The district cooling system, according to IDEA’s “District Cooling Best Practice Guide”, is a long-term utility service business. By their very nature, district cooling systems are often structured as utility infrastructure. In this article, we shall explore the key characteristics of district cooling that distinguish it as a utility infrastructure business, as well as the contractual obligations of the district cooling system operator or owner.
Definition of a utility infrastructure business
A utility infrastructure business invests in physical infrastructure assets that provide utility services to consumers. The infrastructure usually consists of generation assets (such as power plants, which generate electricity) and transmission assets (such as power transmission lines, which transmit and distribute power to the consumers). The utility company commits to heavy upfront investment in these physical infrastructure assets in return for long-term supply contracts with the consumers. Examples of businesses in the infrastructure sector range from water, gas, and electricity to transportation and even heating and cooling energy. Due to the extended life span of the infrastructure, there are significant recurring costs for the repair and maintenance of these assets.
Key features of long-term utility infrastructure businesses include:
High barriers to entry: The requirement for a significant initial capital investment serves as a potent barrier to entry for new competitors. Established utility companies usually enjoy a significant first-mover advantage over newer players seeking to enter the business.
Monopolistic or oligopolistic market structure: Many long-term utility infrastructure businesses operate in markets that are monopolistic or oligopolistic in nature, meaning that there are only a few dominant players in the market.
Long-term contracts: Utility companies enter into long-term contracts, usually lasting decades, with their consumers. The long time horizon provides a stable stream of cash flow, allowing the servicing of debt payments and the distribution of profits to shareholders, representing a return on their investment and the return of investors’ capital.
Regulatory oversight: Utility infrastructures often provide essential services to the community and have significant impacts on the local economy. For these reasons, many utility infrastructure companies are subject to regulatory oversight.
The United Nations Environmental Program, in its publication titled “District Energy in Cities: Unlocking the Full Potential of Energy Efficiency and Renewable Energy“, stated that: • Cities account for over 70 percent of global energy use and 40 to 50 percent of greenhouse gas emissions worldwide. • Half of the cities’ energy consumption is for heating and cooling. • Building up modern district energy in cities is one of the least expensive and most effective ways to cut down on emissions and primary energy use.
United Nations Environmental Program (UNEP) Report – District Energy in Cities
Based on the above numbers, there is no doubt that urban comfort cooling in cities has an effect on greenhouse gas emissions around the world. The United Nations Environmental Program (UNEP) is advocating district cooling in cities as a viable solution for decarbonizing urban comfort cooling. The district cooling plant offers many benefits over the conventional in-building chiller plant. In this article, we will explore the key differences between the district cooling plant and the in-building chiller plant.
A district cooling plant is a centralized cooling system that provides cooling energy to multiple end-user buildings in a district through a network of chilled water distribution piping. The central chiller plant produces chilled water, which is then circulated through the distribution piping to the buildings that require cooling. The chilled water is then used in the buildings’ HVAC systems for comfort cooling or process cooling.
Definition of an In-Building Chiller Plant
An in-building chiller plant is part of a building’s HVAC system that provides comfort cooling to the building’s occupants. It consists of one or more chillers, pumps, cooling towers, and other components necessary to produce and distribute chilled water throughout the building.
Main Components of a District Cooling System
District Cooling is a Utility Infrastructure
The district cooling plant is part of a utility infrastructure that supplies chilled water to multiple end-user buildings for the purpose of comfort cooling or process cooling. This makes it different from the in-building chiller plant, which is part of the building’s HVAC system. The district cooling plant is operated and maintained by a third-party provider, whereas the in-building chiller plant is typically managed by the building owner or operator.
Profit Center vs Cost Center
To a district cooling operator, the district cooling plant is a profit center that generates revenue and net income through the sale of cooling energy. The operator is responsible for the operation, maintenance, and repair of the district cooling plant. On the other hand, the in-building chiller plant is part of a building’s HVAC system, and the cost of air conditioning is usually built into the gross rental, calculated on a per-square-foot basis. Therefore, to a building owner, the in-building chiller plant is a cost center that incurs operation and maintenance costs in addition to capital depreciation charges.
Industrial Grade vs Commercial Grade Equipment
A district cooling plant is built to the standards of an industrial plant and utilizes high-efficiency industrial-grade equipment for its process. This robust equipment is designed to operate continuously and reliably with high availability. In contrast, an in-building chiller plant is part of a commercial building and is made up of commercial-grade equipment, which may not be as robust as the equipment used in a district cooling plant.
