District Cooling Market Size, Share & Industry Analysis, By End User (Residential, Industrial, and Commercial), By Technology (Electric Chillers, Absorption Chillers, and Others), and Regional Forecast, 2019 - 2026

KEY INDUSTRY INSIGHTS

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The global district cooling market size was valued at USD 21.88 Billion in 2018 is projected to reach USD 39.94  Billion by 2026, exhibiting a CAGR of 7.77% during the forecast period.

District cooling is a proven and sophisticated solution that has been deployed for many years in a growing number of cities worldwide. In several, the Middle East and North American countries, such as UAE, Saudi Arabia, Qatar, United States, and in some parts of Asia Pacific like China, Japan, Singapore, etc. a considerable amount of cooling are supplied via district cooling networks. District cooling emerged as an essential commodity for providing a local, affordable, and low carbon cooling supply.

It represents a significant opportunity for growing cities to move towards climate-resilient, resource-resilient, and low-carbon pathways. Uplifting the energy efficiency and renewable energy in the global energy mix is the single biggest contribution to keep global temperature rise below 2°C. District cooling provides chilled water through an integrated system for cooling purpose in educational institutes, hospitals, commercial buildings, industries, and many more.

A centralized system produces chilled water, and cooling energy is supplied in the form of chilled water through an underground pipeline system to consumer’s location. District cooling can be more than twice as efficient as traditional decentralized air conditioning system and can reduce electricity use during peak demand period through reduced power consumption. Consequently, the demand for district cooling system is rising rapidly and there is an enormous market potential in the forthcoming years owing to drastic changes in earth’s temperature.

District cooling system is able to boost resilience and energy access through their ability to improve management of electricity demand and adapt to frequent fuel price shocks. Incorporating national utilities into a business model such as through full or partial ownership is a key to realize the benefits of district cooling. In Dubai, 70% of total electricity consumption goes to air conditioning. The government is committed to meet 40% of its cooling needs through district cooling by 2030, using 50% less electricity than a standard air conditioning.

The GCC countries are dominating the district cooling market size in the Middle East and Africa region. The enormous growth in construction, infrastructure, and atmospheric temperature is playing a significant role in increasing the demand for district cooling systems. Substantial potential in UAE & Saudi Arabia owing to rapid urbanization along with ongoing construction activities with government eyeing on adopting energy-efficient technology is boosting the market demand in GCC.

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Qatar is experiencing similar growth in construction followed by economic diversification for FIFA 2022 World Cup, which is driving the growth of district cooling. A large chunk of funding to build world-class facilities for the 2022 FIFA World Cup is also projecting a positive growth for this market. North America has a substantial market for district cooling due to technological advancement and growing need for air conditioning.

In order to mitigate the GHG emissions and enhance the overall performance of the system, the United States has adopted district cooling system at a greater extent. Drastic changes in weather conditions and increasing temperature of the earth has rapidly increased the demand for space cooling which is expected to increase the growth of the market.

MARKET DRIVERS

“Rising concern over GHG emission coupled with increasing demand for sustainable energy development.”

Millions of AC’s are in operation, causing alarming level of GHG emission along with decreasing level of ozone layer. To mitigate the severe threat to environment an advanced and efficient energy system is needed. District cooling system is highly efficient and offers sustainable cooling which helps to reduce the GHG emission. A single district cooling system can act as efficient as hundreds of ACs.

 “Growing installation in the energy-efficient system along with rising urbanization and commercialization is likely to offer lucrative market for the growth of district cooling systems”

The government entities and private companies are extensively investing in energy-efficient technology to meet the rising demand for air conditioning with reduced energy consumption. The district cooling market growth is driven by escalating urbanization and commercialization.

SEGMENTATION

By End-User Outlook/ Analysis

“The commercial sector is expected to witness a massive growth during the given forecast year owing to an enormous demand for air conditioning coupled with massive infrastructure”

The extensive demand for air conditioning from commercial buildings, educational institutes, airports, IT parks, Business parks, etc. is expected to leverage the demand for district cooling system. Massive investment in energy-efficient technology coupled with increasing momentum for sustainable energy development is projected to grow district cooling market size. The residential sectors offer lucrative market in GCC due to continuous deployment of large scale project to meet the increasing demand air conditioning. The industrial cooling market is expected to grow at steady rate.

