Strategy& touts the energy-saving GCC solution to keeping cities cool

16 August 2019 4 min. read
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As swathes of Europe and the US have wilted under a severe heat-wave this northern summer, analysts from Strategy& say that countries should look to the Middle East for a solution to help ease the growing energy burden.

Consecutive heat-waves across Europe this summer have seen Belgium, Germany, Luxembourg, the Netherlands and France all break their all-time highest ever recorded temperatures, with Gallargues-le-Montueuxin the latter pushing out to almost 46 degrees Celsius. The UK fell just short of joining the list, while numerous other city and national monthly records have also fallen, including in Paris – a metropolitan area which is home to a population of more than 12 million.

As just one consequence, the added strain on the energy grid is enormous, as struggling citizens turn to their air conditioners for relief – which, say George Sarraf, Christopher Decker, and Jad Moussalli of Strategy&, is a unique solution, as it perpetuates the very problem it solves.

District cooling diagram from here

As the planet warms and it prospers, more people demand air conditioning. This leads to greater carbon dioxide emissions, further warming the planet and intensifying the demand for air conditioning.

But the Strategy& leaders have a partial solution: district cooling. Writing in Strategy&’s thought leadership and management magazine Strategy + Business, the trio – who are all based in the UAE – say that city-planners can look to the Gulf as an example, where district cooling is already in use today and doesn’t require radical advances in underlying technology. Indeed, district cooling, which treats the provision of cooling as a utility, isn’t a technology, but rather an approach.

“In district cooling, a single centralised plant pushes chilled water through a distribution network to multiple buildings, which can tap into it according to their needs,” the authors explain. “Each building has its own heat/cooling exchanger and uses the chilled water to provide cooling, as needed, to different types of occupants with different demand schedules: offices during the day, restaurants in the evening, and apartments in the early morning.”

Experts in energy and utilities (Sarraf is the Managing Director of Strategy& in the Middle East with 25 years of consulting experience in the energy industry, while Dekker serves as a principal with expertise in utilities and infrastructure among other areas), the author’s claim that district cooling can deliver power consumption reductions in the range of 60 to 80 percent compared with the average conventional cooling system.

According to Sarraf et al., district cooling already accounts for between 15 and 25 percent of cooling capacity in GCC countries such as Qatar and the UAE, with the firm’s analysis showing that the use of district cooling where appropriate (naturally, it is most effective in high-density areas) to meet future demand could reduce the total energy required for cooling by 16 percent – leading to a massive US$1 trillion+ in energy savings worldwide through 2035.

“The IEA has called for increasing the efficiency of traditional air conditioning systems through interim measures such as minimum energy performance standards, better building designs, and stricter building codes. Although improved energy efficiency is necessary, it likely will not be sufficient on its own,” the authors state. “This approach is akin to focusing on the fuel efficiency of gas-powered cars, rather than considering newer options such as electric cars.”

So the drawback? The establishment of district cooling requires significant coordination and planning among multiple stakeholders, along with large, up-front investments, centralised management, and considerable regulation. But here’s where the GCC countries can provide an example, having already amassed the critical expertise and developed the commercial, legal, and technical regulatory frameworks such as those that are in place for electricity and water utilities.

“As developing countries face growing demand for cooling, leaders have to look beyond merely improving the energy efficiency of existing technologies,” the authors conclude. “The GCC’s early start in the adoption of district cooling makes it a model for what is possible. By learning from what has worked well in the GCC, developing countries will be better equipped to meet increased cooling demand while also increasing their energy efficiency.”