2010

Analysis of the Saudi Market for District Cooling and future development

Opportunities

District Cooling Summit Saudi Arabia18 - 21 April 2010, Park Hyatt Jeddah, Jeddah, Saudi Arabia

Presented by George Berbari

Middle East District Cooling Brief History

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1. The first commercially successful district heating system was built by Bridsill Holly, who is considered by the International District Energy Association (IDEA) as the father of district energy. The first district heating was launched in Lockport, New York in 1877.

2. In 1930, the first district cooling scheme began operations in Denver, Colorado. And in the 1960s, Europe joined the party, with schemes in Paris La Defense and Hamburg.

3. The Middle East was not far behind in adopting the new system of cooling. In fact, the first of many installations of large central chilled water plants came up in the Kingdom of Saudi Arabia , Lebanon and Kuwait in the 1960s. However, the first commercial district cooling scheme was developed by Tabreed and the UAE Army in Zayed Military City in Abu Dhabi, to serve the Military Directorate.

King Saud University – Riyadh, KSA30,000 Ton Commissioned in 1978 utilizing TSE Water

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Middle East District Cooling History

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The milestone was not lost on Tracey Wolf of Caterpillar, the engineer who commissioned the facility in May 1999. “This Facility is an example of what meticulous attention to detail and a relentless commitment to quality can produce,” Wolf said. “The fruition of this hard work was illustrated at the commissioning when all three units started and were put online with minimal adjustment being necessary.”

Qatar 1st DC Scheme – The West Bay

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1- Plant 1 – 30,000 Ton2- Plant 2 – 37,000 Ton

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Al Rashid Mall Al Khobar, KSA12,500 Ton with 14 MW Power Generation & Thermal Storage

Middle East District Cooling History – Key Achievements

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1. More Than 1,500,000 Ton installed and Running.

2. The largest district cooling plants in the world have been built – or are coming up – in the GCC, in the forms of the 110,000 TR single plant for The Pearl Qatar development, 80,000 TR on Sawwah island in Abu Dhabi, the 75,000 TR plant in Dubai Investments Park, and several plants 30,000 to 60,000 Ton for Hafr Al Batin, Aramco, Makkah, al-Madinah, KAU, KSU, PNU, KAUS&T, Dammam, Riyadh & Jeddah Airports.

3. The credit goes to the KSA and UAE for the first applications in the world to serve low-density developments, such as Hafr Al Batin town, the villas nestled in the Green Community at Dubai Investments Park, at Dubai Motor City and at the military facilities in Abu Dhabi.

4. The first dedicated natural gas-generation arrangement to solely serve a district cooling plant came up in Abu Dhabi. This arrangement was synchronized with utility power.

Middle East District Cooling History – Key Achievements (Cont’d)

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5. Among the first large-scale individual metering regimens of villas and apartments in the world were set up at Dubai Investments Park and at the Jumeirah Beach Residence.

6. The UAE and Qatar boast the first applications in the world where district energy has successfully implemented the operational controls of the variable speed pumps of all customers’ buildings with proprietary control logic to resolve the low delta T syndrome through better control on both supply and return temperature, which will save electric energy for the customer as well as the district cooling provider.

7. The UAE has to its credit the wide and diversified use of chilled water piping material (running to thousands of kilometers) that include pre-insulated steel pipes; HDPE pipes; GRP Pipes; and flexible, pre-insulated, small-sized HDPE pipes.

Key drivers for adapting and implementing District Cooling in the Kingdom of Saudi Arabia

1. The big Electric Demand increase in the coming 10 years.• Saudi Electric Company projects an increase in demand from 41,043 MW in

2009 to 75,155 MW in 2020.

• DC can play a major role in curbing electric demand.

• Availability of subsidized Diesel Fuel which make co-generation and tri-generation an important alternative energy source for DC.

2. The Formation of National Water Company that will make available treated sewage effluent “TSE” water in the 6 cities first (Makkah, Al

Madinah, Jeddah, Riyadh, Dammam & Al Khobar) in the coming year and in all major cities later.

• 800,000 m3/day of TSE will be available in Riyadh as of May 2011.

3. The Economic & Environmental Viability of DC at all levels, inclusive of Government, Major Developers and individual developers.

Key drivers for adapting and implementing District Cooling in the Kingdom of Saudi Arabia (Cont’d)

4. Large development planned in all major 6 cities of KSA.

5. Dry areas such as Riyadh and al-Madinah al-Monawarah has low wet bulb temperatures ranging between 69 - 72oF (20.6-22.2oC) offers additional savings when water cooled chillers are used.

6. More than 100 Turbines so far are cooled via chilled water to increase Electric generation capacity and many more are planned.

7. Many existing Large developments such as universities, airports, ARAMCO Facilities are currently updating their existing facilities.

8. DC is becoming the primary cooling choice for all large developments.

Current Hurdles facing District Cooling Industry

1. Lack of public Land that should be provided free of cost or at nominal fee to DC similar to other utilities such as power, telecom, water and sewage.

2. Major restrictions for approval of service corridors required for chilled water distribution piping network.

3. Unfavorable electric Slab rate starting from 5 Halala/KWH for small user reaching 26 Halala/KWH for large users.

4. Generation and synchronization with the electric grid alternative is restricted by SEC and generation in island mode is approved.

Possible Opportunity for District Cooling Industry

1. Introduction of optional Peak rate (13:00 to 17:00 during workdays Saturday through

Wednesday for the period from June 1st until September 30th) and off peak Tariff rates which makes thermal storage more feasible.

   Tariff (Halala/KWH) for each Subscription type

Peak time during summer

Outside peak time during

summer months

The rest of the months of the year (current

tariff)

Industrial 35 8 12

Commercial 76 17 26

What are the prospect of District Cooling in KSA?

1. Current DC Schemes Recently Commissioned:

• Al Rashid Mall expansion 12,500 Ton.• King Abdullah University of Science and Technology 45,000 Ton

2. Current DC Schemes under construction:

• Princess Noura University 55,000 Ton.• King Abdullah Financial District 90,000 Ton• Information Technology and Communication complex 25,000 Ton• Hadeed Industrial Facility 16,000 ton.• KSU Endowment Fund 15,000 Ton.

What are the prospect of District Cooling in KSA (Cont’d)?

3. Current DC Schemes under Replacement:

• Aramco residential Complex 27,000 Ton• KSU Central Plant upgrade 30,000 Ton

4. DC few planned Schemes for the future (more than 800,000 Ton) :

• King Abdullah Economic city, Baylasan District 80,000 Ton.• Jebel Omar & King Abdul Aziz Road in Makkah – 200,000 Ton• Jeddah Corniche Development – 50,000 Ton• Knowledge Economic City al-Madinah – 400,000 ton.• Riyadh King Fahd Road, 50,000 Ton• Several Private sector developments 100,000 Ton.

DC PRO Engineering

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email: gberbari@dcproeng.com

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