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IDEA's 4th District Cooling Conference

The major players present their view of the sector

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Shafiq Khoori says DEWA has been one of the biggest supporters of district cooling.
Shafiq Khoori says DEWA has been one of the biggest supporters of district cooling.
Fadi Alameddine believes the current situation is more of an adjustment than a slowdown
Fadi Alameddine believes the current situation is more of an adjustment than a slowdown
The challenge is to keep surviving until the market upturn, says Antoine Stephan.
The challenge is to keep surviving until the market upturn, says Antoine Stephan.
Pekka Karmuhaki has high praise for IDEA.
Pekka Karmuhaki has high praise for IDEA.
Mohammed Maree says Corodex will shortly launch a JV in KSA.
Mohammed Maree says Corodex will shortly launch a JV in KSA.
Colin Goulding says that Saudi Arabia has a lot potential for the district cooling industry.
Colin Goulding says that Saudi Arabia has a lot potential for the district cooling industry.
Perma-Pipe has supplied material for the Burj Dubai, says Refaei Mohammed Amin.
Perma-Pipe has supplied material for the Burj Dubai, says Refaei Mohammed Amin.
Efficiency is all-important, says Michel Farah.
Efficiency is all-important, says Michel Farah.

Palm District Cooling

Shafiq Khoori, managing director

Can you provide a brief outline of Palm District Cooling’s current operations?

Palm District Cooling currently has 13 plants in operation with a total operating capacity of 260,000 tonnes. Under construction in different phases we have around 160,000 tonnes, so that will get us close to 420,000 tonnes in a year, or just over a year’s time. We have almost 200 kilometres of networks across all our developments. Obviously the pace of development has slowed down at the moment, and our focus has shifted from construction to operational maintenance, billing, customer service etc, as well as improving the general performance.

What’s the position with regard to legislation for the district cooling market here?

The industry is self-regulated at the moment. My personal opinion is that if there is legislation then consumers will be more comfortable with the tariffs that are being charged. They will know that there has been oversight and that a decision has been made that the charges made are reasonable. When there’s no legislation, people think that that it’s a monopoly and that companies are just charging their clients with the intention of making higher profits. That kind of perception stems from a lack of legislation. And rules also protect the district cooling companies as well. If you make investment into assets, you know that regulation ensures that you will eventually recover your investment. So it’s good for everyone.

What steps has the government already taken?

The move started here with Decree 22, which saw Trakhees, one of Dubai World’s licensing divisions, become a sort of regulator for developments that fall under Dubai World’s remit. The next step will be to look into the utility services provided by the developments and to consider how legislation can be drawn up.

What’s your assessment of the utility rate for the district cooling industry?

Utility rates play a role in the sense that when you introduce a new service to customers, you have to make them buy into the concept that we’re providing. The tariff model prevalent in the market here has two layers: a capacity charge and a consumption charge. With that combination, people perceive district cooling as being more expensive. They don’t understand that the capacity tariff is designed to recover the initial capital investment in plants and equipment. If they think about the tariff in terms of investing in a plant and amortising over a period of years, it’s exactly the same concept. That concept is still not clear to the market, and that’s why it’s a bit more expensive.

How important has DEWA’s role in this vital sector been?

DEWA has been one of the prominent promoters of district cooling. It has invested in a district cooling company – Empower – and we’re in constant touch with them to find out ways of working together and promoting the industry. Recently, we’ve been discussing how to introduce thermal energy storage, which will help shave the peaks during peak summer, and DEWA is currently working on a preferential tariff to incentivise district cooling players to invest in the industry. In addition, DEWA is now directing district cooling companies to use treated sewage effluent (TSE) as the feedstock for plants.

How do you see IDEA helping the local industry?

For us, and for Middle Eastern district cooling companies in general, IDEA is the ideal organisation to work with. Our industry is relatively new in comparison to the US market – so IDEA already has a wealth of experience. In particular, the organistion knows how to approach and influence policy, so we are planning to benefit from their experience and ideas, which will help us shape better legislation for this sector. As to this particular conference, we’re keen to participate and support such events, because they bring the industry together and promote it.

