CCME February 2014

www.climatecontrolme.com In transit: Dong

NEWS – tabreed reports 1 bn kWh energy savings, 15% net profit increase in 2013 p10

Mingzhu, gree, talks about her business ethics and her vision for the company p28

emerson, Distech Controls receive plaudits at 2014 ahr expo p19

Special country report: an update on Saudi arabia's quest for sustainability p42

Face-to-face: John

Bainbridge, al hoty-Stanger, on the culture of testing and certification in the region p30

‘VrFs will go viral’: Syed Jafar imam, ahiCarrier p32

FEBRUARY 2014

Empower CEO, Ahmad Bin Shafar is delighted at reportedly reaching the one million TR summit with the acquisition of Palm District Cooling EXCLUSIVE INTERVIEW... INSIDE PUBLICATION LICENSED BY IMPZ

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Vol. 9 No. 2 | February 2014 04 FROM THE EDITOR

The nurturing of technology

HAPPENINGS

contents

06 The region 16 At large 22 Marketplace

26 ASHRAE UPDATE 34 EVENT HIGHLIGHTS:

WFES

Africa: The new frontier for renewable energy African leaders at WFES discuss the potential of their continent’s sustainable energy future.

42 COUNTRY REPORT:

SAUDI ARABIA

The Kingdom's quest for sustainability To avert a potentially precarious energy crisis, Saudi Arabia has embarked on a slew of projects to encourage energy efficiency and diversification of its energy sources. Jerome Sanchez has the report.

35

COVER STORY

'WE ARE SEVEN DIGITS' Empower, following its acquisition of Palm District Cooling (PDC) from Istithmar World, reportedly has a capacity of one million TR of District Cooling. Ahmad Bin Shafar, the CEO of Empower, in conversation with B Surendar on the ramifications of the deal...

INTERVIEWS

28 IN TRANSIT

Growing with Gree Dong Mingzhu, President and Chairperson of the Board of Gree, spoke to Jerome Sanchez about her meteoric rise, her business ethics and vision for Gree.

INTERVIEW

30 Testing times Jerome Sanchez speaks to John Bainbridge, General Manager, Al-Hoty Stanger Laboratories, about how the region has tried to measure up to international testing and certification benchmarks.

INTERVIEW

SYED JAFAR IMAM

JOHN BAINBRIDGE

DONG MINGZHU

32 ‘VRFs will go viral’

February 2014

The market for VRF systems will grow exponentially, considering the base itself is small, says Syed Jafar Imam, the Regional Director for AHI-Carrier, in a conversation with B Surendar…

www.climatecontrolme.com

3

FroM the

editor Publisher Dominic De Sousa

THE NURTURING OF TECHNOLOGY

Managing Director & Associate Publisher Frédéric Paillé | fred@cpi-industry.com Editorial Director & Associate Publisher

T

B Surendar | surendar@cpi-industry.com

he rise of steamed power in the 1800s sparked such a frenzy of expectations that the very same engineering community that had pioneered its use, found it hard to meet either the intensity or the volume of demand. In shipping, in particular, the emergence of steam power was seen as a silver bullet – one line after another saw in the new technology a route to meteoric growth and prosperity. In short, the promise of steam stoked visions of an overnight jettisoning of sail power. It quite didn’t work that way, however, especially for those lines that had hastily concluded they could do Atlantic crossings by relying on steam alone.

Eventually, they had to settle for a hybrid of sail and steam, at least till the time the new technology had added several layers of innovation to work itself into a state of readiness.

In age after age, there are several instances where society has grossly overestimated innovation – or at least the pace of evolution of the applicability of innovation. And in this age, where society genuinely believes anything is possible at the blink of an eye, never before have engineers been under more pressure to deliver. As a result, a measured approach is often being forced to yield to a mindset of speculative leap of faith. To use sport as an analogy, people often pay scant attention to the fact that Usain Bolt did not break a time barrier overnight; it took legends before him to create several stations where what was previously inconceivable became a possibility.

It is the same with chilled water, or any other approach to air conditioning – policy-makers would do well to realise that the technology needs time to settle down to match up to current expectations.

