District Cooling In Qatar

Practice, Challenges & Regulatory Interventions

Presented by Engineer: Ibrahim Mohammed A Al SadaManager: District Cooling Services Department Qatar General Electricity & Water Corporation - KAHRAMAA

▪ District Cooling Practice in Qatar.

▪ District Cooling Benefits to Qatar.

▪ District Cooling Suitable Areas in Qatar.

▪ District Cooling Challenges in Qatar.

▪ District Cooling Regulation In Qatar .

▪ Advice for countries with scarcity of Water.

Key Points

Water & District Cooling

Water is life

District cooling is consuming large quantity of water

In gulf region the fresh water is precious

Air Conditioning Electricity Bill

Conventional Air- Conditioning Electricity Bill is High

District Cooling Can Cut Air Conditioning Electricity Bills by Half

District Cooling Practice in Qatar

6

District Cooling in Qatar served by two major District Cooling services providers

Qatar Cool

• Established & Operated In 2003.

• 3 Central Plants in West Bay area(107,000 TR) & 1 in Pearl Qatar(130,000TR)

Marafeq Qatar

• Established & Operated in 2012

• Central Plants in Lusail City (to be 300,000 TR by 2022) and Barwa City (37,000 TR).

Number of Private District Cooling Systems

• Like Qatar Foundation ,Cultural Village (Katara),Al GassarDevelopment, four season hotel, Qatar University etc

Qatar District Cooling Market

Operational District Cooling Projects

SN Operational District Cooling ProjectsInstalled Cooling

Capacity (TR)

1 Qatar Foundation Central Plants 142,000

2 The Pearl Qatar 130,000

3 Hamad International Airport 45,000

4 Barwa Village & Commercial Avenue 37,600

5 Qatar Cool - West Bay 2 37,000

6 Qatar Cool - West Bay 1 30,000

7 Qatar Cool - West Bay 3 40,000

8 Hamad Medical City 20,000

9 Msheireb Doha project 16,700

10 The Sports Club -Aspire Logistics 14,200

11 Qatar University Central Plants 24,000

12 Al Gassar Development - St Regis Hotel 10,000

13 Cultural Village – Katara 10,000

14 Villagio Mall 7,500

15 Sheraton Hotel 6,250

16 ALWakrah Hospital 6,000

17 Doha Convention Center 10,000

18 Ritz Calton Doha 2,600

19 Hamad General Hospital 2,000

20 Doha Festival City & IKEA 21,800

21 Four Seasons Hotel 5,000

22 Mall of Qatar 30,000

23 Sidra Hospital & Research Center (Qatar Foundation) 18,000

Total 665,650

Under Construction District Cooling Projects

SNUnder Construction District Cooling

Projects

Expected Cooling Capacity

(TR) - 2022

1 Lusail City - Marafeq 336,600

2 Internal Security Forces (ISF) Camp 30,000

3 QP District Project 30,000

4 Doha Oasis Mixed Use Development 20,000

5 Al Arabi sports Club 15,000

6 North Gate Mall 11,750

7 New Doha Zoo 13,000

8 ALWatania Steel Company 13,000

9 Salwa Beach Resort Hotel 12,000

10 Chlorinated Paraffin Waxes 10,000

11 AL Gharafa Mall(Ezdan Mall) 10,000

12 The Cost Guard Base Project 10,000

13 City Center Mall Najma 8,000

14 Al Khessa Mall (Boulverad Mall) 8,000

15 Qatar Academy at Al wakrah 7,000

16 Utility Building & Car Park (Diwan Amiri) 7,000

17 Kamal Mixed Use Development 6,000

18 Gulf Chlorine 5,000

19 Supreme Education Council Headquarters 5,000

20 World Trade Center 3,290

21 QNM 3,000

22 Sidra Staff Housing at Qatar Foundation 2,000

SNUnder Construction District Cooling

Projects

Expected Cooling Capacity

(TR) - 2022

23 Al Duhail Mall (Tawar Mall) 6,250

24 Al Sadd Sports Hall & Al Sadd Multi Purpose Hall 6,700

25 Lusail Multipurpose Hall 4,600

26 Arab center For Reserch & policy stuides 2,000

27 Al Gharaffa Sports Club 2,000

28 QPMC Bulk Handling Terminial 1,000

29 Naufer Project 3,000

30 AL Rayyan FIFA World Cup Stadium 16,000

31 Al Wakrah FIFA World Cup Stadium 16,400

32 ALKhor FIFA World Cup Stadium (AL Bayt) 27,720

33 Khalifa FIFA World Cup Stadium 70,000

34 Lusail FIFA World Cup Stadium 55,000

35 Precinct 4-FIFA World Cup 16,000

36 Precinct 5-FIFA World Cup 14,500

37 Qatar Foundation FIFA World Cup Stadium 21,800

38 Qatar Foundation Central Plant 9 20,000

39 Qatar University Central Plant (CUS 4) 25,000

40 Al Wajbah Palace 4,500

41 Milaha Logistics City 1028

42 Katara Hills Phase 1 ,2 and 3

Total From Sl no 1 to 42 879,138

SN Under Design Cooling ProjectsExpected Cooling

Capacity (TR)

