The construction of a district cooling system

Technical, Commercial and Social aspects play a significant role in developing public utility solutions such as a District Cooling (DC). It is crucial for developers, providers and contractors (builders) to consider those aspects before constructing a DC system. What are they?

District Energy is the centralization of utility services to serve several load points within a community, a neighborhood or a city. The most common form of District Energy in the Middle East is District Cooling (DC). This is a result of the relatively high ambient temperatures observed in the region.

The most common application of District Cooling in the Middle East is Air-Conditioning with fewer industrial applications. District Cooling plant sizes range from 25,000 TR (Tons of Refrigeration) – 100,000 TR per plant. Those larger chilled water plants are built in order to provide a more cost effective cooling solution to the development overall.

Technical, Commercial and Social aspects play a significant role in establishing a commercially sound and environmentally friendly Cooling solution. Technically, design parameters such as chilled water temperatures, estimated cooling load requirements, diversity, and space limitations are dictated by the end user's application. Location of the plant and plot availability dictates the plant layout and the optimum pipe network design. Defining the temperature design parameters influences equipment selections for the District Cooling Plant (DCP) & its overall efficiencies. Power, Water and other Utility services needed for the plant has a significant impact on the choice of technology to be used for the DCP's; for instance, using Treated Sewage Effluent vs. Potable Water for heat rejection may make or break the feasibility of the whole DC concept.

As all these factors are site specific. Special attention should be taken while determining how, where & why a DC solution is right for a development. A change in one parameter may possibly influence the complete design and its feasibility. An example would be power supply voltage. If power is supplied at a higher voltage than what the equipment is rated for, either the equipment has to be altered or additional components has to be added to reduce the voltage to the desired level. This will impact space requirements, plant layout, equipment selections and plant performance.

Commercially, Capital & Operational Expenditure analysis is a standard exercise conducted for every DC project. Such an exercise is not independent of the Technical and Social aspects. The priorities of DCP owner's must be identified at the concept stage of a development. DC providers may share the business model in one way or another with developers, provided they share same sets of priorities,. In some cases, different projects for the same DC owner may have different commercial priorities and thus understanding the DCP Owner's commercial situation is paramount to selecting the right technology for a DCP.

The nature of the development being high-rise, villas, commercial, residential, industrial or a mix carries a lot of weight to the commercial viability of the DC solution. The anticipated utilization, its timeliness and its cash flow assurances play a major role in the analysis of this utility provision. Finance and bankability of such projects dictate the IRR's of such projects and thus its "go" or "no go" decision process.

Socially, the impact of DC projects is as important as the Technical and Commercial aspects. Most often developers neglect this aspect and end up with certain challenges that hinder the execution of a DC scheme. A typical challenge is end users or individual plot owners acceptance to the DC concept. More often than not, plot owners and end users in the Middle East prefer to have their "traditional" own independent Air Conditioning units instead of connecting to a chilled water network.. They would be seeing the smaller picture and not the big one as far the city, district or country. The environmental advantages of DC solutions are hard to read for some; but are of great importance to all of us.

Utilizing DC solution, a district, a city or a county in the Gulf environment would consume less than 50% of its air-conditioning power demand and around 30% less of its overall power consumption.

Water Consumption:

Water is a scarce resource in the Middle East region. And while water cooled DC Systems come with significant power savings, they consume water for heat rejection purposes. However, there is an alternative. Sewage Treatment Plants and Networks to provide DC Plants among other systems with Treated Sewerage Effluent (TSE) water instead of Potable Water are definitely a viable alternative as TSE is quite abundant. Of course, until sufficient  TSE Network systems are in place , DCPs are being designed to operate on potable water, TSE or combinations of both.

Using Sea Water (SW) is also an option that coastal cities are considering. The challenge with this approach is the increase in SW temperatures which could have negative environmental effects on marine life and long term effect on ambient conditions. Once through cooling towers are a solution, however, the challenge is the high capital cost associated with SW intake & treatment systems.

Thermal Energy Storage (TES):

With the increase in DCPs in the Middle East, DC System performance enhancement becomes more relevant. One of the approaches to increase DC system efficiency is the inclusion of Thermal Energy Storage in the DCP. This will allow stable operation of the system and will reduce overall operational costs. However, TES is only relevant if the load profile of a plant allows for it plus an on-peak / off-peak utility rate which will motivate DCP owners to include TES.

Decentralization of District Cooling Plants:

Although District Cooling is based on "centralization" of utility services, the current tendency in the market is to de-centralize large capacity plants into several small size plants ranging from 2,500 TR - 10,000 TR. This is in an effort to reduce capital cost by building smaller plants and smaller chilled water networks, and also mitigate the risk of realizing load which is dependent on real estate and or industrial occupancy.

Contract Forms for Constructing a District Cooling Plant:

Traditionally, the Middle East market is used to following a Designer / Contractor approach where DC Owners will hire a consultant to provide a detailed design for the District Cooling System (DCS) and then commission a contractor to construct the plant. While some owners still use this approach, the market is now seeing proven alternative models such as EPC (Engineer, Procure and Construct), D&B (Design and Build), or DBO (Design, Build & Operate). We believe that the EPC model is the efficient & expedient approach to District Energy Systems, namely for the following reasons:

• One Company is responsible for both design and construction of the project.
• There is a reduction in the delivery schedule by overlapping the design and construction phase of a project, which is under the control of the EPC contractor.

Conclusion:

• District Cooling is a highly customized solution that requires evaluating Technical, Commercial and Social aspects prior to selection of a specific technology.
• Although the Middle East countries share similar ambient conditions (in general), each country or location will have its own issues that relate to power, water, sewage and land availability.
• Thermal Energy Storage is a recommended addition to District Cooling Plants. However, without the correct load profile and utility rates, minimal benefits can be achieved with TES, if any.
• Correct technology selection and form of contract are key to achieve an optimum solution for any District Cooling System.