FlowLine Controls

Fadi Alameddine, managing director

Why are you attending the IDEA conference this year?

We are the Middle East distributor for Warren Controls, and we also distribute Hayward flow control valves as well as Ross valves. Historically, we’ve attended this conference for four or five years, and it’s a great forum to network as most of the major players are here. So it’s great to see them and understand any relevant industry trends. It’s an important way to keep our pulse on the goings-on in the sector. We already conduct business with a lot of the companies here, and of course, we’re interested in making contact with those companies who aren’t clients. There are also some interesting sessions that detail some of the problems the industry is facing, and it’s useful for us to work out how we can become part of the solution.

What challenges is the industry facing at the moment?

There is a slowdown, which has hindered the demand for some of the products that the district cooling industry uses. But Abu Dhabi is doing better than Dubai, and in general terms, I like to think of the slowdown as more of an adjustment. Now we’re looking at the normal market size and market growth for district cooling, but everyone knows that it’s a solution that continues to make sense. Qatar is faring well, with Bahrain holding up too, and KSA is a big market. All in all, we’re learning how to adjust and become better at what we do.

Are there any particular new products that you have in the pipeline?

There is one, but it’s still very much in the pipeline at the moment! But generally speaking, there’s no doubt that the need for IT technology is kicking in for every industry and it’s important for us to understand how we can adapt to bring more intelligence into the control valve sector.

Hamon Cooling Tower Company FZCO

Antoine Stephan, deputy general manager

What are hoping to achieve at this year’s event?

We’ve five or six years experience in district cooling, with more than half a million tonnes of capacity in the region. In terms of this event, it’s important to be here despite the fact that the district cooling market is not doing that well, and I am also speaking in one of the forums about saving operational expenses.

What challenges are companies facing?

Everyone in the chain is affected. The contractors are not getting the jobs, and the suppliers are finding it tough as well. So the challenge is to keep surviving until the market picks up again. So we are busy executing jobs that we booked last year, and we hope to win jobs for next year.

In which other regional countries are you active?

We have an office in Bahrain covering Saudi Arabia, and our head office is in Belgium. There are 25 other affiliates around the world, so we have a good presence everywhere.

Flowserve Naval Oy

Pekka Karhumaki, managing director

Why are you exhibiting in Dubai this year?

We are here representing one of the Flowserve companies – Naval, in Finland. We’re a manufacturer of ball valves and butterfly valves, mainly for the district heating industry, but the same products can also be used in district cooling. We are now promoting these valves in this region, partly because IDEA’s best practice guide, which was presented last year, made it very clear that the ball valve is crucial, especially with regard to underground installations.

Do you see this event as being one of the ways for you to try and penetrate the regional market?

Yes, definitely. This gives us the opportunity to meet with dozens of companies who can then by word of mouth provide us with new information about where to find the right designers, the right end-users, manufacturers etc. We’ve now been in the region for 18 months and we’re now starting to get the right picture as to which are the right players with which to deal. We can get more accomplished in three or four days here than in around three or four months of email exchanges.

Concorde-Corodex Group

Mohammed Maree, regional manager, chemicals

What is the purpose of your attendance here?

Bascially, we’re trying to share our experiences in terms of systems, equipment and technologies to treat water that will then be reused for the district cooling industry. Due to the scarcity of water in the Middle East and its high cost, we’re trying to offer some solutions that will allow for the total cost of operations for some of the companies presenting here to become less expensive. Among the products in our toolbox, we offer chemical treatment programmes. Water systems generally suffer from scaling and corrosion and to overcome such problems, we’re working with service teams who visit sites and conduct analysis. Based on these reports, we then provide solutions, which can include the application of chemicals. For corrosion, we offer corrosion inhibitors, and for scale, we offer scale inhibitors and if it’s bio-related, we offer certain types of biocides.

What are the latest technologies you are offering to the water market?

