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District Cooling Vs. Chiller Units: Which one is better?

Amid the rising focus on air quality and reducing carbon emissions, a list of initiatives is being launched by various governments across the globe to improve air quality. Their efforts are laid towards reviving their respective countries from the catastrophic effects of climate change. District cooling systems can play a decisive role in curtailing the emission levels, ensuring better air quality, and fostering a healthy environment.

Demerits of Traditional Methods of Cooling on Environment

Natural resources are running out quickly. There is an urge to preserve them for future generations. Unfortunately, the traditional methods of cooling consume a lot of invaluable resources which makes them unsuitable despite being a cheaper option.

Some of the demerits of traditional methods of cooling are:

Excessive Water Consumption

Water consumption is the prime consideration made during the selection of chiller units. The chiller units and other traditional methods consume a lot of water and thus get subjected to state regulations surrounding the reduction of water consumption. Exceeding the limits of water consumption can attract hefty penalties. 

Global Warming

Chillers units and other conventional methods of cooling require refrigerants to perform the cooling process. These refrigerants contain harmful chemicals that contribute significantly to global warming. Refrigerants absorb infrared light and trap it in the air which leads to a steady increase in temperature, and a decline in the quality of air. Traditional methods of cooling such as air-conditioning use Chlorofluorocarbons (CFCs), and Hydrofluorocarbons (HFCs) as cooling agents in the air conditioners. This increases the holes in the Ozone layer and contributes immensely to global warming.

High Power Consumption

Chiller consumes significantly high power for its operations which also shoots up the company’s energy bills. Furthermore, there is a huge amount of environmental cost associated with chillers. Due to high power consumption, the chiller releases additional carbon emissions from the power plant which increases the pollution level and degrades the quality of the environment. The assessment for power consumption and carbon emissions must include the chiller and its ancillary equipment such as pumps. 

Air conditioners also require a significant amount of energy for their operations and therefore release pollution. On average, air conditioners consume between 3000 to 5000 watts of electricity every hour. Air conditioners consume even more energy when it is warmer as extra power is used to cool the building. They are not only a costly-affair for the businesses but also have adverse effects on the environment.

Pollutes the Environment

Air conditioners have adverse effects on the environment. The ducts in the air conditioner collect dust and bacteria every time it is turned on which is very unhygienic and toxic for humans, especially for kids and the elderly.

The Use of Plastic is Detrimental

Earlier, the air conditioner manufacturers used to manufacture them with metals, however, with rising costs,  they switched to plastic, which is much cheaper. Although the use of both plastic and metal in the manufacturing process is bad for the environment, the use of plastic is far more detrimental as it is non-biodegradable and releases carbon dioxide into the atmosphere, and also causes the greenhouse effect.

How Does District Cooling Overcome these Challenges?

District Cooling is indeed a blessing in disguise in meeting Middle East cooling requirements and leading the region towards sustainability. It is far more energy-efficient, reliable, and environment-friendly compared to the conventional methods of cooling. District cooling systems (DCS) are instrumental in providing buildings located in serviced areas with distributed chilled water for convenience and to perform cooling. 

District cooling curtails the higher maintenance cost for the building owners and occupies very little space. It is far more efficient to produce chilled water in a central plant rather than using in-building equipment to minimize the adverse effects on the environment.  

Although the energy-saving from using a district cooling system differs according to its configuration such as heat rejection method, length of distribution pipeline, and plant efficiency improvement schemes, an estimated cost a building owner can save from the implementation of DCS is between 20% to 35% compared to conventional air-conditioning systems and individual water-cooled air-conditioning systems using cooling towers.

The district cooling system offers advanced processes that lead to almost 40% of energy efficiency improvements and more than 20% of lifecycle cost savings in comparison to the traditional air conditioning systems. DCS minimizes the extortionate maintenance and capital cost and reduces the demand on the grid. The conventional systems of air conditioning create 50% to 70% of the peak electricity demand in the building specifically at a very high cost. Building owners can curtail the electricity cost by avoiding the peak power demands on the grid.

