Market Research Report

UAE District Cooling Market Research Report: Forecast (2023-2028)

By Production Technique (Free Cooling, Absorption Cooling, Electric Chillers, Others (Heat Pumps, etc.)), By Application (Hospitality, Healthcare, Commercial & Retail, Government &...Transportation, Industrial, Residential, Others (Religious Institution, etc.)), By Region (Dubai, Abu Dhabi, Sharjah & Northern Emirates), By Company (Empower, Tabreed, Emirates District Cooling(Emicool), Pal Cooling Holding LLC, Others) Read more

  • Environment
  • Feb 2023
  • 92
  • ET33026

Market Definition

District cooling system delivers chilled water and space conditioning to consumers. Such systems are used in various locations, including homes, shopping centers, lodging facilities, dining establishments, cold storage warehouses, workplaces, companies, campuses, and military sites.

Market Insights & Analysis: The UAE District Cooling Market (2023-28)

The UAE District Cooling Market is projected to grow at a CAGR of around 10.12% during the forecast period, i.e., 2023-28. The UAE is taking the lead in the development of district cooling as a significant energy-efficient utility sector chosen by the governments of the Gulf nations. The Middle East and Africa region is crucial to reversing climate change and advancing global efforts to cut carbon emissions. In arid climates, cooling is a constant and energy-intensive operation, hence district cooling offers significant energy savings.

In the region's new and developing megacities, where district cooling has established a firm footing, this benefit is being realized. Since, 70% of the total electricity consumption goes into air conditioning in Dubai, the government is planning to meet its 40% cooling needs from district cooling by 2030. The use of district cooling in Dubai alone has been found to save close to 650GWh of electricity in 2020.

Report Coverage Details
Study Period Historical Data: 2018-21
Base Year: 2022
Forecast Period: 2023-28
CAGR (2023-2028) 10.12%
Region Covered Dubai, Abu Dhabi, Sharjah & Northern Emirates
Key Companies Profiled Empower, Tabreed, Emirates District Cooling(Emicool), Pal Cooling Holding LLC, Others
Unit Denominations USD Million/Billion

 

Moreover, due to a robust project pipeline sector, the UAE district cooling industry saw little to no operating delays, in contrast to other markets that experienced adverse effects or delays due to government restrictions and lockdowns enforced to stop the spread of COVID-19. The market is expected to be further boosted by robust construction activities, projects, and company partnerships for technical progress across the nation. Moreover, with the new set of rules to be introduced, the district cooling industry wiould likely become more effective & customer-focused as it would promote transparency & establish stakeholder accountability. Additionally, it would enable consumers to understand the cost-effectiveness of district cooling, in turn, instigating demand, further impacting the UAE District Cooling Market size.

Market Dynamics

Key Driver:

  • Associated Cost-Efficiency and Long-Term Service

Due to the accompanying cost-efficiency and long-term service, many businesses in the country are implementing district cooling systems. As a result of using 50% less energy than air conditioners, district cooling systems require less initial expenditure and ongoing maintenance. Airports, business buildings, university campuses, and residential towers are examples of large-scale establishments in the UAE that benefit significantly from district cooling. The system is based on a central cooling plant that cools its grid using a network of insulated underground pipes transporting chilled water. In addition, the equipment's ability to run without issue for up to 30 years encourages the adoption of new technologies, thereby propelling industry growth further.


UAE District Cooling Market Research Report: Forecast (2023-2028)

Growth Opportunity:

  • Technological Enhancements Upgrading the Overall Capacity of Prevailing Cooling Plants

Further, the overall capacity of the existing cooling plants and ongoing development projects is expected to witness an upgradation with technological advancements. For instance, Empower has awarded contracts totaling $51.73 million (AED190 million) for developing its fourth district cooling plant in Dubai's Business Bay. Upon completion, the Business Bay project, which consists of six district cooling plants, will be the largest district cooling project in the world, with a total cooling capacity of 350,000RT thanks to the new plant's 50,000RT output.

In addition, key market participants in the UAE collect cold water for use in their operations from oceans, seas, rivers, lakes, and other waste-cooling energy sources and then distribute it via DC system networks to urban companies. Therefore, easy cooling production techniques, cheap operating costs, and a favorable client base made possible by the technology will increase demand for it.

Key Trend:

  • Ease of Remote Installations Resulting in Increased Real Estate Value

Another factor contributing to the growing popularity of these cooling systems in the UAE is their ability to be installed remotely, which boosts real estate value by freeing up additional space for other operational needs, increases business operational efficiency, and fuels the expansion of the district cooling market. Moreover, due to the expanding use of cooling systems in oil and gas refineries, production facilities, and manufacturing plants, the market is anticipated to expand across the industrial sector. These systems will enhance the outlook for the industry as temperatures rise and sustainability becomes more of a priority in the UAE.

Market Segmentation

Based on Application:

  • Hospitality
  • Healthcare
  • Commercial & Retail
  • Government & Transportation
  • Industrial
  • Residential
  • Others (Religious Institution, etc.)

The Residential segment captured a significant market share in the historical period. The growth can be attributed to the escalating population across the country, increasing the demand for high-class infrastructure projects along with extensive government initiatives toward the construction of housing projects, thus propelling the need for efficient cooling systems in the UAE. Additionally, since energy consumption in the country is largely driven by the residential sector, the demand for energy-efficient district cooling systems is swiftly augmenting across the UAE. Thus, large-scale residential projects are imposing a considerable impact on the district cooling market.

