Dubai to announce new District Cooling Regulation as the grace period for companies expires on Sept 30, 2022

New regulations will bring clarity on tariffs, establish transparency and accountability in the district cooling sector, officials say

A new suite of district cooling regulations aimed at reducing excessive billings and other issues is nearing completion, a senior government official said at the two-day MENA District Cooling Projects Conference that started on June 14, 2022, at Hotel Raffles Dubai, UAE.

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“The grace period for the district cooling service providers and billing agents will expire on September 30, 2022, when the new comprehensive set of District Cooling Regulations comes into effect. Following this, we will supervise and monitor the activities of the district cooling companies to ensure compliance with the issued regulations,” James Grinnell, Head of Water at the Regulatory and Supervisory Bureau (RSB) for the Electricity and Water Sector in Dubai, said.

In permitting companies, the RSB has ensured last year’s reductions to the fuel surcharge are being passed through to customers by Billing Agents. It also aims to ensure only one deposit will be allowed per unit – either from landlord or tenant, prohibit prolonged estimated billing, fast replacement of faulty meters.

“As per the new regulations, district cooling permit holders have obligations to develop and publish a customer charter and measure performance against it, clear engagement obligations when dealing with customers in arrears, obligation to deliver chilled water, prompt return of deposits, reduce the occurrence of excess contract capacity estimates; penalties for poor energy performance, obligation to monitor and report health and safety, etc,” he said.

These new sets of regulations will bring increased transparency and establish stakeholder accountability to make the district cooling sector more efficient and customer centric. Customers must see that district cooling offer good value for money.

RSB was established in 2010 by Dubai Government to regulate Dubai’s power and water sector. It was mandated to regulate the Independent Water and Power Producers (IWPP) in 2011, and has supported Dubai’s Demand-Side Management (DSM) since 2013. Last year it received the mandate to regulate the district cooling sector as per the Executive Council Resolution No. 6 of 2021.

RSB has so far issued 22 district cooling permits out of 24 applications among 28 companies. Among the billing agents, it has licensed 11 out of 12 applications and 11 service providers out of 12 applications.

“Following the mandate, we started to talk to all the stakeholders in the district cooling industry, and over the last year, have developed a set of regulations to implement the regulatory framework. The new regulations come into effect on September 30, 2022, when the grace period for the operators expires,” Grinnell says.

Other governments in the Middle East are also putting the regulatory regimes to ensure structured growth of the district cooling industry. Governments of Abu Dhabi, Saudi Arabia have been working on regulations over the last few years.

Leila Noubough Nasr, District Cooling Regulation Senior Specialist at Abu Dhabi Department of Energy, said, the government has put a sound regulatory environment for the district cooling sector in the emirate. “We have so far issued four licenses with 230,000 RT licensed capacity in the emirate. One of the key achievements has been reduced consumption charge for the residential end-users.”

More than 250 delegates including senior government officials, project owners, developers, utility suppliers, industry experts and key stakeholders participated at the MENA District Cooling Projects Conference that focused on the growth of this important sector.

The two-day event discussed project opportunities worth US$15 billion (Dh55 billion), or 10 percent of the US$150 billion global district cooling market. The conference takes place at a time when the district cooling sector is expanding at a fast pace in the UAE, GCC and the rest of the Middle East and North Africa due to a global target of zero net emission by 2050.

At the MENA District Cooling Projects Conference, more than 25 international and regional experts discussed the current market outlook, opportunities and challenges in the region’s district cooling industry – that is becoming more popular due to its energy efficiency. More than 20 leading organizations from 10 countries are showcasing their products and services at the conference through an exhibition.

With the net zero emission target announced by the international community by 2050, most countries in the Middle East are now racing to install new district cooling plants to reduce their carbon emissions. Following the footsteps of the UAE, Saudi Arabia, Bahrain, Qatar, Oman, Kuwait, Egypt and other countries are initiating a large number of district cooling projects across the region – that will keep the contractors and subcontractors busy for the next 15-20 years, experts said.

District cooling systems use 50 percent less energy than air conditioners, thereby decreasing initial capital investment and maintenance costs. The equipment can operate smoothly for up to a 30-year span, enhancing technology adoption. District cooling adds enormous value in terms of improving building space utilization, reducing noise pollution, reducing refrigerant use and most importantly reducing the cost of cooling substantially.

District cooling is, by far, the most energy-efficient way to cool buildings in arid environments. High reliability and increased energy efficiency are a few of the paramount features offered by district cooling systems which will boost the business trends. It is ideal for large establishments such as airports, commercial buildings, university campuses, and residential towers. The technology relies on a centralized cooling plant, which facilitates cooling within its grid through a network of the underground piping system carrying chilled water.

The event is being attended by officials of civic bodies such as municipalities, utility providers, utility operators, contractors, sub-contractors, materials suppliers, consultants, engineers, regulatory bodies and developers, etc. Participants at the conference are provided with enormous networking and business opportunities, many have secured businesses around the latest projects that are currently in the early stage of execution.

The speakers for the event comprised high-profile industry leaders including Leila Noubough Nasr, District Cooling Regulation Senior Specialist, Department of Energy, James Grinnell, Head of Water, Regulatory and Supervisory Bureau for Electricity and Water of Dubai (RSB), Suliman Al-Khliwi, Managing Director, Saudi Tabreed Abobaker Al Hadrami, General Manager (LCCSO)/ O&M Director, Marafeq Qatar, Ezzeddine Jradi, Chief Transformation and Business Excellence Officer, Emicool, Fares Ahmad, General Manager, Emaar District Cooling and many other industry leaders.

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