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By Technology Outlook/ Analysis

“Electric chillers dominate the market due to feasible operational cost and low electricity prices coupled with the convenient distribution.”

In most of the large scale district cooling projects, electric chillers are preferred over absorption chillers due to its higher coefficient of performance (COP). Electric chillers occupy approximately 50% less floor space than the equivalent absorption chillers. Seawater is also used in district cooling in which ice-cold water (4-6°C) from 1000m depth to air-condition the space.

REGIONAL ANALYSIS

North America is the second-largest market for district cooling after Middle East and Africa. Almost all the airports and institutional buildings in the United States are connected through district cooling network to suffice extensive demand for air conditioning. China and Japan hold a majority share of district cooling owing to rising concern over GHG emission and increasing demand for air-conditioning. The atmospheric environment is likely to inhibit the growth of the district cooling in Europe but still some countries planning to install district cooling project in their country.

The district cooling market witness a substantial growth in MEA owing to increasing private investment in the development of energy-efficient cooling coupled with government initiative for sustainable energy development. The commercial and residential sector share the substantial market of district cooling owing to increasing energy prices along with growing urban population. UAE and Saudi Arabia are the largest countries in the GCC which accounts more 75% of total district cooling installed capacity in MEA. Qatar is massively investing in infrastructure development project to provide a world-class facility for scheduled FIFA World Cup 2022. Other countries are also making significant contribution in uplifting district cooling market which includes Bahrain, Kuwait, and Oman.

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Increasing concern over GHG emission has made to think of sustainable energy development. District cooling provides efficient air conditioning on district level which not only reduces GHG emission but saves significant amount of energy. Other countries in the world are also planning to install district cooling on large to mitigate the severe threats of global warming. Therefore, Latin America is expected to witness the massive growth in the field of sustainable energy development.

INDUSTRY KEY PLAYERS

“Engie is the leading company in the world for district cooling followed by Tabreed.”

The district cooling market is highly fragmented with the presence of lots of competitive players around the world. French company Engie headquartered in La Défense has a strong presence all over the world and known for its district energy services.

List of Key COMPANIES 

• ENGIE


• National Central Cooling Company (Tabreed)


• Empower (Emirates Central Cooling System Corporation)


• Emicool


• Veolia


• Enwave Energy Corporation


• Petronas


• Shinryo Corporation


• Keppel Corporation Limited


• Ramboll


• Singapore Power Ltd.


• Fortum


• Vattenfall


• Logstor


• Danfoss


• Stellar Energy


• Marafeq Qatar


• SNC Lavalin

REPORT COVERAGE

"A growing trend observed in the penetration of the retail analytics market across the industries. "

The report provides qualitative and quantitative insights on the global market and detailed analysis of global district cooling market size & growth rate for all possible segments in the market. The global market is segmented by end-user, technology, and geography. Based on the end-user, this market is classified into commercial, residential, and Industrial. By technology, the global market is bifurcated into electric chillers, absorption chillers, and others. Geographically, the global market has been analyzed across five major regions, which are North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. These regions are further categorized into countries.

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Along with this, the report provides an elaborative analysis of This market dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments in the market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends, competitive landscape and company profiles.

Report Scope & Segmentation

INDUSTRY DEVELOPMENT

• In March 2019, Engie has been developing a district cooling network (30,000TR, 105MW) which aims to serve the Jurong Town Corporation, the Singapore Institute of Technology and the community facilities. This is the first time in Punggol Digital District in Singapore for embracing a master integrated plan under one roof which will bring a business park, a university and community facilities.


• In February 2019, An agreement has been signed between UAE’s district cooling company National Central Cooling Company (Tabreed) & Andhra Pradesh Capital Region Development Authority to build district cooling system in the state’s capital Amaravati. The cooling capacity of this project is estimated to be 20,000RT that will meet cooling requirements for the State’s Assembly, High Court, Secretariat, and other government building. District cooling project will be operational from early 2021.


• In December 2018, Emirates Central Cooling System Corporation (Empower) constructing district cooling plant at Barsha Heights in a bid to replace the existing semi-permanent plant. In this project, the company will use the Treated Sewage Effluent (TSE) and Thermal Energy Storage (TES) technologies in its operation. The cost of the project is around AED 169 million, and cooling capacity is 31,250RT.