The global district cooling market is set for solid growth over the next seven years buoyed by high growth regions such as Middle East & Africa (MEA), said a top research company.
The market, valued at around $20 billion in 2018, is anticipated to expand at a CAGR of more than 7% by 2027 to hit $32 billion, stated Transparency Market Research in its report.
North America and Middle East & Africa (MEA) were the key regions of the district cooling market in 2018. North America dominated the global district cooling market mainly due to increasing focus on the adoption of renewables and efficient usage of energy resources.
The commercial end-user segment accounted for major share of the district cooling market, increasing utilization of these systems in commercial sectors such as hotels, malls, and offices.
However, now MEA is a major hotspot for district cooling market, due to its hot climatic conditions in the sub-region with temperatures ranging between 35°C and 55°C, said the report.
It is anticipated to expand at a rapid pace during the forecast period. Air conditioning typically accounts for 60% to 70% of energy consumption during the peak summer months in the UAE, the report added.
According to industry experts, district cooling utilises approximately 50% less energy. Thus, it helps lower cost for owners and governments alike, they added.
District cooling also protects the environment by decreasing carbon dioxide emissions.
Empower has district cooling capacity of more than 1.43 million RT. It accounts for around 70% market share in the UAE.
According to experts, human activities have contributed substantially to climate change through the addition of CO2 and other heat-trapping gases to the atmosphere. Clearing of the land for agriculture, industry, and other human activities has increased the concentration of greenhouse gases.
One of the most immediate and obvious effects of global warming is the increase in temperatures around the world. This, in turn, is anticipated to boost the demand for district cooling systems during the forecast period.
Significant expansion in the real estate sector, rise in urbanization, and growth in population in developing countries such as China, Brazil, Mexico, and India have increased the consumption of building energy for heating and cooling needs.
High rise buildings in the Middle East and in mature countries in Europe and North America are decreasing natural ventilation. These are a few factors that increase the need for mechanical means of air conditioning and therefore energy consumption.
Transparency Market Research said significant rise in primary energy consumption, greenhouse gas emissions, and peak electricity demand drives the requirement for district cooling services as a sustainable energy solution.
This enables local communities to gain economic and environmental benefits of a mature technology.
In terms of end-user, the commercial segment constituted major share of the global district cooling market in 2018.
Variations in climatic conditions such as high temperature coupled with costly glass exteriors in airports, hotels, colleges, malls, and offices result in extremely high indoor temperatures.
Utilization of district cooling systems can provide a sustainable solution, which is expected to meet the high demand for refrigeration, stated Transparency Market Research.
On the market outlook, it said the global district cooling market is anticipated to be consolidated with few players accounting for large share of the market.
The three major players operating in the market as of 2018 are Emirates Central Cooling Systems Corporation (Empower), Engie, and Veolia, accounting for a combined market share of around 71%.
The other key ones include ADC Energy Systems, Emirates District Cooling, Stellar Energy, Keppel Corporation, Logstor A/S, Shinryo Corporation, Dalkia, Singapore Power (SP) Group, and Alfa Laval AB.-TradeArabia News Service
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