District Cooling operates 24×7
A district cooling plant is required to operate 24×7 without interruption or disruption. This is because the end-user buildings rely on the district cooling plant for their cooling needs. Any downtime at the district cooling plant can have a significant impact on the end-user buildings. Due to stringent availability and reliability requirements, the district cooling plant is equipped with robust, industrial-grade equipment and provided with adequate equipment redundancy to prevent unscheduled outages. In contrast, an in-building chiller plant usually operates according to the normal office hours or the operating hours of commercial retail tenants. It is not uncommon to see the building chillers switched off during the night.
Cooling as a service vs on-premise chilled water generation
The district cooling plant is part of an energy utility business that offers cooling as a service, while the in-building chiller plant is essentially an on-premise chilled water generation asset. From a building owner’s perspective, opting for cooling energy as a service from a district cooling plant is an asset-light strategy. The building owner does not have to commit to a substantial initial capital investment in an in-building chiller plant to get access to cooling energy. Instead, they pay for the cooling energy on a “pay as you go” basis, usually billed on a monthly basis. Furthermore, the operation and maintenance of the cooling energy plant are outsourced to the district cooling operator, allowing the building owner to focus and concentrate on their core business.
Economy of Scale Translates into Cost and Energy Efficiency
The district cooling plant serves a much larger cooling demand compared to the in-building chiller plant. Hence, the economy of scale enables the district cooling plant to utilize technology options such as thermal energy storage and high-efficiency series-counterflow chillers, which lower operation costs and increase energy efficiency. This translates into a lower cost of cooling energy for the end-users and a more sustainable energy solution for urban comfort cooling.
Conclusion
The key differences between the district cooling plant and the in-building chiller plant have been explored. Understanding these key differences is essential for engineers who are involved in the planning, design, development, operation and maintenanace of district cooling systems. The district cooling plant offers many advantages, including being part of a utility infrastructure, utilizing industrial-grade equipment, operating 24×7, and offering cooling as a service. The economy of scale enables the district cooling plant to be a more cost-effective and sustainable energy solution for urban comfort cooling.
Chilled Water Storage, being a form of sensible energy storage, utilizes a large insulated tank as a storage vessel for chilled water. In District Cooling Plants, Chilled Water Storage is used to store the excess chilled water generated by the chillers during periods of low cooling demand. During peak periods, when the cooling demand exceeds the chiller operating capacity, the chilled water tank is discharged, releasing the stored cooling energy to meet the shortfall in the chiller operating capacity.
Schematic – chilled water storage tank in a district cooling plant
The chilled water storage system has the following characteristics:
Chilled Water Storage is the process of generating and storing cooling capacity, in the form of chilled water, during off-peak hours to meet parts of the peak cooling demand.
Decouples chiller operation from cooling demand.
Reduces peak chiller capacity.
Increases chiller load factor.
Transfers energy consumption during peak hours to off-peak hours.
Chilled water storage in a district cooling plant reduces the installed chiller capacity and enables capital cost savings
A chilled water storage system supplements the cooling capacity of the chillers during peak hours, thereby allowing a substantial reduction in the required operating capacity of the chillers. The smaller chillers will also be able to operate at higher capacity loads for longer hours, resulting in optimum asset utilization.
Figure 1: Chilled water storage decouples cooling energy production from cooling demand
Chilled water storage effectively decouples cooling energy production from cooling demand. As shown in the graph above, chillers are operated continuously during off-peak hours, from 2200 to 0800 hours, even when cooling demand is less than the chiller production capacity. The excess cooling energy from the chillers is stored in the chilled water storage tank. During peak hours, from 0800 to 2200 hours, cooling demand exceeds chiller operating capacity, and the stored energy is discharged to supplement chiller production capacity in meeting the higher cooling demand.
Figure 2: Chiller sizing in a traditional chiller plant without chilled water storage
In a traditional central chiller plant system, without chilled water storage, the chiller operating capacity must be chosen to match the maximum cooling load on the design day. Using the cooling load profile shown in the chart above as an example, the chiller operating capacity must match the peak cooling load of 16,975RT, which occurs only once per 24-hour cycle. Every other hour, the chiller plant will run at a lower part load. This is not conducive to the efficient use of production assets.
Figure 3: Chiller sizing with chilled water storage
With the inclusion of a chilled water storage system, the total chiller operating capacity does not have to match the maximum design day cooling demand. Furthermore, the chiller operation can be decoupled from the end-user cooling demand, allowing the total chiller operating capacity to be sized considerably smaller than the maximum cooling load. As shown in the chart above, proper sizing of the chiller operating capacity allows the chillers to run continuously throughout the 24-hour cycle. The chilled water storage system is charged during off-peak hours and then discharged during peak hours to supplement the chillers’ chilled water production.
