Cooling solutions market heating up

The Middle East is heavily dependent on air conditioning systems, with industry insiders agreeing that up to 70 percent of the power used during peak times can be attributed to air conditioning systems. But Qatar hopes to lead a revolution in the way the region views such systems through the development of a number of new projects – including the Pearl-Qatar’s new district cooling plant, developed by Qatar Cool.

“Very few people know what happens behind the scenes to bring chilled water to their building or apartment, and it's our responsibility to increase that awareness. We definitely need to open up more.”
-Fayad Al Khatib

Qatar Cool was officially established in 2004 after UDC identified a strategic opportunity for a utilities company that would supply district cooling - the wide area circulation of refrigerated water - to Doha's burgeoning real estate developments. "District cooling systems have become the preferred infrastructure solution, especially now that most government leaders and developers are advocating more sustainable energy techniques to optimise energy efficiency and conserve natural resources," says Qatar Cool's General Manager, Fayad Al Khatib.

Here, Al Khatib talks to MENA Infrastructure Senior Editor Ben Thompson about the benefits of district cooling - and why more must be done to raise awareness as to its potential.

District cooling was described as the world's best-kept energy secret at the recent IDEA conference in Doha. What benefits does district cooling offer?

Fayad Al Khatib. It really offers great benefits. It offers a solution to what we call in our industry the three Es; environment, energy and the economy. I'm sure you're aware of the environmental challenge we face today and in the future in terms of how to address the issue of reducing emissions; district cooling addresses that. In terms of energy reduction, the energy used in our industry compared to conventional cooling technologies is much lower. And then in terms of the economy, it also addresses the issue of cost. If you compare our models over 20 years, it is a lot more beneficial for the end-users to go with district energy.

To say it is the world's best-kept energy secret is an understatement; it is actually one of the best-kept secrets even within the energy sector itself.

The fact that it is such a well-kept secret suggests there's a lack of awareness as to the potential of district cooling. So why do you think these benefits aren't more widely recognized and acknowledged?

FAK. We talk a lot about communication, and one of the important things is that the people who drive district energy or district cooling are usually engineers or finance people, and are not necessarily the best communicators. They are technically-minded; they think about getting things done, they think about how we're going to finance this, how we're going to meet our production and customer requirements. And a lot of times communication is forgotten or dropped.

I was at a district energy conference recently and I asked the attendees there where they advertised. Most of them replied that they advertised in engineering or climate or energy-related magazines; very few of them, if any, had ever advertised or spoken to a magazine that appeals directly to the end users or the consumer. Of course, if we were being smart we would all take a picture together and try to get on the front of TIME magazine to talk about our industry. People need to know who we are and what we're about. Very few people know what happens behind the scenes to bring chilled water to their building or apartment, and it's our responsibility to increase that awareness. Right now we focus on speaking to technical and financial specialists; these are the people that we like to deal with. We definitely need to open up more.

One of the things you did recently to help drive greater publicity was inaugurate your district cooling plant at the Pearl-Qatar. Perhaps you could tell us a little bit more about the vision behind this plant?

FAK. The Pearl-Qatar plant is the largest district cooling facility in the world, and its genesis was driven largely by the fact that the Pearl-Qatar Island was created as a sustainable development. In order to be a sustainable development, they needed to come up with a sustainable solution to meet the cooling needs of the island. And through intensive research and planning at the early stages, they soon found that district cooling was the only solution that could enable them to do that.

In our industry we measure capacity by tons of refrigeration, and this plant is capable of producing 130,000 tons under one roof. It is actually designed to be two plants under one roof so that if, God forbid, we have an issue on one, the other side is there as a back up. However, the way I like to describe our service is that we have a single plant serving multiple networks. The island itself is divided into two precincts, and each precinct has a network, so we serve multiple networks from this one plant. In other such developments they have multiple plants serving a single network or one plant for a single network, but on the island it's unique in that this plant actually serves multiple networks. And that gives us huge advantages in terms of the three Es that I mentioned earlier.

So what challenges did the plant construction and the infrastructure network rollout present from a technical point of view? Obviously the Pearl-Qatar is a greenfield site, so were you able to build your designs into the masterplan from an early stage?

FAK. The most important thing is planning. This cooling plant required us to have a proper design process, proper equipment and proper resources, all of which take planning. I would say the biggest challenge has been resource management, because you're talking about managing construction materials, equipment and workers, as well as suppliers from all over the world, and making sure they're all coming to the island at the right time and they do their job with zero mistakes to avoid any setbacks.