There is a need to nurture it and to offer it all the support it requires to enable it to make a difference.

If the settling for hybrid in the interim saved steam from the crushing weight of expectations, so can better governmental support for District Cooling, in the form of preferential power tariffs, say.

In the same way, it is perhaps high time policy-makers, if convinced that District Cooling is the way forward, revisited the reticulation conundrum – should governments take the responsibility of establishing piping networks, at the very least on a shared financial basis? Scandinavia has already showed the way of a government entity establishing a District Cooling regime and, then, offloading it to private enterprise.

District Cooling needs a solution for it to be able to help the GCC. In Saudi Arabia, for instance, the need for power is urgent. A combination of unrelenting population growth, a fast-expanding industrial sector, increase in demand for air conditioning and highly subsidised electricity tariffs is stoking demand for 120 GW by 2020. It is an inescapable target, and District Cooling can more than delay the inevitable need for investment – and not to forget, the resulting increase in carbon emissions – the promise of renewables notwithstanding, if given the modicum of a chance.

CEO Nadeem Hood | nadeem@cpidubai.com Assistant Editor Jerome Sanchez jerome@cpi-industry.com Contributing Editors Pratibha Umashankar prati@cpi-industry.com Anoop K Menon anoop@cpi-industry.com Senior Business Development Consultant Stephanie McGuinness stephanie@cpi-industry.com Design Genesis Salao | getty@cpi-industry.com Webmaster Troy Maagma | troy.maagma@cpimediagroup.com Database/ Subscriptions Manager Purwanti Srirejeki purwanti@cpi-industry.com Advertising Enquiries Frédéric Paillé: +971 50 7147204 fred@cpi-industry.com Stephanie McGuinness: +971 50 5034087 stephanie@cpi-industry.com USA and Canada Kanika Saxena Director (North America) 25 Kingsbridge Garden Cir Suite 919 Mississauga, ON, Canada L5R 4B1 kanika@cpi-industry.com Tel/fax: +1 905 890 5031 Euro Zone and UK Sicking Industrial Marketing Wilhelm Sicking

B Surendar Editor @BSurendar_HVACR

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45130 Essen - Emmastrasse 44 Tel: +49 (0)201-779861 Fax: +49 (0)201-781741 Andreas Sicking 59872 Freienohl - Kurt-Schumacher-Str. 16 Tel: +49 (0)2903-3385-70 Fax: +49 (0)2903-3385-82 News – Tabreed reports 1 bn kWh energy savings , 15% net profit increase in 2013 p10

Emerson, Distech Controls receive plaudits at 2014 AHR Expo p19

In transit: Dong Mingzhu, Gree, talks about her business ethics and vision for the company her p28

sicking-media@email.de • www.sicking.de

www.climatecontrolm

Face-to-face: John Bainbridge, Al Hoty-Stang on the culture of testing er, and certification in the region p30

e.com

‘VRFs will go viral’: Syed Jafar Imam, AHI-

Carrier p32 Special countr Arabia's quest fory report: An update on Saudi sustainability p42

Published by

FEBRUARY 2014

Head Office PO Box 13700 Dubai, UAE Tel: +971 4 375 68 30 Fax: +971 4 43 419 06 Web: www.cpi-industry.com Empower CEO, reportedly reachingAhmad Bin Shafar is delighted at the one n TR summit acquisition of Palmmillio District Cooling with the ExclusivE intE rviEw... insidE

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happenings the region

Empower acquires Palm Utilities and Palm District Cooling

USD 500 million deal creates the world’s largest District Cooling services provider

E

mpower has announced that it has acquired Palm Utilities, including its district cooling service entity, Palm District Cooling (PDC), from Istithmar World, in what is considered to be one of the largest ever acquisitions in the District Cooling industry.

