A higher level

New CEO plans to take the district cooling provider to the next level

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Sujit Pahar, CEO, Tabreed
Sujit Pahar, CEO, Tabreed

MEP Middle East speaks exclusively to Tabreed’s new CEO, Sujit S. Parhar, about his plans to take the district cooling provider to the next level.

Parhar has 11 years’ experience in the utilities and infrastructure sectors in Singapore. Prior to his latest appointment, he worked for SembCorp Industries, a Singapore-based utilities company, where he was senior vice-president and head of regional business development.

“This is an exciting time to be joining Tabreed. District cooling is an essential utility for the delivery of the Abu Dhabi 2030 Vision, and Tabreed is committed to playing a vital role in the Emirate’s growth.

This year we expect to deliver an additional seven new plants in Abu Dhabi alone,” says Parhar.

“In terms of utilities in the region as a whole, we are the only player with the track record and branding that we have. We are not here trying our hand at building a new business. We are strengthening the management team to gear up for the next chapter of Tabreed, which is to deliver the Abu Dhabi 2030 Vision, and I think investors are beginning to get that message.”

Installed capacity

Tabreed will have to increase its current installed capacity of about 300 000 TR fivefold in order to meet the requirements of Abu Dhabi’s 2030 Vision. “We are part of Abu Dhabi, and are committed to its 2030 Vision. We are going to be here for a very long time delivering on that objective,” says Parhar.

Tabreed has 34 district cooling plants in operation at present, and is commissioning a further 16 this year. “Business is good, and we foresee growth within the next 15 years that is going to be quite demanding on us. For the Abu Dhabi 2030 Vision to be realised, you are looking at an estimated additional 1,5 million tons of refrigeration capacity in terms of district cooling,” says Parhar.

“We have seen a bit of a slowdown in terms of developers holding back developments, but as of the last couple of months, it has picked up again. We have seen developers looking at district cooling for new developments. The good thing about Tabreed is that people know we deliver, and that our plants are reliable and efficient, so to a certain extent we are the supplier of choice. And then there is the peace of mind derived from the reliability factor – each of our plants today has been designed to store about 75% of the day’s water in the plant itself, so even if the water supply goes down, they can still operate and render a service.

Synonymous

“An interesting thing when I was developing a district cooling plant about a year ago for my previous company, my clients would not stop saying that they ‘wanted Tabreed’ in terms of district cooling. It has become synonymous with the industry as a whole. We have gotten very good mileage out of our track record of always delivering on-time.

“I think we have had a reliability factor of 99,9%, and the only reason we had the 0,1% shortfall was because we had a power outage in the entire city of Dubai. Other than that we have had no issues with reliability, as you would normally have with lesser-designed equipment,” says Parhar.

“One of the things the board is focusing on now is strengthening the management team, and inculcating an investor-class management style for an utilities business. All utilities businesses around the world are synonymous with stable, recurring, long-term efforts. Maybe Tabreed has not been portrayed as an utilities company, so we are focusing on creating awareness with current and potential investors,” comments Parhar.

Business model

Explaining Tabreed’s business model, he says the company does not ‘spec build’ any plants. “All our plants are built on the back of contracts. The cycle begins when the developer comes to us, and then we draw up a master plan to see how we can deliver that, whether in phases or in one go. Typically our plants are built on a ‘just-in-time’ basis, so we are ready when the customer is ready. One of our key goals is to be ready when a customer starts the fit-out process, as this is one of the most important aspects from the construction side.”

In terms of current projects, Parhar says Tabreed is in the process of commissioning 35 000 TR of cooling capacity on Yas Island. “It is being commissioned as we speak. We are flushing the system on both sides right now, with imminent delivery of the first chilled water.” While the total capacity of the Yas Island district cooling plant is 65 000 TR, this will be brought on-line in phases as the project progresses.

Yas Island is a 25 square kilometre island located strategically between the coast and Abu Dhabi. It will feature a range of world-class hotels, theme parks, golf courses, mega malls, apartments and villas. It will also boast the world’s Ferrari theme park, with the world’s fastest roller coaster, while the inaugural F1 Etihad Airways Abu Dhabi Grand Prix will be held on 1 November 2009.

Largest in world

Tabreed’s district cooling plant under construction at The Pearl in Qatar will set a world record in terms of refrigeration tonnage. “At 120 000 TR, it will be one of the biggest in the world to be built as a single plant,” reveals Parhar. Apart from The Pearl, Tabreed has one other district cooling plant under construction in Doha’s downtown business district.

Parhar says that, while ordinary customers may be getting a bit more sophisticated in terms of their requirements, “district cooling is essentially a very simple utility. There is no rocket science behind how it is procured. We are selling chilled water in the desert. It is an interesting concept, but very simple. The customer’s water goes through a plate heat exchanger in an energy-transfer station. We do not sell air-conditioning; we supply chilled water.”

While the fundamentals are well-established, “what is important is having the relevant experience to optimise plants. A lot of our time is spent on this as it is a major challenge. I get weekly updates on the efficiencies of all our plants,” notes Parhar, as this is a key performance indicator. How does this translate into both a marketing and a business strategy?

“We try to engage our customers in order to understand exactly what their requirements are. We do not want to shove a fixed solution down their throats, but want to ensure they get a solution that actually works. From a business perspective, we look at how we fund the project going forward, and how we manage the risks. A lot of big utilities companies have fallen down on risk management. We strive to ensure that all the relevant checks and balances are in place,” concludes Parhar.

Major benefits of district cooling

• The average lifespan of industrial equipment is 30 years compared to 15 years for commercial equipment;
• District cooling systems consume far less energy than air- and water-cooled systems;
• A small maintenance team looks after the central plant, compare to the large team needed to maintain many condensing units;
• Improved efficiency reduces carbon dioxide emissions, while the central plant room uses ozone-friendly refrigerants. Leakage from a single central plant is much lower than from many scattered units;
• Air-con equipment consumes about 70% of total building energy, and constitutes 70% of peak electricity demand. By shifting that load to a central plant, the load is reduced substantially, as is the number of substations and the cabling requirements;
• Peak shaving is controlled easily if district cooling is applied, which is critical in the case of continuous or standby power.

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