At the recent World Utilities Congress (WUC) event, you highlighted the potential of thermal energy storage as a cost-effective energy storage solution, significantly cheaper than comparable battery storage systems. Can you elaborate on the rationale behind this perspective?
Thermal Energy Storage (TES) is integrated with district cooling systems to enhance efficiency, reduce costs, and optimise energy usage. During off-peak hours, when electricity demand and tariffs are lower, the chilled water produced by mechanical chillers is stored in large insulated thermal storage tanks. When cooling and electricity demand peak during the day, the district cooling system draws from the stored chilled water instead of operating the chillers.
The combination of solar power generation and TES allows for effective load shifting, where the energy generated during the day can be stored and used for cooling at night or during peak hours. The capacity of TES system is significant, allowing for the storage equivalent of up to 20 or 30 megawatts (MW) of energy, which can be deployed for 2- to 3-hour peak demand period.
The effective use of nighttime storage ensures that the stored energy is sustainable, regardless of when it is consumed. Since the energy was originally generated from solar power, it maintains its green credentials.
What progress has been made in recognising the energy storage capacity of district cooling systems?
Regulators have recognised energy storage capacity that is available in district cooling. We successfully piloted a peak shifting project in Abu Dhabi in collaboration with the Abu Dhabi Distribution Company, with oversight from the Department of Energy, as a proof of concept.
The next step is to explore how to monetise this system and identify the critical points where it is most needed. It’s essential to evaluate the commercial aspects, as someone has to invest the capital.
Such an initiative must also be commercially viable for the district cooling operator. Existing TES systems are optimised for the district cooling plant. Allowing access to other users could limit their availability for the district cooling operator. But the beauty of TES lies in its scalability. We can build another thermal storage tank that will serve as storage for solar energy or for peak shifting. The district cooling utility also benefits as these additional thermal storage tank provides a valuable reserve. Whether it is actively used or not, having this reserve is always beneficial. Moreover, by adding more tanks, CAPEX savings on chiller capacity can potentially increase from 30 percent to as much as 50 percent.
At the end of the day, the benefits emerge when we integrate solar energy, the storage capability of district cooling and energy shifting as a cohesive system. We are looking to apply this concept in Dubai and Saudi Arabia.
How do you manage the efficiency of your cooling systems given the unpredictability of ambient temperatures, especially during extreme weather conditions we have seen lately?
The synergy, diversity and storage benefits of district cooling are best realised through networked plants. In the case of water cooled chillers, the effectiveness of the evaporation process in the cooling towers, which cool the condensers, decreases when humidity levels are high. One way of addressing this challenge is by interconnecting large-scale district cooling plants, so that they can pitch in when the loads are higher. Thermal energy storage back-up can be augmented as well.
With islanded plants you are not able to take advantage of diversity as they are built according to specific requirements. If the need is for 100 tonnes of cooling, the system is designed for exactly that. Thermal storage will become almost impossible because you need an area for your own use. In case of emergency, you’re down because you are not in a network.
At the event, you highlighted how geothermal-based cooling can be effectively monetised in data centres, drawing insights from the success of the G2COOL project in Abu Dhabi, which is the Gulf region’s first district cooling project to utilise geothermal energy. How does this process work?
We understand that companies like Microsoft and Google prioritise sustainable energy for their operations. Their top concerns tend to be power availability in sufficient quantities, and its sustainability, not price. However, much of the power generated in the region still relies on fossil fuels, and the heat produced during this process is not recouped.
Therefore, the most effective solution for these companies is to source cooling from a renewable heat source like geothermal energy. This is super sustainable as the consistent cooling needs of data centres align perfectly with the steady thermal output provided by geothermal sources. There is one-time capital expenditure on absorption chillers to provide the cooling. These chillers work with low temperatures, allowing them to effectively use the heat to produce additional cooling.
While I can’t provide specific figures, the efficiency levels for this system would be quite favourable. Importantly, this is all captive. The companies have control over generation and the cooling of their data centres. Everything is contained within their operations, so they are not at the mercy of a grid or anything like that. This also aligns with their commitments to environmental, social, and governance (ESG) principles and sustainability.
We’re pitching this solution to them because we believe it is more viable than simply adding geothermal energy to an existing grid that is primarily used for residential purposes.
Lastly, what are the current market opportunities for district cooling in the Middle East and Asia, and how does the regulatory landscape impact these markets?
Regionally, Saudi Arabia is the biggest market for district cooling. India, which is potentially one of the biggest markets in Asia, is on the verge of regulating district cooling. But most Asian markets currently lack regulations, leading to a degree of uncertainty regarding their development. Regulations are an enabler because they level the playing field, bring in transparency between the utility, the customer and the regulator, and set expectations. On the other hand, we also need time to learn how these markets operate. We studied the Indian market for about 4 to 5 years before entering into an alliance with Tata Realty. It’s been the same in Egypt as well.
(Reporting by Anoop Menon; Editing by SA Kader)
(anoop.menon@lseg.com)
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