Air conditioning, which accounts for a staggering 70% of annual peak electricity consumption in the Gulf Co-operation Council (GCC) region, will require 1.5mn barrels of oil equivalent per day by 2030 with demand slated to triple, according to Booz and Company.

Because of this high consumption, Booz said in a report that GCC governments ought to incorporate district cooling into their urban planning to ensure sustainable economic growth as it could lead to a reduction of 20 gigawatts in new power capacity requirements and power plant fuel consumption equivalent to 200,000 barrels of oil per day as well as a region-wide decrease of 31mn tonnes per year in carbon dioxide emissions.

“If implemented under the right conditions, district cooling could effectively serve 30% of the region’s cooling requirements by 2030,” the management consulting firm said, adding that it caters perfectly to densely populated areas. It offers a more cost-efficient and eco-friendly solution for the GCC.

District cooling is decentralised, and involves central plant supplying chilled water through a network of pipes to multiple buildings within a local area.

If the region maintains its existing pattern of cooling technology deployment with heavy reliance on conventional cooling technologies, Booz said by 2030, the GCC will have to invest approximately $ 100bn for new cooling capacity and more than $ 120bn for new power capacity.

Over the next 18 years, air-conditioning will account for 60% of additional power generation required in this part of the world, according to the report.

“With these countries likely to urbanise further in coming decades, district cooling could save them from investing considerable sums on new power stations,” George Sarraf, partner with Booz and Company, said.

At present, district cooling is one of three main systems used for air-conditioning in the region. The two others include conventional window units or split systems as well as central air or water-cooled chillers.“In district cooling, the network entails an important additional cost which, on a “per-user” basis, decreases with increasing real estate density, and can be offset by the higher efficiency of the system,” according to Walid Fayad, partner with Booz & Company.
The report said district cooling not only provided lower energy requirements but also ensured more efficient capacity use and peak-period saving potential.

Finding that district cooling has not been used sufficiently due to structural problems such as non-aggregated development decisions, non-economic utility pricing, cost misconceptions and the risk of early investment, Booz said as with other utilities, district cooling requires a proper regulatory framework that protects developers, providers, consumers, and the broader economy.

“A further option for GCC govern­ments is to become economically involved in the market, thereby direct­ing the expansion of district cooling as an economic actor rather than simply as a rule-setter,” said Simon-Pierre Monette, senior associate with Booz and Company.