From the chemical side, we’re offering green programmes, which are much safer to handle, much safer in the system itself and much safer if there is an overdose. The chemicals are also much less corrosive, and are environmentally friendly, even when mixed with other chemicals. Due to water scarcity, we are also offering new technologies to treat TSE – this water has a lot of value in it, and we’re trying to squeeze the most value out of it.

In which other markets are you operating?

We’re very active all over the UAE and we’ve just opened an office in Oman. The same is the case in Qatar. In Saudi Arabia, we will very shortly be entering into a partnership with a large company, but as yet we have no physical presence. We’re working on something similar in Bahrain. We also have branches in Jordan and Sudan.

With regard to Saudi Arabia, how important is that market to you?

We’ve delayed a bit on the Saudi side, but we will be visiting there in two weeks to cover the final stage of opening a new facility there in a joint venture with a local company. In the UAE, we’re also just about to commission three plants to polish TSE - in Mafraq, Al Ain and Sharjah - with a total capacity of 60,000 cubic metres per day. Our industrial arm has also just been awarded a deal to assist with a massive new desalination plant in
Abu Dhabi.

Saudi Tabreed

Colin Goulding, chief operating officer

What are you doing here this week?

It’s good to see old friends and discuss various issues, as each company has its own unique problems. It’s a fiction that the district cooling market is one simple sector – it’s hugely different in terms of countries, applications and circumstances. So Dubai and Abu Dhabi have their own problems and opportunities and the same is the case in Saudi Arabia. This forum represents a great opportunity to see how different companies have dealt with different issues.

Can you give a brief snapshot of your company’s history and operations?

The partnership with Tabreed has been a great fit and we’ve now been operational for four years. However, there are difficulties – water is extremely scarce and it’s hard to come up with a plan for district cooling if there’s no water available! Water demand from elsewhere is strong, and there’s no legislative mechanism that will allow for this to happen. We started speaking to private operators, but there is still the difficulty of how to get the water transported to your plant,so it all takes time.

How is the future looking for the district cooling market in the Kingdom?

I’ve managed to convince several of the larger players that outsourcing is worthwhile, and that it’s possible to make savings
on quality, not just on cost.

Perma-Pipe Middle East

Refaei Mohamed Amin, sales engineer

Can you offer a description of your services?

We mainly manufacture pre-insulated pipelines which are used in many applications. Our major interest in the Gulf countries is district cooling. For example, we’ve supplied some of the pipes for the Burj Dubai. A lot of countries are now starting to look at district cooling because it saves energy and cost, and is also good for the environment.

What new products are you most excited about?

Our patented leak detection system is entirely unique and has been used to detect moisture and leaks throughout entire buildings. A number of buildings, such as the Louvre in Paris and DisneyWorld, are already using the product to protect computer rooms. This is not an ordinary cable – it’s a pre-insulated cable inside the pipe, which is protecting itself from corrosion as well as the pipe insulation. It also doesn’t just detect leaks, but any breaks in the line, with their location, so you don’t need to dig up the entire pipe to source your leak. It’s a time-domain reflectometry product.

Trane

Michel Farah, regional director, UAE & Gulf

What are you expecting to get out of this event over the next two days?

Last year, when we attended, we found that the best talents and the best professionals working in the district cooling sector were present at the event. Although we’ve seen that the level of business is down, we know that everyone is interested in protecting their assets and gaining efficiency. We know that the economy has hit this business in particular, but a lot of tonnage has already been installed and this needs to be kept running efficiently. The original idea behind this concept was efficiency, and this needs to be maintained. Some of the players on the local authority side are missing, which is a shame as I think they would have gained a lot .

What advice could you give to government bodies?

One of the topics being discussed is the utility rate. Although DEWA is seeing the benefits of district cooling in terms of less power being used by the grid, the tariff structure is making the bigger producers pay more. Part of the initial proposal had been that companies who were more efficient would receive a better utility rate or incentive.

How do you see the market recovering?

With regard to building new plants, we’re seeing growth in Saudi Arabia. Dubai is maturing now, and is looking at better usage of the available resource. I see some benefits, personally, in connecting the grids together. We’ve seen some major projects recently, but because they were not connected to the grid, they couldn’t pick up from plants that had excess capacity.

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