Recommended Rules for District Cooling (DC)

Regulation of DC started to enjoy the issuance of latest Executive Resolutions  ; and the breeze of regulating such vital industry started to create hopes within few concerned parties.

DC is a business which is in its nature a monopoly type due to the following facts :

1-The service requires quite large service corridors. A service corridor of a width of 3 meters is required to lay a double pipe network. Once a particular District Cooling Service Provider (DCSP) lay its network , there will be no more space within the service corridor to lay another network for another DCSP.

This condition itself secures the business for the first DCSP who lays down his network first for long period and almost eliminate the opportunities for a second Service Provider to establish the business in the same community which uses the same service corridor ,

2- Communities being assigned for District Cooling service , in general , planned to have the electricity capacities based on the demand but excluding the power needed for air conditioners ; this is itself , as the above  , creates another monopoly condition .

Once a Building is connected with a low electric capacity , it is not easy for it's developer to apply for excess of power should the developer decided to terminate the service of District Cooling ; nor it is possible to contract the service of another Service Provider for the reason stated above.

So the business , as described above and as it is practiced in general in the GCC  , gives almost no freedom to the second Party of the Agreement to terminate the agreement or contract the service of other Service Providers .

While the main beneficiaries are mostly different governmental authorities and heads plus the Developers ; it is expected that the Regulation of such business is a jointly effort with all the stakeholders , and real beneficiaries, so that the  interested beneficiary is expected to exert the necessary effort to secure its benefits from the service of DC  and accept a stake of the capital cost according to its benefits values .

A- Main Stakeholders of DC Services :

1-Utilities :  

Electric Power Authorities are the main beneficiary of DC due to :

Less power which leads to :

1. Future planning for fewer number of power stations/substations
2. Fewer main cabling from substations to main developments , communities , large towers,..
3. Less fuel to be contracted .
4. Lower load during the peak hours; and therefore , less complains expected .

which are assumed as a result of  introduction of the DC service .

2-Environmental Authorities :

Due to the less power requirement , less carbon emission 

3-City Planners  : 

DC Service requires considerable infra structure planning to accommodate enough space within the Service Corridors to  lay down the 2 pipe system .

4-Energy Councils : 

1. Energy Councils are expected to take a major part in planning for the DC Service since the DC Service is expected to contribute to the goals set for the Future Energy Outlooks.
2. Energy Councils are expected to assure governments of the actual(net) energy saving from the planned technologies . 
3. Energy Councils are also expected to conduct field comparisons with currently proven technologies which might contribute with the energy saving from different alternatives , particularly the Renewables whose utility-scale parks cost have declined so sharply during the last two decades and is continuing in its decline trend .

5-Government Financial Heads :

Governmental Financial Heads/Advisors are the authorities who direct/advice  the major governmental expenditures and investment after carefully examining different scenarios  intended for the benefit of the  government and the people.

6- Master Developers/Minor ( Single Building) Developer :

The DC Service provides opportunities for the Developers (Master  or Minor ):

1. The HVAC system would eliminate the need for the chillers and its        associated electric power demand.
2. The roof would be a useful venue for few panoramic features/ events/..
3. Aesthetic  Architectural Facades : With the introduction of DC Service , the architecture would not be limited for the usage of the roof . The roof , without installing the conventional chillers , will be an element where the architects can  integrate with the façade to the desired aesthetics of the whole building .

B- Benefits Assessments 

The benefits of the DC service should be assessed by  ; by  technically qualified team  who endeavor to  make assessments for the realistic benefits after reconciling all related issues. 

C-Data Sharing 

Sharing of operational data should be legislated instead of being kept undisclosed .

Operational Data will help the Energy Council to better understand the realistic potential of energy saving.

D-Cost Allocation/Sharing 

- Capital Cost is ,proposed, to be shared with the authorities who see considerable benefits from deploying the service of DC.

- Consumption Cost , proposed ,to be passed to the Customers/End Users assuming that it is the same or less than the conventional systems operational cost unless extra benefits are expected .

E- Network Title  

Since the limitation of the infrastructure which does not allow for more than network to be laid ;

It might be suggested to , improve the freedom of choice of the Master Developers,  to keep the title of the network under Utilities Authorities or the Master Developers themselves .

Main Beneficiaries of DC :

While , in the current practice , the Customers/End Users are the only one who pays the bills of the DC Services ; it is recommended to keep the main beneficiaries contribute with some , if not all , the capital investment .

Main Beneficiaries : 

- Utilities ( Less power consumption , lower power station loads/size, less cabling to each single development/Building/facility/..

- Environmentalist ( less carbon emission due to less power demand )

- Master Development Investors

- Building's Developers (DC creates advantage of more architectural designs and modern façade which are hard to achieve in case the conventional HVAC were installed . 

We excluded the Customers/End users because :

Customer/End User  is the only Party who pays not only the cost , but also is being the main Party who are affected by the limitations that the DCSP imposes in the relevant agreements . 

It would not make any difference if the cooling is provided by the conventional cooling systems or by DC Service ; therefore , the Customers/End Users are not necessarily beneficiaries who looks for the service .

The idea of listing the above beneficiaries is to propose the  list of parties who , as a proposal , suppose to contribute in  the capital investment of providing DC services and leave the consumption charges to be paid by the Customers/End Users .