A sustainable solution for the UAE’s cooling needs

UAE

Khalid Al Marzooqi, CEO of Tabreed, talks to The Energy Year about the large emissions savings that can be obtained with large-scale district cooling (DC) installations and the potential for carbon credit markets to emerge in the UAE. Tabreed is a UAE-based provider of DC systems and equipment for residential, commercial and industrial applications.

What is the penetration of DC in the UAE market?
The penetration of DC is about 20-28% in the UAE as a whole, out of which we have around 18-20%. In Dubai, the penetration of DC is larger, about 30%, but there is more competition, so we have a smaller percentage, and in Abu Dhabi, the penetration is about 18-20%. Greater DC penetration in the UAE could bring enormous sustainability benefits.
Our core business is innovation. Formally, it is DC systems and services, but innovation is what we do, in line with the direction of the country and the world towards sustainability. While others are looking to green hydrogen, blue hydrogen, solar, wind, and so on, we have a solution that is 50% more energy-efficient than conventional cooling systems.
Due to its limited penetration in the market and its high efficiency, DC is considered an emissions preventer, and we have become the only DC company in the world to generate carbon credits. We can prevent 50 kilograms of carbon dioxide emissions per second, relative to alternative systems. In the past 26 years, we have prevented about 8 million tonnes.

How is geothermal energy boosting the implementation of DC solutions?
In preparation for COP28, we initiated a geothermal pilot project, G2COOL, with Masdar City and ADNOC. Our aim was to prove the technology – and it is now feasible and available. Looking ahead, we are targeting data centres, as they will need a large amount of energy from sustainable sources.
Another solution we are exploring is thermal storage tanks. We will store energy in the form of chilled water, and then sell it to meet peaks in demand. The storage tanks can also be used as batteries to store solar energy generated during daylight hours, for use at night.
We ran an experiment with the Department of Energy, using two different tariffs and shifting the peak as per demand. The Department of Energy can offer a lower tariff at night to charge your tanks, and you release the energy at peak times. We piloted this peak shifting and it was very successful as cooling is responsible for around 70% of electricity consumption in the UAE.

What are the main challenges to adoption that you expect to encounter?
Educating people in some of the markets has been a big challenge. In Asian countries, they use smaller-scale, isolated DC, but it is when you have a huge development with multiple plants connected that you reap the benefits.
There is also another aspect of DC, the diversity factor, which we need to educate the public about. If you have isolated systems, you have to provide a certain amount of cooling to each, but no aggregate system is going to fully use all of those amounts simultaneously. With a diversity factor, we build 70% of the aggregate requirement, knowing that it will never reach 100%. This approach saves capital, equipment and carbon dioxide emissions.
Even for geothermal adoption, education is a challenge. People are surprised when we present them with our solution. Some international companies such as Google and Amazon understand our offering, but most are still following what their consultants, contractors and engineering firms say, and some of those advisers may have a vested interest in not adopting DC.
Therefore, at the end of the day, it’s all about regulations and how strictly we impose an efficient solution. In an ideal world regulations would mandate DC so that developers incorporate it. The problem is that you are fighting subsidies which make conventional solutions cheaper. At the moment, companies are attracted to our systems for their sustainability, efficiency or CSR value, but everybody looks at their bottom line and wants to save costs.

How did you decide to pursue carbon credits?
We understood that carbon credits were going to become very important, so we decided to become the leaders in this push. Working around all the red tape, we came across carbon dioxide generation as a big impediment, due to the nature of our business. However, by increasing our efficiency we succeeded in being recognised as a verified carbon credit (VCC) generator.
Unfortunately, there is still no compliance carbon credits market in the UAE such as those we see in Europe, and Tabreed can only use the carbon credits generated in the voluntary market. The UAE authorities are working to establish a carbon market here and we will be the first domestic actor able to provide carbon credits.
Generating VCCs was our first phase. We wanted to go hand in hand with the UAE’s Net Zero Strategy 2050. Our second phase will come when power generation becomes more sustainable and phase three will come by requiring manufacturers and suppliers to reduce their carbon dioxide footprint, which will be difficult.

What are your international expansion plans?
We promote our business internationally to extend our DC know-how. Once the market becomes large enough, DC will become commercially attractive to customers. We have already grown our footprint in the region to include Saudi Arabia, Bahrain, Oman and Egypt. We have a lot of ambition in Egypt because it is a very big market, but we are hindered by the exchange rate, which makes business commercially challenging for the time being.
We are in India as well. After working on it for six or seven years, we broke into the Indian market. India’s market is headed up by Tabreed Asia, which is a partnership with IFC. In Southeast Asia, we are waiting for critical mass to build up so we can start doing business there, but it will be a lengthy process involving labour laws, taxation and involvement by provincial governments.

Are you incorporating AI into your operations?
We are incorporating AI into all of our operations, working hand in hand with the electricity generation and distribution segments. We know the peaks and trends of cooling demand and we can anticipate the loads that are going to come. Small adjustments can make a huge difference in our efficiency, and even with new customers coming, we can keep the diversity factor at 70% because each customer has different needs at different times, and we can track them.
Our forecasting has worked very well. We can actually predict with AI the days of the year in which we anticipate more or less consumption, thanks to our operational data. AI needs a lot of input – you need to teach it – and we have many years’ worth of data. That makes us unique in the world because no one else can pull that amount of information. We are also using data for preventive maintenance on our equipment and to run our plants.

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