1

Importance of district cooling in demand side management landscape of Dubai

Dubai Supreme Council of Energy

HVAC-R Expo, 26-29 November 2018

2

DSCE has set a strategic direction to achieve power and water savings

DIGS = Dubai Integrated Gas Strategy, DSM = Demand Side Management Strategy, CAS = Carbon Abatement Strategy

DIES 2030Integrated

Energy Strategy

DSMStrategy 2030

Efficient demand

DCES 2050Supply from

clean sources

DIGS 2030Supply of

natural gas

CAS 2021Low Carbon

Economy

3

Dubai Integrated Energy Strategy (DIES) 2030 sets direction on energy mix and demand management

Regula

tory

Fra

mew

ork

Executi

on

DEWA DM RTA ENOC DUBAL

DPE DNEC DPA DUSUP

Electricity consumption savings:

30% by 2030 vs. BAU

Water consumption savings:

30%by 2030 vs. BAU

Targets:

DIES

2030

Solar energy share:

25%by 2030

Clean energy share:

75%by 2050

4

Our level of DSM ambition is comparatively the highest in the world

5

DSM Strategy 2030 drives Dubai to become a role model in energy efficiency

Building

regulations

Building

retrofits

District

cooling

(DC)

Standards &

labels for

appliances &

equipment

Water

reuse and

efficient

irrigation

Outdoor

lighting

Power and

water tariff

rates

Demand

response

Shams

Dubai

8 DSM Implementation Mechanisms

Institutional setting

and capability buildingGoverning by example Information systems Financing mechanisms

Policies and regulationsTechnologies and

studiesPublic awareness

Measurement

and verification

2 3 4 5 6 7 8 9

1 2 3 4

5 6 7 8

Efficient cooling is crucial to achieving energy efficiency on Dubai level and the DSCE has asked

innogy to recommend an optimal support mechanism to drive efficient cooling, specifically DC

retrofits

9 DSM Programs

1

6

Results in the first phase of the strategy are encouraging for continuing forward

7

Cost savings

8

Electricity Savings and contribution of DSM Programs (TWh, 2011 to ’17 actual, 2018 to ’30 target)

| Page 8Source: DSM Program Owners, TAQATI analysis. Savings from Program 8, Shams Dubai are not reflected in the % Contribution of DSM Programs as no targets have been set for P8

Targets Savings

65%+ savings from

other programs

TWh

Savings from DEWA

Tariff Reforms

1.5 1.6 1.3 1.2 1.62.2

2.93.7

4.55.4

1.5 1.7 1.7 1.9 2.32.8

3.3

19.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030

12.0

Initial savings from DGBR,

ESMA Reguls and Retrofit

Targets

100%91% 83%

71%

29% 25% 22% 24% 24%

56%42% 34%

14%18%

43%41% 39% 29% 22%

32%40%

38%

10%13% 15%

18%18%

2%

5%4% 4%

9%

5%

3%13% 16% 17% 20% 27%

7% 10% 16%5%

2012 20182011

8%

4%

20202013 2014

4%

2015 2016

6%

2017 2019

5%7%

2025 2030

% Contribution

of DSM

Programs

1. Building regulations 3. District Cooling

7. Change of Tariffs Rates2. Building retrofits

6. Outdoor Lighting

4. Standards and labels

8. Shams Dubai

+6.8%Savings vs. BAU +7.6%

9

Buildings are in focus of our policies as they represent a large percentage of overall energy consumption

