Market Insight

GCC District Cooling Market

District Cooling Installed Capacity by

Country
District Cooling Installed Capacity in
the GCC By Country
100% = 3.9 Million TR

In 2014, United Nations

Environment Programme (UNEP)
identified Dubai, Doha and Kuwait
City among the 45 'champion
cities' for district energy use
around the world.

Dubai has developed the world's

largest district cooling network,
providing 1 million TR and is
aiming to achieve 40% of its
cooling demand through district
cooling by 2030. Its total cooling
demand in 2030 is estimated to be
27.6 million TR and DC is
estimated to supply 11.0 million
TR in Dubai.
Increasing the use of Treated
Sewage Effluent (TSE) instead of
fresh water in district cooling
systems is also a stated aim,
although there is no set target for
this so far, but could be 20% of
capacity

Rest of GCC
Qatar

15.0%; 4%
37.9%; 10%

Saudi Arabia

107.0%; 27%

229.3%; 59%
UAE

Source: Frost & Sullivan analysis

District Cooling Installed Capacity by DC

Operators
District Cooling Installed Capacity By
Operator
100% = 3.9 Million TR
Other
Independent DC
Plants
0.95; 24%

1.00; 26%

0.65; 17%
Other DC
Operator
s

0.96; 25%
0.34; 9%

Emirates District Cooling

(Emicool), which operates six
plants in Dubai, plans to
increase its capacity by over
50% to 500,000 TR by 2020 to
meet the expected demand
from development related to
the World Expo in Dubai in
2020.
Tabreed operates over 60
district cooling plants in the
UAE, KSA, Qatar and Bahrain.
The market is highly
competitive, although there is
scope for capacity increase.
In the absence of pertinent
regulation, DC operators in the
region have sought to reduce
capital cost. This can potentially
result in DC companies adopting
dual systems where thermal
cooling will supplement the
electrically driven vapor
compression chillers to meet the
Source:
Frost & Sullivan
analysis
peak cooling
demand
in an
environmentally friendly
3
manner.

Total District Cooling Market Planned

Capacity Addition
Total District Cooling Market Planned
Capacity Addition, Year-on-Year (Based
on new project announcements
expressed in Cooling TR
314,250

265,050

142,000

25,000 36,000
2015

2016

2017

2018 2019 - 2021

During the recession, the UAE had

witnessed high vacancy rates,
leading to a number of DC projects
being put on hold. However, these
have now been reinitiated, though
with revised capacities and
different chiller configurations.
Many independent DC plants for
Universities, Airports etc. are
coming up in the near future.
New plants to be completed in
Worldand
Expo
2020
Dubai, FIFA
2019
2020
areinexpected
to be
World Cup 2022
announced
soon.in Qatar and the
Economic cities of Saudi Arabia
have brought in positive investor
sentiment and encouraged new
real estate developments.
Governments ambitious targets to
reduce electricity consumption are
driving forces behind the
announcements for new DC plants,
like Kuwait University plant (32000
TR capacity), Abu Dhabi Airport
Expansion plant

Source: MEED Projects and Frost & Sullivan

District Cooling Market GCC - Drivers

Impact:
Low

Market Drivers

1-2years
Cost and energy efficiency
advantage over
conventional cooling

3-5
years

6-10
years

High

Medium

Impact on
Thermal based
cooling

Energy and Environment

Conservation focus by the
regional Governments
Growth in Infrastructure
Development
Source: Frost & Sullivan analysis

The regions infrastructure developments are fuelling the demand for cooling
solutions. The market is poised to accept new and efficient technologies to reduce
energy consumption across any consumption source, and government led initiatives
would facilitate this over the long term. We are of the opinion that the Dubai
Integrated Energy Strategy and KSAs 10th Development Plan (2015 2019) could be
drivers.
However, DC operators are currently depending on other alternative methods of
energy savings for peak-shaving, such as Thermal Energy Storage (TES). This is seen
as an alternative that could reduce the potential demand for thermal based solutions
which would compliment an existing centrifugal chiller system.
DC systems provide higher energy and cost efficiency than conventional systems. This
savings benefit is what has led to the success in adoption of DC in the region. We see
this as a key factor that could further contribute towards thermal based solutions if a

District Cooling Market GCC - Restraints

Impact:
Low

Market Restraints

1-2years

Inability to capitalize on
retrofit opportunities

3-5
years

6-10
years

High

Medium

Impact on
Thermal based
cooling

Dependence on cooling
density
Low electricity tariffs in
the GCC
Risk of early investment and
slowing down of
government spending

DC market in the region is at cross roads between scaling-up and increasing energy
efficiencies. We have seen instances in the GCC where the DC operators have not been
able to efficiently connect buildings to their networks mainly because of non-aggregated
developmental plans. This has hampered the growth and expansion of district cooling in
the region. We see thermal assisted cooling as an opportunity/ driver for DC plants to
look at marginally reducing their dependence on cooling density to operate efficiently.
Low electricity tariffs have been one of the other big hurdles to the DC market. These
have continued to support the case for conventional cooling , presenting low capital
investment and no dependence on cooling density. With tariffs now witnessing a removal
of subsidies, we see a potential upswing in the market
A potential slowdown in government spending could also present a threat
Source: to
Frostdistrict
& Sullivan analysis
cooling, given its high upfront capital cost. However, this needs to be observed longer for 6

Value Chain Analysis

Suppliers of Chillers, Pumps, and other
components
Procurement of chillers,
AHUs, and other
components
Design Build Operate (DBO)
Contractor (EPC

construction Services and O&M Services)

District
Cooling
projects for
large single
segments
such as
airports,
universities

Constructi
on and
O&M
services

Consultants
Design &
technical
specifications,
Project
management

Universities,
Airports

DC Operators
Cooling services
agreement

ResidentialCommercial Other mixed

use
Other cluster
development
Customers

EPC: Engineering, Procurement, Construction; O&M Operations &

Maintenance

Source: Frost & Sullivan analysis

Key Stakeholders in the Value Chain

DC Operators
Tabreed
Empower Energy
Solutions
Emicool
Palm District Cooling
Emaar district
cooling
City Cool ICCC
Tekneen District
Cooling
ADCCO - Arabian
District Cooling
Company
United Cool
S and T Cool District
Cooling Company
Qatar Cool

DC
Consultants
Atkins
DC PRO Engineering
Crown Engineering
Consultancy
Allied Consultants
Mott MacDonald
AECOM
Ramboll
Stanley Consultants
Pal Technologies
Parsons Corporation
Hyder Consulting
ADPI Designers &
Planners
CV Tec Consulting
Engineers
Fittons Engineering
Consultancy L.L.C.
Suhaimi
DesignProtecooling

DC
Contractors
Drake & Scull
International
Samsung Engineering
Kharafi
Shinryo Corporation
ETA Ascon
Saudi Binladin Group
ADC Energy Systems
Arabian Bemco
Contracting
Stellar
TAS
SNC Lavalin
Hyundai E&C

Source: Frost & Sullivan analysis