Introduction to District Cooling in the Asia-Pacific

DISTRICT COOLING MARKET OUTLOOK 2024 ASIA PACIFIC India Thailand Singapore Philippines Malaysia Indonesia Australia

INTELLIGENCE

WITH RISING TEMPERATURES COMBINED WITH POPULATION AND ECONOMIC GROWTH IN SOME OF THE WORLD’S HOTTEST AREAS, THE DEMAND FOR COOLING IS PROJECTED TO TRIPLE BY 2050 IF NO MEASURES ARE IMPLEMENTED.

By Mikael Jakobsson President

Peter Lundberg Executive Director

Asia Pacific Urban Energy Association (APUEA)

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INTRODUCTION TO DISTRICT COOLING IN THE ASIA PACIFIC

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any countries in the Asia-Pacific region have committed to achieving net-zero greenhouse gas emissions by the middle of the century. To meet these ambitious goals, national governments are revising their energy and climate strategies.

Currently, cooling accounts for roughly 10% of global GHG emissions.

However, with rising temperatures combined with population and economic growth in some of the world’s hottest areas, the demand for cooling is projected to triple by 2050 if no measures are implemented.

This growing challenge has led to cooling sometimes being referred to as the "elephant in the waiting room," highlighting its critical role in the energy transition and as an emerging leading contributor to global warming. District Cooling systems provide an efficient solution to address this surging demand and are poised to play a significant part in advancing the energy transition across the Asia-Pacific region.

APUEA District Cooling Market Outlook 2024 - Asia Pacific

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COOLING DEMAND DRIVERS The key factors driving the rising demand for cooling include a warming climate, greater use of cooling applications, and the urban heat island effect. Together, these factors are leading to higher energy consumption for cooling and associated environmental impacts, including those from refrigerants. Within the next decade or two, the demand for cooling is projected to surpass that for heating—a significant shift. While the Paris Agreement strives to limit global temperature rise to 1.5°C above preindustrial levels, current trends suggest we are on track for an increase exceeding 3°C.

It’s also important to note that the growing use of cooling systems is not solely a response to a warming climate but is also driven by urbanization and economic growth.

Additionally, the urban heat island effect, common in densely built cities with heat-absorbing surfaces and minimal vegetation, adds to this demand. The heat released from air conditioner condensers and cooling towers can further raise urban temperatures by several degrees Celsius, making the challenge even greater.

Figure 1: AC utilization for selected economies in Southeast Asia (source: APUEA)

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THE KEY FACTORS DRIVING THE RISING DEMAND FOR COOLING INCLUDE A WARMING CLIMATE, GREATER USE OF COOLING APPLICATIONS, AND THE URBAN HEAT ISLAND EFFECT.

Figure 2: Urban Heat Island profile (source: Urban Land Institute)

DISTRICT COOLING – WHAT IS IT?

DISTRICT COOLING BENEFITS

A district cooling system produces chilled water in a centralized chiller plant and distributes it to consumers for comfort or process cooling. The definition of district cooling is not unified and remains a topic of debate. In interviews with academics and professionals across the Asia-Pacific region, definitions were linked to one or more of the following characteristics:

District Cooling systems are well-suited for cities and urban areas with high cooling demands which includes many cities in the Asia Pacific. They are also scalable and offer numerous advantages over conventional stand-alone cooling systems, including:

• Centralized cooling serving multiple buildings • Centralized cooling serving several independent (legal) entities • Centralized cooling for neighborhood or a larger area • Citywide cooling systems, similar to traditional district heating At APUEA, district cooling is often defined as: “A centralized cooling system for multiple buildings where economies of scale are achieved compared to individual cooling technologies.”

• Up to 50% lower energy consumption • Up to 30% reduced installed cooling capacity • Integration of renewable electricity from solar and wind sources • Potential to reduce peak loads through Thermal Energy Storage (TES) systems • Reduction of refrigerant volume and leakage • Mitigation of the Urban Heat Island Effect • High availability and long lifespan • Competitive cooling tariffs and lower operation and maintenance (O&M) costs • Vast market potential in the AsiaPacific region, particularly for mixeduse developments, central busines districts, transit-oriented districts, industrial parks, airports, hospitals, universities, hotels, and data centers.

DISTRICT COOLING SYSTEMS ARE WELL-SUITED FOR CITIES AND URBAN AREAS WITH HIGH COOLING DEMANDS WHICH INCLUDES MANY CITIES IN THE ASIA PACIFIC. THEY ARE ALSO SCALABLE AND OFFER NUMEROUS ADVANTAGES OVER CONVENTIONAL STAND-ALONE COOLING SYSTEMS

APUEA District Cooling Market Outlook 2024 - Asia Pacific

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INTRODUCTION TO THE DISTRICT COOLING MARKET IN THE ASIA PACIFIC The history of District Cooling in the Asia Pacific goes back to the 1970’s when the first District Cooling system in Asia Pacific was developed in the Senri Chuo Area in Osaka (Japan) in conjunction with the Osaka Expo. The system is a combined District Heating and District Cooling System (DHCS), as 150 systems are across Japan.

In China, District Cooling was recognized more widely through the Guangzhou University District Cooling system back in 2004, even though District Cooling schemes had been developed earlier.

Another prominent District Cooling system in China is at the Shanghai Pudong International Airport which was established in 2001. Many of the more than 150 District Cooling systems in China are today part of DHCS or CCHP (combined cooling, heating and power – also known as “tri-generation”) schemes.

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In Southeast Asia, and arguably all of Asia, the Marina Bay District Cooling system in Singapore stands out as the most well-known project of its kind. Beyond this iconic system, Singapore has five (5) additional District Cooling systems in operation and three (3) more under development, making it the leader in District Cooling penetration across the Asia-Pacific region. Malaysia leads in the total number of projects in the region, with over 30 District Cooling systems implemented nationwide. Meanwhile, Thailand is the fastest-growing District Cooling market in Southeast Asia with eight (8) systems in operation and five (5) more under development.

The Philippines has five (5) active District Cooling systems, while Myanmar has developed one system with the Yangon CBD District Cooling project. Vietnam is another economy where District Cooling is expected to see significant growth in the coming decade, driven by urbanization and the push for energy-efficient solutions. In Indonesia, District Cooling has recently started to get recognized with the landmark Smart City project Nusantara Capital City. Bali international

airport is the only District Cooling project in operation, while District Cooling is expected to grow in the coming decade.

India has eight (8) District Cooling projects in operation and six (6) under development. Looking at the Asia-Pacific region as a whole, India is the fastestgrowing District Cooling market, with the potential to develop schemes that could total an installed capacity of over 12,000,000 TR in the coming decades.

District Cooling is already recognized in India’s Cooling Action Plan (ICAP), and is supported by national and international organizations.

More detailed insights into the District Cooling markets below, including list of District Cooling systems in operation, and under construction can be found in this market outlook.

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India Thailand Singapore The Philippines Malaysia Indonesia Australia

INTELLIGENCE

APUEA District Cooling Market Outlook 2024 - Asia Pacific

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APUEA Intelligence

District Cooling Market Outlook 2024 - Asia Pacific