UAE district cooling market to grow at considerable rate through 2027: report

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The UAE district cooling market is likely to witness significant growth through 2027, propelled by climate conditions and increased infrastructure spending, according to a recent report published by Graphical Research.

Many businesses in the region are adopting district cooling systems due to the associated cost-efficiency and long-term service. District cooling systems use 50% less energy than air conditioners, thereby decreasing initial capital investment and maintenance costs. The equipment can operate smoothly for up to a 30-year span, enhancing technology adoption.

District cooling is ideal for large-scale establishments in UAE such as airports, commercial buildings, university campuses, and residential towers.

UAE district cooling market is estimated to witness significant growth across the industrial sector on account of growing applicability of cooling systems in oil & gas refineries and production and manufacturing plants.

With temperatures rising and greater emphasis on sustainability in UAE, these systems will complement the industry outlook.

Rapid industrialisation, urbanisation, as well as rising energy prices will stimulate the UAE district cooling industry across the residential segment, the report stated.

Technological enhancements will upgrade the overall capacity of prevailing cooling plants and ongoing construction activities.

During 2020, Empower awarded a construction contract worth $44.65mn (AED164mn) to build its new district cooling plant in Za’abeel with a total cooling capacity of 50,000RT, which will be interconnected with the company’s existing district cooling plant in DIFC to deliver a total cooling load of 112,000RT.

Empower has also awarded contracts worth $51.73mn (AED190mn) for the construction of its fourth district cooling plant in Business Bay, Dubai.  The new plant will deliver 50,000RT, increasing the total cooling capacity of the Business Bay project to 350,000RT, making it the largest district cooling project in the world consisting of six district cooling plants upon completion.

UAE district cooling market participants obtain cold water for business operation from oceans, seas, rivers, lakes, and other waste cooling energy sources, which is transferred to urban establishments via DC system networks. The technology facilitates easy cooling production technique, low operational cost and an inclined customer base, which will foster the technology demand.

Robust construction activities, projects, and company partnerships for technological advancement across the country will further boost the district cooling market outlook in United Arab Emirates.

Unlike other markets which faced negative impacts, or delays in operational activities due to government restrictions and lockdowns imposed to prevent the spread of COVID-19, the UAE district cooling industry witnessed almost minimal to no delay in operations, due to strong project pipeline industry.

Another reason why these cooling systems are gaining popularity across UAE is their feature to be located remotely, enhancing real estate value by freeing up additional space for other operational purposes, accelerating the operational efficiency of businesses and powering district cooling market growth.

Prominent market players operating across the UAE district cooling industry include National Central Cooling Company (Tabreed), Delta District Cooling Services, Veolia, Emicool, Empower, Siemens, and ARANER.

Major strategies adopted by the companies include inorganic development, M&As, technical partnerships, as well as product portfolios.

For instance, in May 2021, Tabreed partnered with Deloitte and SAP for data analytical and operational improvement, helping Tabreed gain real-time insights on its assets.

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