The agreement was signed by H.E. Ahmad Bin Shafar, CEO, Empower and H.E. Hamad Buamim, Board Member of Dubai World, in the presence of H.H. Sheikh Ahmed bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman and CEO, Emirates Airline and Chairman of Dubai World; H.E. Mohammed Ibrahim Al Shaibani, Board Member of Dubai World and Director General of H.H. The Ruler’s Court; and H.E. Saeed Mohammed Al Tayer, Board Member and CEO, DEWA, and Chairman of Empower, the announcement added.

The acquisition will be funded through a combination of internal accruals, equity and debt financing, Empower revealed.

According to Empower, it will immediately take over all projects, functions, operations, assets and liabilities of Palm Utilities, including Palm District Cooling, which was previously owned and operated by Istithmar World.

In the context of the

6

Ahmad Bin Shafar

landmark deal, Sheikh Ahmed said: “Empower’s acquisition of Palm Utilities and Palm District Cooling is in response to the vision of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to position Dubai as a centre for sustainable development.

Climate Control Middle East February 2014

“Through this acquisition, we aim to enhance energy efficiency and meet the growing demand for district cooling services in response to Dubai’s increasing economic development, having won the bid to host Expo 2020.”

The new combined entity is also a reflection of H.H.’s vision to place the UAE at the forefront of industry and business.”

Al Tayer, observing that the deal emphasisised the importance of establishing sustainable communities across the Emirate, said: “Through this acquisition, we aim to enhance energy efficiency and meet the growing demand for District Cooling services in response to Dubai’s increasing economic development, having won the bid to host Expo 2020.”

Bin Shafar, throwing light on the subject, said: “Empower’s acquisition of Palm Utilities and PDC, which is worth about USD 500 million, is an important step towards enhancing our strategy, which aims to support Green Economy for Sustainable Development, the long-term national initiative launched by H.H. Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai. This deal will position Empower as the leader in District Cooling on a regional and international level. It will also increase the company’s market share in the UAE to about 70%, in addition to increasing its capacity to around one million Tonnes of Refrigeration (TR), and therefore, the company becomes the largest District Cooling provider in the world, from a capacity perspective….

It will also serve to develop sustainable energy practices in the Emirate, which will reflect positively on the development of this vital sector and, therefore, guarantee the availability of efficient District Cooling services in Dubai.”

Page 35: Detailed interview with Ahmad Bin Shafar

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happenings the region

Empower bags USD 600 million loan for strategic growth

Dubai-headquartered DC provider says it continues to pursue a strategy of financing its projects through an optimal mix of debt and equity

E

mpower, the district cooling services provider, has announced recently securing a USD 600 million loan through a syndicated term loan facility, underwritten through four mandated lead arrangers – Citibank, Standard Chartered, Emirate NBD and Mashreq – with a six-year term.

Repayments are scheduled to be made in half-yearly installments, with the final installment due to be made in December 2019, the announcement informed.

In this context, Ahmad Bin Shafar, CEO, Empower

said: “Empower continues to pursue a strategy of financing its projects through an optimal mix of debt and equity in order to better maximise shareholder returns.

This loan, in particular, will ensure that adequate and costeffective funding is readily available to sustain our future growth, while also driving the implementation of our landmark projects.”

Observing that the funding reflected the confidence of banks and financial institutions in its prudent strategy and sustainable business model, Bin Shafar revealed that

Tabreed posts over one billion kWh energy savings in 2013 About 570,000 tonnes of CO2 emissions eliminated in the year

N

ational Central Cooling Company PJSC (Tabreed), the Abu Dhabi-based District Cooling utility entity, has announced that its annual energy savings in 2013 reached 1.2 billion kilowatt hours (kWh). This significant reduction in energy

8

consumption translates into the elimination of approximately 570,000 tonnes of CO2 emissions, equivalent to the removal of over 110,000 cars from the streets, Tabreed highlighted.

Giving details, Tabreed said that, in the UAE alone, its 60 District Cooling plants

Climate Control Middle East February 2014

Ahmad Bin Shafar with the officials from the four banks

Empower had previously secured syndicated, as well as bilateral, loan facilities and had always met its commitments and repayment obligations as per agreed terms.

