The India Cooling Action Plan (ICAP), launched in 2019, predicts an eightfold increase in aggregate cooling demand by 2037-38, with building space cooling expected to have a 75% share in the cooling requirement. This underscores the urgent need for sustainable cooling solutions. The ICAP prioritizes not-in-kind cooling solutions like the District Cooling System (DCS), a technology that offers a significant shift from the default individual air conditioners and large on-site chillers. A centralised plant generates and serves chilled water through a network of insulated pipes serving multiple customers in a specific area, such as townships and Special Economic Zones (SEZs), just like utilities provide electricity, water, and natural gas.
By Vibhu Saxena, Pramod Kumar Singh (AEEE); Piyush Sharma (GIZ)
Published in Hot Cool, edition no. 7/2024 | ISSN 0904 9681 |
Benefits of District Cooling Systems
DCS boasts several advantages. Combining cooling needs from various buildings reduces cooling plant capacity, increases plant efficiency, and uses natural refrigerants, leading to typical reductions of 25% in annual energy demand , 40-80% in peak power demand , and 30-35% in greenhouse gas emissions.
Space and Environmental Advantages
Furthermore, DCS frees up valuable rooftop and basement space in buildings for other uses. On a broader scale, DCS offers environmental benefits beyond individual buildings. It reduces the urban heat island effect, promotes resource efficiency through circularity, reduces stress on the electricity grid supply infrastructure, and enables a transition to natural refrigerants.
Global Success Stories
The success of DCS implementations in Malaysia, Canada , Gulf Cooperation Council (GCC) Countries, China, and Singapore solidifies its potential as a solution for the future. The technology has become the default choice for energy-efficient cooling infrastructure in several GCC countries. DCS often acts under the Cooling-as-a-Service (CaaS) model, where a DCS utility or a DCS company caters to the design-build-own-operate approach.
India’s DCS Pioneer: GIFT City
A prime example of DCS success in India is the Gujarat International Finance Tech (GIFT) City, India’s first International Financial Services Centre (IFSC). GIFT City’s DCS, operational since 2015, showcases the numerous benefits this approach offers, paving the way for future Special Economic Zones (SEZs) and townships.
DCS has also been proposed for other projects in the pipeline, such as the Hyderabad Pharma City and Chennai Fintech City. Several other sites, such as institutional campuses and commercial hubs, have embraced DCS. These sites are primarily captive cooling plants or serve a single customer.
Untapped DCS Potential
A study conducted by United Nations Environment Program (UNEP) and Energy Efficiency Services Limited (EESL) estimates a staggering DCS potential to cater to 12.57 million TR of the air conditioning demand by 2037-38, which can lead to 7,855 GWH annual energy savings, 6.6 million tonnes of greenhouse gas (GHG) emission reduction, 78,850 million litres of water savings and $ 10.5 billion investment savings from infrastructure on power plants, city transformers, cables, water supply systems, etc. However, compared to the potential, the deployments to date are minuscule.
Learning from the CGD Sector
While learnings from established global DCS markets can inform India’s implementation strategy for DCS demand activation, competitive procurement, and regulations, we have a thriving domestic success story to emulate.
The country can draw inspiration from the well-established and efficient city natural gas distribution (CGD) network, which has rapidly expanded from 50 cities, 13% population coverage, and 5.6% geographic area coverage to 300 cities, 98% population coverage, and 88% geographic area between 2014 and 2023. Drawing parallels between both sectors can inform the development and implementation of an efficient district cooling infrastructure through public-private partnerships and provide a path forward for the CaaS model.
Similar to the successful upscaling of CGD, which was catalysed by a vital pilot project and judicial support, the emerging District Cooling market in India stands to learn significantly. Vadodara was the first Indian city to offer piped natural gas for homes, starting in 1972. Initially managed by the municipal corporation, Vadodara Gas Limited (VGL), a joint venture between GAIL and the city took over in 2013.
Policy and Regulatory Needs
India’s Supreme Court mandated the use of city natural gas in 16 polluted cities in 2002, giving impetus to the use of natural gas in the transport sector. This spurred the creation of numerous CGD companies in the first decade of the 21st century, aiming to expand natural gas access nationwide and servicing domestic, industrial, and commercial sectors in addition to the transport sector.
The key to accelerating DCS adoption in the next five years lies in key aspects like awareness creation amongst policy makers, financing institutions, developers, and end users to create the required positive market. Policy level changes to recognise DCS as a key infrastructure for the cities of the future, like the case of CGD, shall be a major enabler in unlocking financial instruments for DCS projects.
In the long term, valuable lessons from India’s existing CGD framework could guide the broader implementation of DCS to ensure nationwide standardized regulation. The Petroleum and Natural Gas Regulatory Board (PNGRB), which governs CGD regulations, boasts a proven track record of stimulating demand through effective bidding rounds for the identification of CGD licensees.
Following the successful model of GIFT City, which mandated DCS use within its development regulations, upcoming townships and SEZs can be designated as “DCS Areas” with competitive bidding processes for “cooling as a service” providers.
Learning from CGD’s bidding model, particularly its non-compete period and emphasis on fair competition, can ensure greater competition in DCS. Establishing a regulatory body such as PNGRB to oversee technical standards, price regulation, and consumer and licensee rights protection would further solidify the framework.
Additionally, similar to the case of CGD, where the licensee digging the roads for laying down the pipeline for the natural gas network has to pay digging charges in the form of a Road Restoration Fee, the DC service provider shall be required to pay a similar fee to the Municipality, generating additional revenue for public works. The fee varies from state to state, and benefits are provided in case government agencies carry out this process.
A Call for Accelerated Action
By leveraging municipal waste for energy generation and utilising sewage-treated water, District Cooling Systems (DCS) can serve as anchor customers for municipalities, boosting the financial and operational feasibility of these projects. This approach promotes resource circularity in urban areas and aligns well with existing government initiatives like the Smart City Mission. Additionally, developing a dedicated District Cooling Code to regulate and guide the expansion of DCS infrastructure could serve as a crucial short- to mid-term driver for scaling up this sustainable cooling solution.
DCS offers a compelling case for public-private partnerships that bring convergence between municipal, electricity, and natural gas utilities. India can draw inspiration from Vadodara, the city that paved the way for widespread CGD implementation, adopting it in 1972. India’s Bureau of Energy Efficiency (BEE) and GIZ have embarked on a national Energy Efficient Cooling (EE Cool) program to facilitate the development of District Cooling Systems (DCS) in India, supported by AEEE and UNEP.
As part of the initiative, the program has developed guidelines for DCS, which will serve as a comprehensive guide for all stakeholders. Additionally, it is establishing a DCS hub to support policy development, project preparation, and capacity-building efforts. The program anticipates serving as a catalyst in accelerating the adoption of DCS across the country.
While CGD adoption took over 30 years to reach scale, the urgency of the climate crisis necessitates a more expedited response. By emulating the success story of the CGD sector and the initiatives taken by PNGRB, but this time for DCS implementation across the country, India has the opportunity to become a regional leader in this critical space.
For further information, please contact: Vibhu Saxena, vibhu@aeee.in
“Learning from the past, cooling for the future: District Cooling and India’s City Gas Distribution Infrastructure” was published in Hot Cool, edition no. 7/2024. You can download the article here:
