Rumblings of discontent are surfacing in the UAE’s district cooling sector as the new staggered tariff structure for electricity recently implemented by several emirates starts to hit operating costs and customers’ pockets.
District cooling providers are now petitioning the authorities for special dispensation on the basis that their technology ultimately saves energy and reduces network loads.
According to statistics, district cooling uses 40-50% less energy than traditional air conditioning systems, which can account for as much as 70% of a building’s electricity bill. Producing one tonne of refrigeration using conventional air conditioning takes 1.7kw of power, while district cooling can consume as little as 0.85kw per tonne.
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But as the cooling is generated in centralised plants rather than in individual units the sector is now classified as a heavy consumer and its electricity is charged at the higher tariff. That means AED0.33 per kWh rather than AED0.20 per kWh.
Some district cooling firms have already begun passing on this increase to customers. And end-users have now started questioning how economical district cooling really is.
But there is flip-side to this story. District cooling also consumes vast amounts of water. And most plants are run on desalinated potable water. Desalination is an expensive process, the real cost of which is not reflected in the emirates’ cheap water rates. The charge to industry is just AED0.04 per gallon. Furthermore, desalting water also requires a lot of power.
So, if the district cooling industry wants to play the energy-saving environmental card then isn’t it about time they addressed this wasteful use of precious water?
Alternative water sources exist such as seawater, grey water and treated sewage effluent. The technologies exist to employ them. But sadly a lack of enthusiasm to use them also exists due to the higher capital costs involved.
When it comes to water usage, it seems the environmental advantages are ignored in favour of profit.
Let’s hope this electricity debate triggers a rethink on the sector’s water consumption, otherwise district coolers may find their pleas for lower electricity bills fall on unsympathetic ears.
Elizabeth Bains is the editor of Utilities Middle East.
