National Central Cooling Company (Tabreed) has left no stones unturned in aligning its vision with the UAE government’s growth and sustainability plans such as Abu Dhabi Economic Vision 2030, UAE Vision 2021, UAE Energy Plan 2050 and UAE Green Agenda 2030. Dr. Afif Saif Harhara Al Yafei, Vice President – Regional Asset Management, Tabreed, says: “Sustainability sits at the heart of the UAE’s national development agenda and this is evident through the key pillars and initiatives outlined in major economic growth plans.”
Al Yafei says that Tabreed is a partner of choice for governments and corporations across the GCC, in providing environmental-friendly cooling solutions. The firm has a business model that is built around long-term contracts, many of which are for public sector infrastructure projects and it has long-term contracts with high-profile customers such as the Roads and Transport Authority (RTA) and Aldar Properties, and it provides cooling for iconic developments including Sheikh Zayed Mosque, Ferrari World Abu Dhabi, Dubai Metro, and Dubai Parks and Resorts.
Talking about the market for district cooling in the Middle East, Al Yafei says: “The Middle East presents ideal growth opportunities for district cooling companies, with year-round warm climates, rapid urbanization, economic diversification, a growing infrastructure spend, and a growing population driving the market size. Cooling demands in the GCC are expected to triple by 2030 as a result of these growth drivers. Cities are key expansion areas due to growing urbanisation – cities now consume 70% of global energy according to the UN. The concentration of buildings in a compact area means using water can cool whole neighbourhoods rather than individual apartments or houses each having their own cooling solutions.”
Global Market Insights predicts the Middle East’s district cooling market is likely to exceed $12bn by 2024, doubling its estimated value of $6bn in 2016.
Al Yafei says: “District cooling plays a vital role in fostering the sustainable development, with its lower energy requirements, peak cooling time and cost saving potential, and eco-friendliness. The Paris Agreement on Climate Change further highlighted the need for highly efficient and sustainable district cooling in the region, and the governments of the GCC provide supportive frameworks for district cooling companies to operate. Given that UAE is one of the most sophisticated and highly penetrated markets for district cooling, there is a need for regulation in the sector and we would welcome increased competition in the market, with protection for consumers, developers, and the broader economy alike.”
The Regulatory and Supervisory Bureau for electricity and water in Dubai (RSB) has been mandated to include the Dubai’s district cooling sector. During a site visit organised by Tabreed at one of its plants in Yas Island, Abu Dhabi, Jasim Husain Thabet, Tabreed’s CEO, told MEP Middle East on the mandate: “We are one of the biggest cooling players in the market and we see that as a positive outcome. It shows that the government really believes in district cooling and they want to increase the penetration of the district cooling market. So that’s music to my ears.”
Dr. Afif Saif Harhara Al Yafei, vice president – Regional Asset Management, Tabreed
Tabreed has stayed ahead of the game by employing innovative solutions to optimise the total project life cycle cost. In Bahrain, the company improved electrical efficiency by approximately 15%, working closely with its customers, through a combination of equipment upgrades (optimised set points). This was done by modification of Secondary Chilled Water Pump (SCHWP) logic to run based on the remote index Differential Pressure Transmitter (DPT) and modification of all Energy Transfer Station (ETS) primary control valve logic to run based on the secondary side supply temperature, thus allowing the plant distribution pumps to run on full auto mode - according to supply temperature set point.
The company also commissioned a reverse osmosis plant in Dubai which led to the reducing of potable water usage. This meant that a 200 m3 per day reverse osmosis and ultra-filtration water polishing unit was installed which allowed for significant reduction in potable water usage. In addition, the polishing unit could operate at full capacity when TSE is made available.
Tabreed will soon be making an announcement about a business intelligence solution, which will highlight its efforts to optimise the overall performance of its plants.
Jasim Husain Thabet, Tabreed’s CEO
One of the main challenges facing the district cooling sector according to Al Yafei is that the need for district cooling is controlled by the developer. “In the initial planning phases done by the developer, district cooling is not fully factored in. So, the design of the building, community, plot or project may prove to be difficult for the district cooling company to work around with. This may incur extra costs that could have been avoided if the district cooling projects team was involved in the early stages of planning. If the district cooling company is brought in the initial phase, they can provide recommendations on the location of the plant, best suited for aesthetics as well as optimal operations, the network required, and finally the cooling capacity required to efficiently cool the project,” Al Yafei says.
Thabet agreed to this view and said that overdesign had been there historically. He said: “I think it’s an old habit of consultants to overestimate loads so as to factor extra safety. But we have learned from that and now we work very closely with our partners when it comes to future projects, to make sure that we understand their requirements and if there is overdesign, we like to highlight with them early to help them (clients) mitigate that. Because in the end this is going to be a long term partnership. We are building the asset for 20-30 years so we have to make sure that we have the right cooling for those customers.”
Business and focus
Tabreed’s key markets are the UAE and Saudi. Thabet said: “We are building new plants in Abu Dhabi for some government customers. The focus for 2019 is to continue to grow in our stronghold and explore future markets. We are exploring opportunities outside the GCC.”
Al Yafei proudly says that Tabreed “today is the only district cooling company that has a presence across the GCC region, and the only listed district cooling company worldwide”. He adds: “With our financial strength and leading market position, we are confident in moving onto new markets and are currently looking into the feasibility of entering Egypt and India.”
In August 2017, ENGIE, the global energy company, acquired 40% of the shares in Tabreed for approximately AED2.8bn. Headquartered in France, ENGIE is a multinational energy leader and expert operator in the business of electricity, natural gas and energy services with a successful heritage spanning over a century.
Speaking at the Yas Island site, Thabet spoke about the ENGIE transition: “Engie was buying into an established company with 20 years of operation and it was very smooth. I am very excited and optimistic having a shareholder like ENGIE that really adds a lot of benefits.”
Tabreed’s expansion strategy is in three specific areas: adding connections to existing plants, such as at Al Raha Beach and Yas Island in Abu Dhabi, Sheikh Zayed Road (SZR) in Dubai, and Jabal Omar in the Holy City of Mecca, Saudi Arabia; seeking opportunities to build new district cooling plants for new real estate developments across the GCC; and acquiring existing district cooling plants−recent examples of this include the acquisition of Al Maryah Island and Nation Towers plants in Abu Dhabi.
Al Yafei concludes: “While Tabreed remains fully invested in meeting its regional partners’ cooling needs with reliable, high quality and cost-efficient solutions, the company is also well poised to capture growth in new geographies. This will be done through harnessing its 20-year successful track record and the support of its major shareholders, Mubadala and ENGIE, who provide access to international markets. Tabreed is also targeting inorganic growth and has a strong appetite for acquisitions, particularly of smaller players in the market. Tabreed is well capitalised for when future opportunities arise, we have a strong balance sheet and AED400m of cash.”