1 Qatar Cultural Sports Hub - DCP 1 30,000

2 Qatar Cultural Sports Hub - DCP 2 13,000

3 Qatar Cultural Sports Hub - DCP 3 18,000

4 Qatar Cultural Sports Hub - DCP 4 40,000

5 Qatar Rail Vent City Technical Bldg _Musheirib Stn 4,300

6 Qatar Economic Zone 3 (4 DC Plants) 120,000

7 Four Season hotel & Tower 50,000

8 Hamad Bin Khalifa Medical City 31,000

9 Lusail Hotel & Resort Client IDCC 25,000

10 Qatar Economic Zone 1 17,000

11 Al Maha Hospital ( Al wakrah ) 2,000

12 Al Khor Hospital 7,500

13 General Head Quarters & Military Police Camp

14 Al Waab city project 30,000

15 Lusail Palaces 20,000

16 City center Mall Najma

Under Design District Cooling Projects

In 2016, Qatar DC capacity reached ~655 kTR (or 14% of the total cooling capacity) with a

major potential for growth

Current Cooling Capacity and DC PenetrationIn kTR, 2016

Note: 1) Total Cooling Capacity of 4,400 kTR is calculated based on the 2016 peak electricity demand.

14%

85%

4.4

2016

21%

81%

20212018

7.5

21%

77%79%

5.4

19%

20272024

79%

6.8

15%

6.023%

2030

85%

8.3

DC Conventional

655(14%)

3740

(85%)

Conventional Cooling

Total Cooling Capacity

~4,4001)

District Cooling

Real Estate Developer DC Provider

Total Cooling Capacity Forecast Based on 50% DC Penetration – In Million TR, 2016-2030

DC Capacity in 2030 = 1.6 Million TR

District Cooling Capacity

District Cooling Benefits to Qatar

District Cooling Benefits to Qatar

District Cooling

Contributing to Water Resources Sustainability by utilizing TSE & Recycling DC

Blow Down to STWP

10% Saving in Potable Water Capital Demand & 30% in Electrical

Power Generation by 2030

Potential Financial Cumulative Savings to State of Qatar

~ 15 Billion QR by 2030

Cutting the District Cooling Bill by utilizing TSE as

alternative to potable water

1) Potable water demand for cooling if DC plants using TSE switched to potable waterSource: KM Consultant (Strategy& ) Analysis

Yearly Savings in Potable WaterBased on 50% DC Penetration – In Mm3, 2015-2023

3433

31

26

22

13

7

31

3433

313027

2422

98

20222021 20232020201920162015 20182017

If all DC Plants used TSEActual - Based on DC plants using TSE1)

7 6 15 11 5 4 No consumption of Potable Water

Actual Potable Water Consumption for Cooling (Mm3)

All DC plants using TSE

Water Savings due to District Cooling

District Cooling could save QAR 15 Billion by 2030

Potential Cumulative Savings for the State of QatarBased on 50% DC Penetration, In Bln QAR - 2015-2030

Note: Potential savings do not include the monetary saving from the reduced CO2 emissions since there is no carbon emission credit system in Qatar or the regionSource: KM Consultant (Strategy&) Analysis

51%

29%

20%

2030

61%

23%16%

57%

26%17%

2024

2.1

0.3

~154.1

Total2027

50%

30%20%

2021

3.5

51%29%

20%

2018

2.8

28%43%29%

2015

2.1

13%52%35%

Natural Gas ConsumptionDistribution CapacityGeneration Capacity

Qatar Financial Savings due to DC

Advice for Countries with Scarcity of Water

Once decided to use TSE for DC ,What are the requirements

to Succeed .

1) TSE Polishing Plant

2) TSE Network Availability

3) A Place/Network for cooling plant discharge disposal

District Cooling Challenges in Qatar

Source: Press Material, Interviews

Selected End User Complaints in Qatar

“People have moved out from DC building because of the high cost of cooling”

“Utility bills for district cooling are very high”

“Even when we have everything shut off it still

"cools" and we end up paying for it”

“Even when we are not there it still costs us 800QAR a month”

“Resident … have seen price hikes of in their monthly bills”

“Residence in low occupancy buildings suffer most as fixed costs of running the plant is spread across fewer bill payers”

“The surface of our open air large terrace is included in the

contractual cooling area”