Human resources is one of the most important things we have to manage. We have to make sure that our team - consultants, contractors, our employees, our stakeholders - all realise that when we want to deliver a service it has to be ready. So we needed to make sure that we were ready to meet the various phases of the development on the island, and that if the client asked for service in any part of the island we were ready to provide it. As such, our teams understood that they had to construct and operate at the same time, and actually we were very successful at that. As I say, most of the challenges were overcome by proper planning upfront. We worked through them and I hope that our clients were satisfied as a result.

What benefits will the plant bring to the residents of Pearl-Qatar?

FAK. When you take a district cooling approach, there are a few benefits that the end-user feels right away. There is an immediate saving in terms of space, and the aesthetics will be different because you don't have bulky A/C units on the roof or outside on balconies or in the yard. In fact we've actually received many compliments from villa owners about using this form of cooling because now these outside areas are being converted to terraces and party areas. There is also no noise with this equipment and no vibrations, and so those benefits were felt right away.

Another thing that end-users appreciate is that they don't have to worry about operation or maintenance of any air conditioning units; all they need to worry about is changing or cleaning the unit filter when needed. For the eco-aware clients, there is also the satisfaction that they have contributed to reducing their impact on the environment. And of course the last thing I would like to mention is the economic benefits over the life of the service. District cooling would definitely be more economical for the residents of the Pearl-Qatar.

Clearly there are huge advantages of using district cooling. So what are your plans for further expansion of the district cooling network in Qatar?

FAK. The system in the Pearl will only serve the island, and the capacity is specifically designed to serve that level of demand. So if we need to go outside of the island we have to expand. The only area we serve outside of the island from that plant is the Lagoon Plaza development, which is across the island. But we also have a system in West Bay that's currently operating as well. We have a large network in West Bay area and two plants connected to it, and we're looking at ways to expand into other areas.

We talked about the importance of being involved in the planning process from an early stage, and partnering with the various authorities, planners, utilities, environmental agencies, developers, and so on. So what approach does Qatar Cool take to such partnerships and how has this helped you in achieving your goals?

FAK. We believe in coordination and cooperation, and we believe in engaging partners early in all of our projects. So far it's brought results because the issues or requirements get put in front of everybody at an early stage, everybody pitches in, everybody works together, and the approach has been very successful in both West Bay and the Pearl-Qatar. At the end of the day, we need successful collaboration between everybody responsible for the project to allow us to deliver the service to our clients on-time and to budget.

District cooling is a pretty capital-intensive industry. And while I know that Qatar has not been impacted as heavily as other markets in the region, credit markets are still tight and the cost of capital finance remains high. Where will the funding for such initiatives come from?

FAK. As with other aspects of the project, the key for project financing is to have sound financial planning. If we plan upfront what it is we want to achieve, how we're going to achieve that and what we need to do to drive revenue, then the funding becomes very easy. If you have a solid plan in front of you, the investors will be more than willing to invest and that's where we have actually succeeded in bringing funding in.

As private sector actors, we really need to make sure that we partner up with the public sector. Right now it's very important that the private and the public sector collaborate on such projects; that's where we really need to be going. And I think the Pearl-Qatar district cooling project is proof that such partnerships can be very successful.

What lessons have you learned from other similar projects around the region, as well as further afield?

FAK. I think the most important thing we learned is that the engagement of all stakeholders from an early stage, even the end-users, is key. If you think about any project, the best way to approach it is to make sure that you address the end-user's requirements from day one and work backwards from there, instead of building something first and then looking at how it addresses the issues. So engagement of all stakeholders in the early stage of the process is very important. And partnerships, as I mentioned, are also essential. Without end-user engagement and true partnership, district cooling can never become a viable solution.

And were there any particularly good examples of other plants or projects that you took inspiration from?

FAK. We are part of an international group, the International District Energy Association. And all the members have been very helpful in allowing us access to their information to learn from what they have achieved. So we've discussed our industry a lot with regional providers, providers in North America and in Europe as well. And actually, one of the key things that we learned is the need to build our plants to suit actual demand, not anticipated demand. I think that was a very important lesson for us.

And so finally, do you think Qatar is poised to become a leader in district cooling? What needs to happen for that to become a reality?

FAK. Absolutely, I think we can. Qatar has a proactive approach with a long-term vision, and the combination of these factors will help position Qatar as a knowledge-exporter in the district cooling field. The experience we're gaining right now will allow us to become a leader in district cooling and not only serve our local market, but also export our technology. And I think other countries can definitely benefit from our experience.