The incorporation of chilled water storage allows the district cooling plant to have a smaller installed chiller capacity, resulting in substantial capital cost savings in terms of chillers, cooling towers, the balance of plant equipment, and electrical and control systems.
The potential capital cost savings from chilled water storage include the following:
Smaller chiller capacity and ancillary equipment
Smaller cooling towers and ancillary equipment
Smaller electrical system
Reduced plant size
Reduced piping costs
Chilled water storage in a district cooling plant reduces operation and maintenance costs
In addition to the capital cost savings, the District Cooling plant will also be able to reduce the operation and maintenance costs of the plant.
There will be fewer chillers, cooling towers, pumps, and other ancillary equipment to operate and maintain with a chilled water storage system, lowering the overall operation and maintenance cost of the district cooling plant significantly.
Many electricity utility companies use chilled water storage as a demand management strategy to shift demand for power generation from peak to off-peak hours.
Power generation during off-peak hours is advantageous to the electric utility for the following reasons:
Base load power generation is more efficient than peaking power generation plants.
Demand shifting increases the load factor of base load generating plants while decreasing demand for expensive and inefficient peaking plants.
Transmission and distribution losses are lower during off-peak hours.
Many electrical utilities offer incentives to encourage the adoption of thermal energy storage technology such as chilled water storage due to its obvious benefits in demand management. Differential electricity energy charges (higher peak hour energy charge and lower off-peak hour energy charge) and longer off-peak hours for charging the storage system are among the incentives offered.
Figure 4: Electricity tariff incentives for chilled water storage in Malaysia
These utility incentives have the potential to significantly reduce the electrical utility bill for a district cooling plant that uses chilled water storage, making chilled water storage a viable option for Malaysian district cooling systems.
Chilled water storage in a district cooling plant increases energy efficiency and reduces carbon dioxide emissions
In a District Cooling Plant, chilled water storage also enables the chillers to operate at a higher and more constant load continuously throughout the day. This leads to improved asset utilization efficiency and higher average chiller COP.
Thermal energy storage enables more chillers to operate at night when the ambient wet-bulb temperature is lower which allows for lower cooling water temperature to be supplied to the chiller condenser. The lower compressor lift will increase chiller COP and improve overall chiller plant efficiency.
Increased on-site energy efficiency
The load leveling or peak shaving operation mode shifts a significant portion of chiller operation from peak hours to off-peak hours. Because of the lower ambient temperature, chillers operate more efficiently during off-peak hours than during peak hours. Chilled water storage allows chillers to operate continuously at close to full capacity and optimum efficiency, improving chiller energy utilization even further.
The low flow, high chilled water delta T design also helps to improve chilled water pumping efficiency.
Increased source energy efficiency
From the standpoint of the power grid, shifting power demand from peak hours to off-peak hours is beneficial for a number of reasons. Lowering peak power demand reduces power generation from the inefficient peaking power generators. With the shift in demand to off-peak hours, there is greater demand for power generation from the base load power generators, which are significantly more energy efficient than peak generators.
Furthermore, transmission and distribution losses are lower during off-peak hours, contributing to the energy efficiency improvement of the power grid.
Lowering CO2 emissions
Increased energy efficiency, both on-site and at the source, will result in lower CO2 emissions.
Chilled water storage in a district cooling plant reduces carbon footprint throughout the life cycle of the system
By lowering the installed chiller capacity in a district cooling plant, chilled water storage helps to lower resource utilization throughout the district cooling system’s life cycle, including construction, operation and maintenance, repair, and disposal. Consequently, a district cooling system will have a lower life-cycle carbon footprint than individual in-building chiller plants serving the same end-user space.
Additional benefits of incorporating chilled water storage in a district cooling system
Additional advantages of chilled water storage in district cooling include the following:
System redundancy – A chilled water storage system can provide critical backup cooling for mission-critical applications.
Operational and maintenance flexibility – By decoupling chilled water production from cooling demand, a chilled water storage system adds operational and maintenance flexibility to a district cooling plant.
Increase district cooling system capacity without adding more chillers – In a brownfield district cooling system, a chilled water storage system can be installed as a satellite plant to supplement cooling demand during peak hours, thereby alleviating peak load bottlenecks.
District cooling has the potential to improve the energy efficiency while also lowering the carbon footprint of comfort cooling in urban areas. The following discussion demonstrates how district cooling technology can be used to achieve these two important objectives:
How does district cooling improve the energy efficiency of cooling energy production?
Due to economies of scale, the district cooling system can adopt energy-efficient technology such as industrial grade high-efficiency chillers, series-connected chiller modules, thermal energy storage, and cogeneration or combined heat and power.
Thermal energy storage shifts cooling energy production from peak hours to off-peak hours.