“Empower has adopted a business model that works on the strategy of investing in plants and network infrastructure driven by actual demand in a particular project,” Bin Shafar said. “This has resulted in sustainable growth of the company and [the avoidance of] financial losses witnessed in other district cooling companies in the region.” achieved a total energy saving of approximately one billion kWh, with the remaining 200 million kWh savings produced in the company’s six plants located in Saudi Arabia, Qatar, Oman and Bahrain.

In this context, Jasim Husain Thabet, Tabreed’s Chief Executive Officer, said: “In the GCC region, cooling accounts for approximately 50% of total energy consumption, and approximately 70% during the peak summer months. With an expanding population, economic growth and diversification under way, as well as continued industrialisation, it is becoming increasingly

After its recent acquisition, Empower now reportedly operates all projects, functions, operations, assets and liabilities of Palm Utilities, including Palm District Cooling, which was previously owned and operated by Istithmar World.

Against this backdrop, the company highlighted that the deal meant that Empower now has 70% market share in the UAE, with a capacity of about one million Tonnes of Refrigeration (TR), making it the largest district cooling provider in the world, in terms of capacity. vital that reliable, energy-efficient and more environmentallyfriendly cooling solutions are utilised in order to meet our growing cooling requirements.

“As a key infrastructure partner, Tabreed is proud of the role it plays in enabling the region’s, and in particular the United Arab Emirates’, economic and social development.

By decreasing the energy consumed for cooling, we are simultaneously able to protect the environment, lower our carbon footprint, and play a modest role in helping the UAE realise its vision of a sustainable economy.”

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happenings the region

Tabreed posts 15% increase in net profit in 2013 Cash generated from operations grew by 51% to AED 598 million

N

ational Central Cooling Company PJSC (Tabreed), the Abu Dhabi-based district cooling utility company, released its 2013 audited full-year financial results.

Its strong performance continued to be driven by the core chilled water business, with over 70,000 tonnes of refrigeration (TR) of new customer connections made in the year, including major projects, such as Yas Mall and Saudi Aramco, Tabreed revealed.

The company gave the following financial highlights of twelve months, ended December 13, 2013: • Net profit attributable to the parent increased by 15% to

RSB to announce results of residential water use project Region’s first in-depth survey of the kind will help design water efficiency strategies

T

he Regulation and Supervision Bureau (RSB) has announced the conclusion of the UAE’s

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AED 272.4 million (USD 74.2 million) (2012: AED 236.3 million (USD 64.3 million)) • Core chilled water revenue increased by four per cent to AED 1.03 billion (USD 279.7 million) (2012: AED 992.3 million (USD 270 million)) Jasim Husain Thabet • Core chilled water profit from operations (2012: AED 176.7 million increased by six per cent (USD 48.1 million)) to AED 347.8 million (USD • Cash generated from 94.7 million) (2012: AED operations grew by 51% 328.4 million (USD 89.4 to AED 598 million (USD million)) 162.8 million) (2012: AED • Net finance costs decreased 396 million (USD 107.8 by 19% to AED 143.6 million)) million (USD 39.1 million) In light of the company’s

first Residential End-Use of Water (REUW) Project, an in-depth survey that aims to collect reliable data on residential water consumption in Abu Dhabi.

The initiative, led and managed by RSB's Waterwise office, involved the study of water use in 150 villas in selected gated communities in Abu Dhabi, was designed to collect accurate water consumption statistics, investigate the sociodemographics of water use, determine the split between indoor and outdoor water use and help identify and explore the scale of water leaks,

Climate Control Middle East February 2014

RSB said. The data, once analysed, will reportedly be used to inform decisions and strategies for future water management and conservation programmes in the Emirate. The final results are expected to be available in the second quarter of 2014, RSB added.

Khadijah Bin Braik, Waterwise Manager, explained: “The REUW Project is the first of its kind in the UAE....

We have used the latest technology to help delve into detail. With this project, we will be able to disaggregate

positive financial showing, Waleed Al Mokarrab Al Muhairi, Tabreed’s Chairman, said: “We are pleased to announce another year of strong growth in both net income and cash generated from operations.