Based on Production Technique:

  • Free Cooling
  • Absorption Cooling
  • Electric Chillers
  • Others (Heat Pumps, etc.)

Electric chillers will likely gain traction in the coming years owing to their dependable coefficient. Large-scale projects can be finished quickly and effectively by organizations with the usage of a variety of DC technologies. Among the well-known technologies are electric and absorption chillers. However, because of their superior coefficient performance, electric chillers are recommended. These chillers are more widely accepted because they use up 50% less floor space than absorption chillers. Conversely, using absorption chillers in the energy system helps reduce the amount of cooling powered by electricity while also lowering carbon dioxide emissions.

Regulatory Landscape

As the grace period for businesses expired on September 30, 2022, the Dubai government gave a hint to the new district cooling regulations in June 2022. According to the new rules, district cooling permit holders are required to create and publish a customer charter and evaluate performance against it, as well as to deliver chilled water, return deposits promptly, reduce the occurrence of excess contract capacity estimates, and implement penalties for poor energy performance. In addition, they are also responsible for monitoring and reporting health and safety, among other obligations.

Gain a Competitive Edge with Our UAE District Cooling Market Report

  1. The UAE District Cooling Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
  2. This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
  3. The UAE District Cooling Market Report aids in assessing & mitigating risks associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

Frequently Asked Questions

   A. The UAE District Cooling Market is projected to grow at a CAGR of around 10.12% during 2023-28.

   A. Associated cost-efficiency and long-term service is likely to drive the market further during the projected time frame.

   A. The prominent players anticipated to stiffen the competition globally are Empower, Tabreed, Emirates District Cooling(Emicool), Pal Cooling Holding LLC. Others

   A. Residential sector is anticipated to emerge as an area of remunerative opportunities for the leading players in the UAE District Cooling Market during the forecast period.

   A. Dubai would provide lucrative prospects for the UAE District Cooling Market in the years ahead.

   A. Ease of remote installations resulting in increased real estate value is the significant trend projected to shape the UAE District Cooling Market through 2028.

   A. Technological enhancements upgrading the overall capacity of prevailing cooling plants is expected to present remunerative opportunities for the leading players in the UAE District Cooling Market during the forecast period.

  1. Market Segmentation
  2. Introduction
    1. Product Definition
    2. Research Process
    3. Assumptions
  3. Executive Summary
  4. The UAE District Cooling Market Trends & Insights
  5. The UAE District Cooling Market Dynamics
    1. Growth Drivers
    2. Challenges
  6. The UAE District Cooling Market Growth Hotspot & Opportunities
  7. The UAE Upcoming Projects & their Execution Time Frame
  8. The UAE District Cooling Market Porter’s Five Forces Analysis
  9. The UAE District Cooling Market PESTEL Analysis
  10. The UAE District Cooling Market SWOT Analysis
  11. Digital Transformation in the UAE District Cooling Market
  12. The UAE District Cooling Market Value Chain
  13. The UAE District Cooling Market Supply Analysis
  14. The UAE District Cooling Policy & Regulation
    1. By Energy Strategy
  15. The UAE District Cooling Market, By Projects, 2022
    1. New Renewable Energy Projects
      1. Solar
      2. Wind
      3. Others
    2. Ongoing & Upcoming Cooling Plants
  16. The UAE District Cooling Market Analysis, 2018-2028F
    1. Market Size & Outlook
      1. By Revenues (USD Million)
      2. By Volume (Tons of Refrigeration)
    2. Market Share & Outlook
      1. By Production Technique
        1. Free Cooling
        2. Absorption Cooling
        3. Electric Chillers
        4. Others (Heat Pumps, etc.)
      2. By Application
        1. Hospitality
        2. Healthcare
        3. Commercial & Retail
        4. Government & Transportation
        5. Industrial
        6. Residential
        7. Others (Religious Institution, etc.)
      3. By Region
        1. Dubai
        2. Abu Dhabi
        3. Sharjah & Northern Emirates
      4. By Company
        1. Market Share (USD Million/Tone of RT)
        2. Competition Characteristics
  17. Dubai District Cooling Market Analysis, 2018-2028F
    1. Market Size & Outlook
      1. By Revenues (USD Million)
      2. By Volume (Tons of Refrigeration)
    2. Market Share & Outlook
      1. By Production Technique
      2. By Application
  18. Abu Dhabi District Cooling Market Analysis, 2018-2028F
    1. Market Size & Outlook
      1. By Revenues (USD Million)
      2. By Volume (Tons of Refrigeration)
    2. Market Share & Outlook
      1. By Production Technique
      2. By Application
  19. Sharjah & Northern Emirates District Cooling Market Analysis, 2018-2028F
    1. Market Size & Outlook
      1. By Revenues (USD Million)
      2. By Volume (Tons of Refrigeration)
    2. Market Share & Outlook
      1. By Production Technique
      2. By Application
  20. The UAE District Cooling Market Key Strategic Imperatives for Success & Growth
  21. Competitive Benchmarking
    1. Competition Matrix
      1. Operating & Revenue Model
      2. Product Portfolio
      3. Target Markets
      4. Pricing Analysis
      5. Target End Users
      6. Research & Development
      7. Strategic Alliances
      8. Strategic Initiatives
    2. Company Profiles (Business Description, Product Offering, Strategic Alliances or Partnerships, Target Clients etc.)
      1. Empower
      2. Tabreed
      3. Emirates District Cooling(Emicool)
      4. Pal Cooling Holding LLC
      5. Others
  22. Disclaimer


UAE District Cooling Market - Segmentation Slide