District Cooling is a cost-effective and energy-efficient technology for urban comfort cooling. Due to its many technological, environmental, and economic benefits, District Cooling is adopted in a variety of different applications. This article seeks to show selected examples of the different applications of District Cooling around the World.
District cooling system has two major competitive advantages over in-building cooling plants, which makes it a cost-effective and energy-efficient solution for urban comfort cooling. The two advantages are:
Efficient Asset and Resource Utilization
Efficient Energy Utilization
This article discusses in detail the competitive advantages of a district cooling system compared to conventional in-building cooling plants.
Introduction
In conventional comfort cooling in an urban environment, each building is equipped with its own cooling system. The cooling capacity depends on the size and the usage of the building. The building cooling demand determines the type of cooling technology. Smaller offices and residential buildings are typically provided with air-cooled technology, which has higher unit energy consumption. Larger commercial or office buildings will invariably be installed with water-cooled electrical chillers.
In a modern city with an equatorial climate, like Singapore, approximately 70% of electricity consumption in commercial buildings is attributed to comfort cooling and two-thirds of that consumption is used to power the in-building chiller plants.[1] This energy statistic underscores the importance of optimizing the energy usage of air conditioning in the urban environment. District Cooling technology holds the promise of significant improvement in the energy efficiency of comfort cooling.
A district cooling system does away with the in-building cooling plants by providing a centralized source of energy as a utility service. The District Cooling model comprises a Central Chiller Plant generating cooling energy to be supplied to each individual End-user building via a network of distribution pipes.
District cooling systems have certain competitive advantages compared to conventional in-building cooling plants. These advantages translate into real-world benefits, which make district cooling technology a cost-effective and energy-efficient cooling solution for comfort cooling in the modern city.
District cooling is the generation and distribution of cooling energy in the form of chilled water from a central chiller plant to multiple end-user buildings for the purpose of comfort cooling. The chilled water produced at the central chiller plant is transported to the end-users via a network of chilled water distribution piping.
Main Components of a District Cooling System: District Cooling Plant, Piping Network and End-user Buildings
As shown in the diagram above, a District Cooling System consists of the following primary components:
The District Cooling Plant is a Central Chiller Plant which generates the thermal energy in the form of chilled water.
The Piping Network which transports and distributes the chilled water to the End-user Buildings.
The End-user Buildings which subscribe to the District Cooling Service and consumes the thermal energy.
Cities account for over 70 percent of global energy use and 40 to 50 percent of greenhouse gas emissions worldwide.
Half of cities’ energy consumption is for heating and cooling.
The above figures show that comfort cooling is a major consumer of electricity and is also responsible for a high percentage of greenhouse gas emissions in the urban environment. The same publication advocates for the adoption of district cooling as a sustainable energy solution for the modern city.
Aerial View of a District Cooling System
District cooling is the generation and distribution of cooling energy in the form of chilled water from a central chiller plant to multiple end-user buildings for the purpose of comfort cooling or process cooling. The chilled water produced at the central chiller plant is distributed to the consumers via a network of chilled water distribution piping.
District cooling systems achieve economy of scale by aggregating the cooling loads from a large user base into a central chiller plant. The large cooling demand seen by the district cooling system allows the adoption of energy-efficient technology such as industrial grade high-efficiency chillers, series-connected chiller modules, thermal energy storage, and cogeneration.
District cooling systems are often structured as energy utilities which provide cooling energy as a service. As a modern, cost-effective, and energy-efficient cooling energy solution, district cooling delivers numerous benefits to its multiple stakeholders.
District cooling is a sustainable, energy-efficient solution for generating and supplying cooling energy to multiple end-user buildings in a local district. In this article, we will discuss what district cooling is, how it works, and its benefits, along with examples of iconic projects worldwide that have successfully adopted district cooling.
What is district cooling?
District cooling systems produce cooling energy in the form of chilled water at a central chiller plant. The chilled water is supplied to multiple end-user buildings via a piping network for comfort cooling. In traditional in-building air-conditioning systems, each building is provided with its own refrigeration system for producing chilled water. Apart from a few larger-scale developments, most buildings that are smaller in size tend to adopt more energy-intensive cooling technologies such as air-cooled packaged units or water-cooled chiller units without a thermal energy storage system. Compared to traditional in-building cooling plants, the district cooling system offers a sustainable and energy-efficient solution for urban comfort cooling.
District cooling is not new and is considered a mature technology with a well-proven track record. According to ASHRAE, the concept of district cooling can be traced back to the 1880s, and the first commercial district cooling systems were built in the 1930s. While technology has been around for a long time, it has seen a resurgence of interest in the past few decades, particularly in the Middle East, Europe, and South East Asia.