Share of electricity and water

consumption in buildings

Electricity consumption

Total

energy

consumption

80% Share of HVAC in building

electricity and water consumption

HVAC in buildings

Building

consumption

70%

10

P3: District cooling within DSM Strategy 2030

KEY INITIATIVES

• Issuance of regulations to support

the adoption of District Cooling

penetrations

• Awareness program in support of

District Cooling adoption through

increased dialogue between

developers, District Cooling

operators and customer groups

• Desalinated water conservation

through use of TSE provided by

Dubai Municipality for District

Cooling applications

18%

11

Overview of district cooling in Dubai

Central Cooling Water Cooled, 7%

Central Cooling Air

Cooled, 25%

Variable Refrigerant Flow, 2%

Ducted Split/ Packaged Units, 30%

Split Units/ Windows AC, 18%

District Cooling,

18%

0.88 0.931.07

1.42

1.621.73

District Cooling Central Cooling Water Cooled

Variable Refrigerant Flow Central Cooling Air Cooled

Ducted Split/ Packaged Units Split Units/ Windows AC

Cooling technologies market (2015), RT Cooling systems efficiency (2015), kWh / RT

• DSCE mandated RSB to regulate and supervise the DC sector, with aim to promote more efficient methods of cooling, targeting penetration of 40% of DC by 2030

• Savings can be achieved by better chiller operating regime, smoother load profiles, better O&M practices and sub-metering of end user consumption

• Ongoing efforts on aligning the DC market end-prices for consumers with other cooling technologies in order to ensure a win-win for both providers and end-users

12

Significant savings can be achieved through HVAC by utilizing both technical and policy measures

Technical

Quick wins With investment

Can be addresed at zero or low

cost:

• Turn HVAC units off when there

is no cooling demand

• Optimize temperature/humidity

settings by area

• Minimize heat gain in summer

• Minimize ventilation rates

More complex areas requiring

some capital expenses:

• Preventive maintenance

• Insulation / draught-proofing /

shading

• Implementation of variable speed

drives

• Upgrade of cooling systems with

new tech

Policy

• Mandatory cooling codes with respect to

buildings/industries and minimum energy performance.

• Improving energy efficiency of existing buildings

through target setting and roadmap establishment.

• Improved energy performance of building components,

appliances and systems via introduction of star rating

for appliances.

• District cooling regulation and associated minimum

energy performance.

Government is leading by example - all government buildings are mandated to adjust temperature to 24 °C during and 27 °C after office hours.

Green procurement will be introduced to further promote implementation of „green” HVAC.

13

DSCE is looking into governance of cooling in Dubai

Cooling market main stakeholders map

DEWADSCE/

RSB

DevelopersAsset

owners

FacilityManagers

District Cooling

providers

DM/RERA

TechnicalConsultants

ESCOcompanies

A B C

D E F

G H I

60

40

20

0

80

2030

Total demand: 83.6 TWh

Cooling demand: 41.2 TWh

DC savings: 3.4 TWh

DC retrofit savings: 1.5 TWh

DSM savings: 19.2 TWh

DSCE has concluded a study in governance options to ensure cooling demand is a focus for creating savings in upcoming years.

Overview of potential by 2030

14

Within the study, DSCE has identified challenges in both the cooling efficiency and the real estate market

• Perceived high cost of DC

• Low market awareness

about cooling solutions

• Retrofit teams focusing

mainly on non-DC

• Difficult access/

no corridors

• Inefficient

building design

• Over consumption

• Short term

investment horizon

• Tennant-operator-owner

dilemma

• Cooling capacity

over-design

• Existing DC over-capacity

• Inefficient chiller operation

• Usage of non-TSE water

• Low incentive to achieve

efficiency (billing agent)

Cooling Real Estate

15

A tentative roadmap has been designed and presented to main cooling market stakeholders

Y1 Y4Y3Y2 Y5

• Establish DSCE DSM Cooling Committee

• Develop and launch a DSCE Cooling Directive

• Establish a dedicated cooling agent

• Launch and manage the “Dubai Cooling Map” platform/database

• Annual stakeholder engagement and awareness campaign

• Integrate cooling across stakeholder strategies

• Review cooling regulation and licensing criteria

• Integrate holistically in the DSM Strategy review

(preferably 2018, by no later than 2019)

• Establish efficiency standards and reporting scheme for cooling

• License consultants, facility managers (O&M) and billing agents

• Launch impartial and binding complaint resolution mechanism

• Develop masterplan for long term efficient cooling in Dubai

DSCE is continuing to look into best practices and aligning with stakeholders on best way forward.