DC End user Complaints

Source: Strategy& Analysis

• Unclear consumer rights and obligations

• Inconsistent tariff schemes & limited transparency

• No uniform service standards

• Misalignment in capacity planning and real estate occupancy

• Inefficient DC construction phasing that leads to substantial up-front CAPEX burden

• Gap between actual & perceived benefits of DC impacting its wider adoption

• Distortions in the perceived benefits of DC between end-users, real estate developers, DC providers and Government mainly due to Utility subsidies

• Scarcity in renewable water resources

• Energy-intensive desalinization process that has high burden on economy and environment

• Lack of TSE water quantity/Quality coupled with unclear constraints in discharge

DescriptionMain Challenges

Lack of Consumer Protection

Mechanisms

Issues in Planning and Project

Phasing

Misalignment in Benefit Allocation

Scarcity of Potable Water in the

Region

District Cooling Challenges

DC growth is hindered by several challenges that the DC regulatory framework aims to address

District Cooling Regulation In Qatar

A DC Plan Assessment Map was developed in coordination with Qatar National Development Projects to define the suitable DC served areas

DC Plan Assessment MapDraft DC Assessment Map – Doha Area

District Cooling Suitable Areas

DC Player Categories Entities

▪ Qatar Cool▪ Marafeq Qatar

DC Providers

▪ Kahramaa▪ Ashghal▪ Ministry of Municipality and

Environment▪ Ministry of Public Health▪ Ministry of Economy and

Commerce

▪ Qatar Foundation▪ Msheireb Properties▪ Hamad Medical Corporation▪ Supreme committee for delivery

and legacy▪ Other Major Developers

Government Entities

Developers

DC Stakeholders

A DC regulatory framework needs clarity around 8 dimensions

Dimension Question

Mandating Should DC be mandated in certain areas and to what extent?

IncentivesShould specific incentives be provided to DC providers in order to address the market distortions?

Water Supply & Discharge What water supply to use and how to manage the discharge?

Billing and TariffsHow tariffs should be structured and set? What allocation of payments is needed to align with risks?

Market Competition What rules are needed to ensure a competitive and open market for DC projects?

Technical & Service Performance

What technical standards and guidelines are needed to ensure delivery efficiency and sustainability?

Licensing What type of licensing are required and what are the terms?

Contractual Frameworks What type of contractual framework should bind different stakeholders in the market?

A

B

C

D

E

F

G

H

Regulatory Framework:

Dimensions & Key Questions

The DC Regulator’s organization designed to meet a set of below key principles(benchmarked with Int. DC Regulators.)

DescriptionDesign Principles

▪ Introduce functions able to cover all regulatory activities foreseen by the proposed regulatory framework

Ensure Coverage of all

DC Regulatory

Activities

▪ Minimize the complexity of the organization by clustering separate sections with clear accountabilities and streamlined processes, resulting in short lead time and reduced number of headcounts

Enable Efficient

Regulatory Processes

▪ Consolidate functions requiring similar skill sets and functional knowledge within the same section to create synergies of competences

▪ Grant access of Qatari nationals to key roles in the organization

Facilitate Skills

Development &

Qatarization

▪ Facilitate ability to introduce new functions or increase/decrease headcounts to react to emerging conditions in DC market and emerging national needs

▪ Accommodate development and potential changes to the DC regulations and eventually the regulation of the Conventional Cooling market

Maximize Flexibility to

Changes in Cooling

Market

▪ Minimize implementation effort by limiting changes to current organizationEnsure Ease of

Implementation

1

3

4

2

5

Organization Design Principles for Effective Regulation

To reach the strategic objectives, the DC Regulator takes regulatory actions and assesses them with several KPIs

*) Regulatory Effectiveness: 20% * (% of plants complying with Environmental Law 30/2002) + 20%*(% of complaints processed on DC plants)+20%*(% of inspected DC plants out of planned DC plants to inspect)+20%*(% of employees' satisfaction)+20%*(new technologies introduced out of planned technologies to introduce). Source:Strategy& Analysis

Strategic Objective

Environmental

Protection & Health

• Define clear Environmental policies in the form of

guidelines, standards and KPIs

• Ensure compliance to Environmental policies with

regular checks

• # of yearly inspected DC plant

• # of plants not complying with

Environmental Law 30/2002

Customers’

Protection

• Regulate DC tariffs to promote transparency and

fairness

• Ensure reliability of service to consumers

• # of complaints processed on DC tariffs

• # of DC tariffs reviewed

• # of yearly inspected DC plants

Energy Efficiency• Mandate DC to maximize DC penetration

• Establish standards and guidelines to ensure the

minimum DC plants requirements

• # of DC-mandated developments

• Potable water consumption for cooling

(Mm3/year)

• # of yearly inspected DC plants

Human Capital

• Ensure capabilities’ development of employees through

periodical trainings

• Retain capabilities with an appropriate team

management

• % of employees with at least 1 training per

year

• % of employees satisfaction

New Technologies

and Innovation

• Ensure a competitive market that enhances service

quality and technology innovation

• Promote innovation in DC solutions and foster energy

efficiency (e.g campaigns, workshops)

