With the hot & humid temperatures and the rising population & tourism in South East Asia, the demand for efficient energy cooling solutions has arisen significantly, which has been satiated by District Cooling systems to a certain extent. These systems provide cooling to a larger area or a whole building at once through piped cooling distribution, which, in turn, helps save & manage energy consumption.
According to the International District Energy Association, the energy demand for air conditioning is around 50-70% of the peak electricity demand. District cooling, a crucial energy infrastructure, helps minimize strain on the electric grid caused by these high energy demands. As a result, these systems are gaining immense popularity across the South East Asia region.
The South East Asia District Cooling Market is expected to grow at a CAGR of around 9.8% during the forecast period i.e. 2022-2027. According to the International Energy Association, the demand for electricity just for cooling solutions would require extra 200 GW by the year of 2040. Therefore, to not only sustain the consumer’s demand for cooling solutions but also to mitigate the energy security risk, climate change, emission reductions the companies in the South East Asia have been shifting towards energy-efficient District Cooling Systems.
|Study Period||Historical Data: 2017-20|
|Base Year: 2021|
|Forecast Period: 2022-27|
|Country Covered||Malaysia, Singapore, Thailand, Vietnam, Indonesia, Rest of SEA|
|Key Companies Profiled||Xylem, Trane, Siemens, Samson Vietnam Co., Ltd., AVK, Keppel DHCS, SP Group, ENGIE Group, ABB, Mitsui & Co., Shinryo, SunCon, Gas District Cooling (M) Sdn Bhd, District Cooling System and Power Plant Co., Ltd., Others|
|Unit Denominations||USD Million/Billion|
The South East Asia District Cooling Market has shown considerable growth during 2017-19. The steady growth was observed due to evolving government initiatives in the countries viz. Thailand, Singapore, Malaysia, Indonesia, and Vietnam mandated energy efficient norms in primarily commercial buildings which have promoted the development of District Cooling Systems in the region. For example:
Since 2020, many companies have committed to invest in the development & operations of district cooling systems to meet the green building norms mentioned above. As a result, the district cooling system market would steadily grow during the forecast period. For instance:
Impact of Covid-19 on the South East Asia District Cooling Market
Amidst the Covid-19 pandemic in 2020, many HVAC companies have targeted energy transitioning by adopting district cooling systems for higher energy efficiency to reduce GHG emissions by 2030. The growing infrastructure developments and continuous urbanization after the relaxations in Covid-19 restrictions have created an opportunity for companies like Trane, Keppel DHCS, ENGIE Group, etc., to offer their wide spectrum of energy & environmental infrastructure solutions, including district cooling systems.
Despite the operational challenges & disruptions brought by the Covid-19 pandemic, Keppel DHCS continued executing existing projects and performed well in the industry. In response to disruptions caused by the pandemic, Keppel Infrastructure adopted a more agile model by implementing remote monitoring & centralized operations for District Cooling Systems (DCS), wherever its facilities are available in Singapore.
Based on the Production Technique:
Of them all, Electric Chillers held a notable share in the South East Asia District Cooling Market during 2017-19. It owes to its Coefficient of Performance (COP) that ranges between 1.0 & 8.0, i.e., more than absorption chillers (COP 0.54 to 1.1). For instance:
Based on End Users:
The District Cooling Market in South East Asia is projected to witness significant growth around the commercial sector during 2021-26, owing to various ongoing construction projects of major business parks & retail malls in urban areas. Moreover, the aim of urban development in the region by retrofitting existing buildings or constructing new ones with green building standards has led to the surging demand for district cooling systems in the commercial sector. For example:
Based on the Geography, the South East Asia District Cooling Market expands across:
Singapore & Thailand had a noticeable market size of district cooling systems due to various urban developments like construction & designing of commercial buildings like business parks, hotels, retail malls, factories, etc., in these countries in 2021. Moreover, the township development & mixed land-use projects in these countries have also driven the demand for district cooling systems.
Recent Developments by Leading Companies
Steady Growth in District Cooling Market due to Various Township Developments
The township development in urban areas like Bangkok in Thailand and Jakarta in Indonesia has witnessed continuous constructions of high-rise buildings since 2017 to attract tourism businesses. Besides, the urban development in these metropolitan cities has also allowed incorporating district cooling systems in commercial buildings, such as five-star hotels, retail malls, airports, etc., due to high cooling demand fulfilled by green building standards. With all these reasons and upcoming projects during 2022-27, district cooling systems across South East Asia would have a considerable market size.
In this ongoing process of development of a city, MITSUI & Co., Ltd. has invested in district cooling & power distribution business to supply the ‘One Bangkok development’ project in Bangkok, Thailand, a new landmark development in central Bangkok likely to open by 2023. The project comprises of 16.7-hectare site, i.e., a 16-building fully-integrated district with five premium-grade office towers, three luxury residential towers, five luxury & lifestyle hotels, four differentiated retail precincts, and art & culture & public spaces. The centralized district cooling infrastructure would provide environmental benefits & efficiencies.
Commitment towards Reducing Green House Gas (GHG) Emissions by Deploying District Cooling Systems
South East Asian countries like Indonesia, Thailand, Singapore, Malaysia, & Vietnam have committed to reducing greenhouse gas emissions by 2030 with the improvement in urban cooling projects & comprehensive municipal enforcement of building standards. The various commitments by developing countries to reduce GHG emissions through urban cooling projects, which also include district cooling systems, would have significant growth potential for the district cooling market during the forecast period. Some of the ongoing urban cooling projects in Vietnam include:
Possible Market Restraint: High Installation & Maintenance Costs Associated with District Cooling Systems
The installation & maintenance costs of district cooling systems are two or three times higher than the conventional systems, which might act as a significant growth challenge for the District Cooling Market in developing countries like Indonesia, Vietnam, etc., as per the country’s economy.
Growth Opportunities & Hotspots:
Proposed Greenfield Investments in Skylines during 2020-30
Kuala Lumpur, Singapore, Bangkok, Jakarta, Ho Chi Minh City, Hanoi, Metro Manila, etc., are anticipated to witness increased greenfield investments in the skyline amid their expansion. Growth in commercial areas in these areas would provide ample opportunities for district cooling providers to increase their earnings.
In recent years, the growing demand for cooling in stressed urban environments has led to the increasing popularity of efficient District Cooling Systems (DCSs) with a centralized cooling plant serving a group of buildings owing to their proven ability to be as much as 30% more efficient than the traditional, decentralized air-conditioning units.
Moreover, the rapid shift of population toward urban areas, specifically in Singapore & Malaysia, has driven the market in the region. In 2017, around 75% of Malaysia’s population lived in urban areas, with more than 7 million people living in Greater Kuala Lumpur.
Key Questions Answered in the Research Report:
Frequently Asked Questions
A. The South East Asia District Cooling Market is projected to grow at a CAGR of around 9.8% during 2022-27.
A. Commercial offices are anticipated to emerge as an area of remunerative opportunities for the leading players in the South East Asia District Cooling Market during 2022-27.
A. Increasing inclination toward energy-efficient cooling technology and massive funding in infrastructural projects are projected to drive immense growth opportunities for the South East Asia District Cooling Market in the coming years.
A. In the coming years, there will be a rise in the South East Asia District Cooling Market owing to burgeoning government investments in large-scale urban development projects, mounting adoption of district cooling due to rising environmental concerns, along with their surging installations in hotels & malls.