Tabreed’s financial and operational performance in 2013 reinforces its position as a leading utility infrastructure company, distinguished by operational excellence and one that delivers consistent, sustainable results to all its stakeholders.”

Jasim Husain Thabet, Tabreed’s Chief Executive Officer, pointed out that the company successfully connected key projects, bringing its total connected capacity across the group to 839,000 RT.

participating households’ water consumption for each end-use event and each appliance, determine average consumption per capita and per household and examine the factors influencing water use.”

Commenting on the project, Rashed Hamad Al Rashdi, Deputy Director General of RSB, said: “Understanding how and why water is used is imperative to the success of future sustainable water strategies. Projects like this one are invaluable in shaping the future of the UAE.”

happenings the region

Sheikh Hamdan opens Warsan Complex and Al Qusais Control Centre In line with DEWA’s mission to boost Dubai’s power infrastructure

H

.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance, and President of Dubai Electricity and Water Authority (DEWA), officially opened DEWA’s Warsan Complex and Al Qusais Control Centre, in the presence of H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of

Dubai Supreme Council of Energy; H.E. Matar Humaid Al Tayer, Chairman of DEWA; H.E. Saeed Mohammed Al Tayer, MD and CEO of DEWA; and DEWA’s Board Members, as well as officials from ministries and directors of governmental departments.

Announcing this, DEWA said that the new infrastructure additions were in line with

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Engineering

Climate Control Middle East February 2013

Energy

Environment

its commitment to drive the vision of H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai, to promote the sustainable development of the Emirate.

Giving further details, DEWA said that the Warsan Complex, spread over an area of 650,159 square feet, includes two transmission and distribution control centres, a 430,630-square feet administrative building, and the first ISO/IEC 17025 certified testing lab.

Speaking about the new facility, Sheikh Hamdan said: “DEWA’s projects are the

life, essence and backbone of Dubai’s infrastructure.

DEWA provides world-class services at the highest levels of reliability, quality and best international practices and technologies, to ensure the continuity of electricity and water services and achieve sustainable development in the UAE.” Affirming this, Al Tayer added that the control centres would ensure efficiency, safety and sustainability of Dubai’s power supply, maintain the required electricity reserves for emergency cases and provide quick intervention to solve blackouts.

du deploys Free Cooling System on its network Expects to reduce CO2 emissions by 7,800 tonnes by end of 2014

I

n support of the UAE leadership’s vision for a green economy, and in line with its own efforts to become a more sustainable company, du has announced the deployment of Heliocentris’ Free Cooling System on its network, claimed to be another regional first. The addition of the energy-saving technology further complements du’s existing green network

solutions, allowing the company to reduce its carbon footprint, said du, and added that the announcement coincided with World Future Energy Summit, held from January 20 to 22 in Abu Dhabi. du said that the Free Cooling System takes advantage of cooler weather in winter to minimise the operating time of air conditioning units in 100 of its base transceiver station (BTS) sites, where Heliocentris’ Energy Management Hybrid System solutions are already deployed. With the installation of additional green technology, du is reportedly able to reduce its diesel consumption and CO2 emissions by a further 7.2%, on top of the 50% reduction already obtained by the

Saleem Al Balooshi

existing solutions. Du said that it anticipates a reduction in CO2 emissions by 7,800 tonnes by the end of 2014, and plans to install the system in more BTS sites.

“With a sustainable future in mind, for our company, community and country, we were the first in the region to install green solutions on our network, back in 2011,”

February 2013

said Saleem Al Balooshi, Executive Vice President, Network Development and Operations, du. “Heliocentris’ solutions supported our efforts to reduce our impact on the environment, with energysaving solutions that have turned our network green.

By installing the Free Cooling System – another regional first for us – in our BTS sites, we are further strengthening our commitment to supporting the vision of the UAE leadership to establish the UAE as a leader in sustainable practices.”

Ayad Abul-Ella, CEO, Heliocentris, added “Our solutions are cutting-edge, and designed to exceed our customers’ requirements.