Cost Difference: District Cooling vs Chiller Units

District cooling is one of the most popular methods of cooling due to its environmental benefits. It is widely used by firms, tenants, and owners at homes, retails spaces, offices, or any other available area. The prime difference between the district cooling and chiller-free is majorly the choice afforded by tenants. In the case of Chiller-free properties, tenants usually do not pay for air conditioning. Whether to choose district cooling or chiller-free depends on the choice and aim of the tenant. If the tenant is looking for an economical or cheaper option, undoubtedly chiller-free is the better alternative.

In Dubai, the district cooling cost is segregated into consumption charge and demand charge. The consumption charge is calculated depending on the usage captured by the meter of the unit at the building or premise. It is billed at a rate of AED 0.568 fils per Refrigeration Ton (RT) per hour. The demand charge is billed to the tenant, owner, or company for providing District Cooling Service to the apartment/unit at AED 750/ RT per annum. 

Here is the breakdown of District Cooling Charges:

The average monthly cost of using a district cooling system in Dubai is between AED 775 – 800 for the first owner in the first year. From the second year, it is between AED 625 to 670 per month. Here is the breakdown – 

  • Yearly Demand Charge: 6 RT (The RT load of the A/C of the unit) * 750 = 4500 AED per annum  
  • Monthly Demand Charge: 4500/365*31 = 387.50
  • Meter Maintenance Charge: AED 50 for 3 Months or AED 30 per month
  • Connection Charge:  AED 2000 (It is a one-off charge payable by the first owner of the unit at the time of registration) 
  • Administration Charge: AED 1000 (It is also a one-off charge payable by the first owner of the unit at the time of registration) 
  • Disconnection Fee:  Residential Units: AED 1000, Retail Units: AED 2000
  • Meter Testing fee: AED 160
  • VAT: 5%
Cost of Chiller charges: 

The yearly cost to a consumer for using chiller units is between AED 4000 – 5000 which comes out to AED 334-420 monthly. It is almost half of the cost of district cooling. The key components of the bill include

  • Consumption Charge: It is calculated according to the meter reading as per the usage. It will be charged at Dhs 0.568 fils per RT (refrigeration ton) per hour.
  • Demand Charge: It is a recurring yearly charge. It is around AED 750 per RT/ annually. It is billed quarterly in advance.
  • Fuel Surcharge: This charge is levied on the bill due to a rise in fuel prices. It is 6.5 fils / kWh.

Where Does Dubai Stand in District Cooling?

In the last few years, Dubai has emerged as the single largest market for district cooling in the world. The city accounts for 20% or one-fifth of the market share of all the cooling demand. Dubai supplies 600,000TR at peak capacity. There has been a shift of global policies towards energy conservation and billions of dollars have been invested in finding out novel ways to maximize efficiency and minimize the wastage of energy. 

Dubai is also planning a 30% cut in the usage of energy and water consumption by 2030. District cooling is an integral part of the city’s nine programs under an umbrella topic of Demand Side Management. Leveraging the benefits of direct cooling, Dubai is targeting a two-fold increase in its percentage market share and to deliver 14% of the 2.7 TWh of yearly targeted savings in power demand. Through a program of regulatory framework development, Regulatory and Supervisory Bureau for Electricity and Water (RSB) Dubai is planning to involve and encourage the private sector in energy supply and efficiency savings.

Predictions

With the rise in development and expansion activities in the region, the demand for district cooling is expected to surge at an exponential rate. As per the studies conducted by the global consulting firm, Booz & Co.(Former name of Strategy&), the total demand for district cooling in the GCC in 2010 was only 36 million Refrigeration Tones (RT). However, with rising population, industrialization, and economic expansion the demand for district cooling will increase almost three-fold to 100 million RT by 2030.

Abu Dhabi Department of Energy (DoE) also reveals that district cooling systems will have a very minimal impact on the environment compared to air conditioning or other traditional methods.