling costs were based on the actual cost of power. This effect is impaired when residents pay a lower tariff for electricity than for district cooling utilities, which is the case in some GCC countries. This in turn leads to investment decisions that are economically inefficient.

The approaches developers use to pass on cooling costs to end users make district cooling appear affectedly expensive, making conventional cooling look more appealing. Resulting in a system that in fact saves money for the user comes across as being expensive because of different methods to cost reclamation.

Governments should establish a consistent national tariff structure for district cooling. Defining the allocation of up-front, recurrent, and consumption charges to developers, property owners, and tenants. Governments will have to impose the regular use of such charging policies across projects. In particular, these policies must protect individual owners and tenants. The charging polices should seek to align the charges paid by users with actual cooling consumption.

District cooling offers significant benefits to the region as it plans for an increasingly metropolitan future. The technology provides environmental advantages, comfort, operational efficiency, and cost advantages over other cooling systems.

However, governments need to take resolute action to gain the rewards of district cooling and ensure that the commercial benefits are cascaded equally from the Master developer down to the end-users. The long-term potential capacity and energy savings alone validate the governments involvement to prevent this important technology from being under utilized as the region’s economies grow. By treating district cooling as the utility, it is, incorporating district cooling into metropolitan planning, and taking an active role in its future, governments can allow this technology to play its part in the development of the region.