They are best-in-class examples of what is possible through the installation of green solutions.”

www.climatecontrolme.com

13

happenings the region

DEWA organises Annual Partners’ Appreciation Ceremony Event aimed at strengthening cooperation with partners

D

ubai Electricity and Water Authority (DEWA) announced organising the Annual Partners’ Appreciation Ceremony, which was attended by H.E. Saeed Mohammed Al Tayer, Managing Director and CEO of DEWA, and other dignitaries and government department heads. The ceremony, which took place at the Atlantis, The Palm, Dubai, was part of its

efforts to further strengthen cooperation and joint work with government departments and key strategic partners and support its efforts to contribute to the successful implementation of Dubai’s Strategic Plan, DEWA said.

According to DEWA, during the event, it presented its plans and developmental projects, which aim to promote Dubai as a global hub for finance, trade, and

Eng Hussain Nasser Lootah, Director General of Dubai Municipality receives the award of appreciation from Al Tayer

tourism. “In fulfilment to the Smart Government initiative launched by H.H. Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform Dubai to a ‘Smart City’ and achieve a quantum leap by providing high-end

services to partners and customers, we are proud to announce the launch of our all-new DEWA’s Partners’ e-Portal in the first quarter of 2014,” Al Tayer said.

Al Tayer reportedly honoured DEWA’s strategic partners from the government and private sectors.

ABB and Ventyx hold conference in Oman

Discussions on technologies to power the country attract energy executives

A

BB and Ventyx, an ABB company, sponsored a twoday Knowledge Sharing Conference and exhibition in Muscat, Oman, in December 2013, which was hosted by the Electricity Holding Company of Oman (EHC).

Announcing this, ABB said that upcoming and future utility projects for the next five years in the Sultanate of Oman were the key areas of discussion at the conference, where over 300 decision makers and chief players from the EHC Group were

14

present.

Apart from sharing knowledge and new technologies to develop a world-class electricity sector in the country, the conference also provided a platform to discuss plans and to network with current and future suppliers to learn about potential projects and business opportunities, the announcement revealed.

In addition to showcasing ABB’s solutions at the exhibition, Mark Maarrawy, Senior Business Solutions Consultant at

Climate Control Middle East February 2014

Ventyx, delivered the keynote address on “RealTime Monitoring and Maintenance of Assets”, ABB said.

As part of the Ventyx Middle East Club Seminar Series 2013, there was reportedly a thought leadership seminar on Asset Health on the first day of the conference, which focused on how companies can optimise the overall health of critical equipment by integrating IT and OT (Operational Technology)

to make more informed decisions across the grid.

According to ABB, Richard Jones, Senior Vice President, MENA, Ventyx, highlighted how the company helps clients leverage predictive and practice-oriented approaches to optimise operations and execute strategies for the future and minimise catastrophic failures, prioritise maintenance and replacement decisions and improve reliability, productivity and safety.

Gyproc Middle East gets EPC approval

and support this through an Environmental Impact Assessment and reports on air quality and waste management.

In this context, Easter said that his company was committed to environmental protection and had implemented strategies to reduce the impact of its global manufacturing operations on the environment, at all levels.

The award coincided with the publication of its first environmental brochure, laying out in detail environmental benefits of the plasterboard-based lightweight building systems and explaining the work it is doing in areas like training and plasterboard recycling, Gyproc informed.

Goes through Environmental Impact Assessment and reports on air quality and waste management

S

aint-Gobain Gyproc Middle East, the Abu Dhabi-based lightweight building systems manufacturer, has announced being awarded the EPC (Environmental Performance Card) approval by the UAE Ministry of Environment and Water.

The award, which follows a successful environmental audit in December, was presented to the company’s Plant Manager, Daniel Easter, and Environmental Co-

ordinator, Sheryl Salazar, at a special ceremony on January 9, the announcement added.

Revealing that the EPC scheme is designed to promote cleaner and greener production across the UAE by raising the efficiency of industrial processes, cutting emissions and raw material wastage and reducing the use of hazardous substances in manufacturing, Gyproc said that to obtain EPC approval, it had to demonstrate its commitment to the UAE

Daniel Easter and Sheryl Salazar

laws and regulations governing environmental protection and development.