• # of DC promotion campaigns

• # of workshop sessions with DC

stakeholders

• # of R&D activities/ initiatives

KPIsDC Regulatory Actions1

2

3

4

5

Regulatory

Effectiveness• Ensure a positive impact of the regulation along the

different Strategic Objectives• % of Regulatory Effectiveness*

Proposed Strategic Objectives and DC Regulatory Actions

Proposed DC price regulation consists of 4 key pillars

Tariff Structure

Payment Schemes

Price Control Mechanism

Ownership Structures

• Description of the 3-tier tariff structure (connection, capacity and consumption charges) that will be adopted by DC Providers and DC Retailers

• Definition of payment schemes (who pays what and to whom) according to all the different types of contractual agreements between Real Estate stakeholders

• Development of the price control mechanism that will be adopted by the DC Regulator to control the DC Providers and DC Retailers’ tariffs in the market

• Overview and assessment of the different Government ownership structures that can be adopted in the future (from no asset ownership to full asset ownership)

Key Pillars of DC Price Regulation Description

1

2

3

4

Pillars of Price Regulations

DC sector potentially involves stakeholders and entities that may exchange services and monetary transactions

DC Provider

DC Retailer

Developer

Unit Owner

An entity that generates and distributes Cooling Energy by means of Chilled Water using a DC System to one or more DC Retailers and/or one or more Customers (who may be Developers, Unit Owners, Occupants or Tenants)

An entity that acquires cooling energy by means of Chilled Water from a DC Provider or DC Retailer for the purpose of selling to one or more DC Retailers and/or one or more Customers. A DC Retailer may also be a DC Provider

An entity that is involved in encompassing activities that range from the purchase of raw land, construction of real estate properties to the sale and/or lease of built developments or parcels to others (can be a master developer, developer, sub-developer or building owner)

An individual or entity that uses the Unit, either owning it (in the case of Occupant) or renting it from either a Unit Owner or from the Developer (in the case of Tenant)

An individual or entity that purchases a Unit from a Developer and owns the Unit. The Unit Owner is also the Occupant in case he uses the Unit (Unit can be a dwelling or a property for commercial use)

Occupant or Tenant

DC Operations Stakeholders

District Cooling Department

Mission & Achievements

The District Cooling Services Department came into existence with the resolution from council of ministry vide reference 825 dated 2nd May 2012.

Duties & Responsibilities

1. Suggest general policies for District Cooling.2. Set up rules and regulations for DC and ensuring that they are being complied with.3. Set up DC standards and specifications and ensure that they are being complied

with.4. Decide on areas to be served by DC as per priorities and visibility (economically) in

coordination with Concerned Authorities in the country.5. Suggest tariff structures for customers.6. Approve DC activities.7. Develop Integrated Programs of whatever related to District Cooling.8. Coordinate with the concerned authorities with regards to District Cooling.

District Cooling Department

Mandate

• (May 2012): District Cooling Services Department (DC) Established as Corporate Regulatory Body of Qatar General Electricity and Water Corporation – KAHRAMAA

• (May 2013): District Cooling Department (DC) Suggested Prohibition of Potable Water For Cooling Purposes and to utilize Treated Sewage Effluent (TSE) as suitable alternative cooling makeup (to Qatar Permanent Water Resources Committee- PWRC)

• (March 2013): Qatar Council Of Ministers Approved the Directive Of Prohibition of Potable Water For Cooling Purposes.

• (May 2013): KAHRAMAA notified over 53 District Cooling Operators on the Prohibition Directive and to utilize TSE for Cooling.

• (June 2014) Established effective District Cooling Stakeholders coordination and Conducted DC Workshop.

• (Oct 2015): District Cooling Department Developed the Regulatory Frame Work structure for District Cooling Services in Qatar by International Consultants Consortium.

• (May 2017): District Cooling Department Published the District Cooling Code as part of KAHRAMAA Published Contractual regulations.

District Cooling Department –Accomplishment Milestones

GCC District Cooling Committee

استحداث لجنة ضمن لجان ( 10/04/2017) بتاريخ كهرماءاقترحت األمانة العامة لدول مجلس التعاون للخليج العربي تختص بنظام

تبريد المناطق

Kahramaa proposed by ( 10th April 2017) introducing

District Cooling Committee within GCC Committees

KAHRAMAA Is currently developing Qatar District Cooling Law.

Anticipate to publish the 1st Version of Qatar DC Law by 2018.

District Cooling Law

Thank you Questions

Engineer :Ibrahim Mohammed A Al Sada

Manager: District Cooling Services Department

Qatar General Electricity & Water Corporation - KAHRAMAA