ABU DHABI, UNITED ARAB EMIRATES - April 14, 2008: Dirty air conditioners contribute to an illness known as Red Death, seen at 4th Street and 15th Street in Abu Dhabi. ( Ryan Carter / The National ) *** Local Caption *** na16reddeath.JPG
Air conditioning accounts for 70 per cent of the UAE's electricity consumption, meaning the country has a priority to maximise efficiency. District cooling can provide energy savings, say some. Ryan CShow more

Chilling our homes: district cooling v AC



ABU DHABI // With energy prices climbing and some emirates facing electricity shortages again this summer, experts have questioned whether the UAE should invest in large, centralised plants for its cooling needs.

The issue was at the heart of debates at the Climate Control Summit in Abu Dhabi where, for two days, industry experts compared the concept known as district cooling to traditional systems used in single buildings.

Air conditioning accounts for up to 70 per cent of the country's electricity. Ensuring homes and offices are cooled as efficiently as possible is a national priority.

District cooling chills the water needed for air conditioning in a central plant, then uses it to cool several buildings or an entire development.

District cooling systems are already in operation at several developments across Abu Dhabi and Dubai emirates.

The process is more efficient due to economies of scale, said George Berbari, the chief executive of the engineering firm DC Pro, and an advocate of district cooling. "The economy of scale itself allows us to hire better designers, better contractors and better operators," said Mr Berbari.

A district cooling plant uses up to 0.95 kilowatts of electricity per tonne of cooling, compared to a stand-alone system that takes up to 1.6 kilowatts per tonne, he said.

Performance can be further enhanced by a practice known as thermal storage, which chills water and stores it for later, when there is higher demand.

Energy savings are compounded when domestic hot water, electricity and cooling are produced together at the district plant.

But while district cooling has the potential for significant energy savings, the reality can be different, said Salah Nezar, the technical core team manager at Qatar Project Management. "On paper, district cooling is more healthy for society," he said. "But the reality is that not all district cooling plants are meeting the energy efficiency they are theoretically supposed to."

Plants designed to handle huge air conditioning loads often worked at less than half capacity, creating financial problems for the district cooling providers and for end-users who faced large air conditioning charges, said Mr Nezar.

Mr Berbari acknowledged the problem, saying the UAE was using less than half of its two million tonnes of installed district cooling capacity, with the slowdown in property development leading to reduced demand.

"This is also a combination of lack of knowledge and experience on the part of the [cooling] provider, and the master developer feeding them wrong information and some bad practices with businesses that build big systems for commercial interest," he said.

However, air conditioning systems in individual buildings can also be too big, he said."The same case is happening with the stand-alone industry, which has eight million tonnes actual capacity, while the installed capacity is close to 16 million," said Mr Berbari.

Representatives at the event were split into two camps. But there would never be a simple choice between one or the other, said B Surendar, the editor of an industry magazine, Climate Control Middle East, and organiser of the event.

"This entire summit was not meant to pit one camp against the other," he said. "End users are looking for air conditioning that can provide them with cooling comfort and that is reliable and affordable. Energy efficiency is a fourth parameter that needs to come into the equation."

Greater government intervention was required, said delegates. "The practice is affected by short-term profit," said Mr Nezar. "The real estate industry needs to shift from looking at short-term profit and include the life cycle costs of buildings. The Government can encourage innovation by providing incentives."

Hotel Silence
Auður Ava Ólafsdóttir
Pushkin Press

Tips for holiday homeowners

There are several factors for landlords to consider when preparing to establish a holiday home:

  • Revenue potential of the unit: location, view and size
  • Design: furnished or unfurnished. Is the design up to standard, while being catchy at the same time?
  • Business model: will it be managed by a professional operator or directly by the owner, how often does the owner wants to use it for personal reasons?
  • Quality of the operator: guest reviews, customer experience management, application of technology, average utilisation, scope of services rendered

Source: Adam Nowak, managing director of Ultimate Stay Vacation Homes Rental

Company Profile

Name: HyveGeo
Started: 2023
Founders: Abdulaziz bin Redha, Dr Samsurin Welch, Eva Morales and Dr Harjit Singh
Based: Cambridge and Dubai
Number of employees: 8
Industry: Sustainability & Environment
Funding: $200,000 plus undisclosed grant
Investors: Venture capital and government

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal

Rating: 2/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

 

Company: Instabug

Founded: 2013

Based: Egypt, Cairo

Sector: IT

Employees: 100

Stage: Series A

Investors: Flat6Labs, Accel, Y Combinator and angel investors


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