This reportedly involved showing that it had robust systems and procedures in place to ensure safe environmental management

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happenings at large

shecco releases GUIDE EU 2014

Tracks upswing of natural refrigerants market

S

hecco, a marketing and communications entity with a focus on climate-friendly technologies in the HVACR sector, has announced launching the second edition of its GUIDE Europe, titled “GUIDE 2014: Natural Refrigerants – Continued Growth and Innovation in Europe”.

The publication provides an essential update on the market evolution of HVACR applications using CO2, ammonia, hydrocarbons, water and air, the announcement added.

Featuring data on the latest market trends, a business directory of over 400 companies working with natural refrigerants in Europe, and survey results from 376 European HVACR industry

experts, the guide aims to build on the 2012 edition and become the industry reference tool for those working with natural working fluids, shecco claimed.

Citing an example, shecco said that the guide gives updated transcritical (TC) CO2 supermarket maps that show an increase of 117% in the number of CO2 TC supermarkets in Europe within two years, whilst the first ever CO2 cascade supermarket maps show 1,636 supermarkets in Europe using CO2/HFC cascade systems.

The Contents of the GUIDE 2014 Europe as follows: • Natural refrigerants in the European food chain • Applications of natural refrigerants • Commercial availability of natural refrigerant solutions

• End-user views on natural refrigerants • European policy Initiatives • Case studies • European industry survey results • European natural refrigerant business directory On the occasion of the guide’s release, Marc Chasserot, GUIDE Series Publisher and shecco Managing Director, elucidated that the updated guide showed that natural refrigerants were becoming a standard solution for companies that want to future-proof their business.

Nina Masson, shecco Head of Market Research and lead author, added:

“We are publishing the GUIDE EU 2014 at a point in time when proposed Europeanlevel rules on the restricted or banned use of F-gases are expected to take effect. They will determine the direction that HVACR system and component suppliers, contractors and training institutes, but more importantly, commercial and industrial end-users, will be taking in their refrigerant choice until 2020 and beyond. The second edition of the GUIDE Europe allows for a better understanding of the opportunities in the natural refrigerant market.”

comings&goings TROX Middle East appoints new MD

Sees enormous opportunities for company with Expo 2020

T

ROX Group has announced the appointment of Matthias Kasprowicz as Managing Director of TROX Middle East, effective December 1, 2013. Kasprowicz took over as a regional MD from Thomas Orr, who will move to TROX USA/Canada, the announcement said.

Prior to his current role, Kasprowicz served as a Regional

16

Business Development & Strategy Manager for Siemens Middle East, where he was responsible for growth initiatives across Siemens Industries entire portfolio, TROX informed.

“Over the past years, Thomas Orr has led our business in a direction of growth and shaped a strong foundation where we can build our future on. I would like to thank him for his dedication and

Climate Control Middle East February 2014

Matthias Kasprowicz

remarkable commitment,” said Kasprowicz, about his predecessor.

“The TROX Group has always been dedicated to the

Middle East region and, as we glance ahead, I look forward to taking on my new responsibility within TROX and working with our partners throughout the Middle East on strategic opportunities. With the announcement of Dubai’s win to host the Expo 2020, we see enormous growth opportunities throughout the Middle East, and it is an exciting time to be associated with TROX,” Kasprowicz added.

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happenings at large

POST-EVENT HIGHLIGHTS

2014 AHR Expo attracts 61,000 attendees Visitors from over 130 countries braved a snow storm to see the latest products and technologies on display

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he 2014 AHR Expo, held on January 21-23 at the Javits Center in New York City, featured more than 1,900 exhibitors and had visitors from 130 countries all across the world. In addition to the flagship exhibition feature, AHR Expo also saw free educational programmes sponsored by AHR Expo, ASHRAE and other

endorsing associations, such as AHRI, LonMark International, BSRIA and BACNet, to name a few.

Some of the topics explored in the free seminars include building automation, increasing energy efficiency without retrofits, existing building testing, dispelling the myths about condensing boiler, retro-commissioning for comfort and energy

savings, flammable refrigerants, best practices to promote an effective Indoor Air Quality (IAQ), and energy efficiency through automated demand response.

In addition, ASHRAE conducted professional development seminars and short courses, which earned attendees 6 PDHs/AIA or .6 CEUs at completion.

There were also live product demonstrations, and workshops and reviews held during the event.

ASHRAE Winter Conference

Distech Controls recognised at 2014 AHR Expo

recognised in the Building Automation category, the announcement added.

Giving details about the IRC Solution, Distech Controls claimed that it was an end-to-end modular offering for the control of HVAC room terminal equipment, lighting, and shades; it had simplified design, installation and integration of multiapplication systems; and it was designed to deliver optimal energy savings, at the lowest total install cost, with occupancybased control strategies, daylight harvesting based on light level sensing and natural light optimisation.

The recently introduced innovation was showcased at the 2014 AHR Expo, it informed.

New IRC solution receives honourable mention in Building Automation category

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istech Controls has announced receiving an honourable mention at the 2014 AHR Expo. Selected by a panel of judges made up of ASHRAE members, Distech Controls’ Programmable VAV Controllers with the Integrated Room Control (IRC) Solution was

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Climate Control Middle East February 2014

The 2014 ASHRAE Winter Conference, held on January 18-22, in conjunction with the AHR Expo, put special focus on the design, development and operation of tall buildings.

The technical programme reportedly featured more than 200 sessions and offered various opportunities to earn New York PDHs, AIA LUs and LEED AP credits.

*To read the full stories, visit our website, www.climatecontrolme.com

Emerson wins AHR Expo Product of the Year Award Claims new product line achieves heating and cooling efficiencies

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merson Climate Technologies’ Next Generation Copeland Scroll variable speed compressor line was honoured as the 2014 AHR Expo Product of the Year in the “Cooling” category during the Innovation Award Ceremonies held on January 22 at the AHR Expo in New York City. Announcing this, Emerson said that its new

product line was chosen for recognition from among the top Innovation Award winners in 10 industryrelated categories.

Emerson claimed that, featuring the company’s second generation variable speed technology, the new product line can achieve cooling levels of 25+ SEER and heating efficiencies up to 13HSPF. Giving details of the

Brandy Powell, Emerson Climate Technologies, accepts the 2014 AHR Expo Product of the Year Award from Clay Stevens (L), AHR Expo Show Manager and Bob McDonough, Chairman of AHRI

award, Emerson said that, created by ASHRAE, AHRI and AHR Expo to recognise the most innovative and useful products among those on display at the Expo, the 2014 AHR Expo Innovation Awards

competition celebrated its 12thanniversary.

Entries were judged on the basis of innovative design, application, market impact and value to the HVACR industry, Emerson underscored.

CAIRO HEAD OFFICE: Cairo, Egypt

Tel: (202) 25161610 25163737 Fax: (202) 27549849 E-mail: admin@alliedco.org Web: www.alliedco.org

DUBAI, UAE Allied was announced as the District Cooling Best Consulting Firm in Climate Control Awards 2011 Edition.

Tel: 0971 4 297 8500 Fax: 0971 4 2652 192 E-mail: alliedae@eim.ae

Branches:

• Jeddah, KSA • Toronto, Canada

Burj Khalifa Dubai - UAE

FOUNDED TO LEAD Allied has grown into one of the leading Engineering and Project Management firms in the Middle East, boasting offices in 3 major Countries in the Middle East (Egypt, United Arab Emirates, Kingdome of Saudi Arabia).

Allied offers full range of Engineering and Project Management services provided by nearly 140 dedicated professionals distributed among Egyptian, UAE and KSA locations.

The company is a multidisciplinary consulting firm and has a track record and specialization in Buildings, Industrial Works and District Cooling and Power Generation Plants.

February 2014

www.climatecontrolme.com

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happenings at large

POST-EVENT HIGHLIGHTS

Seminar on high performing buildings at ASHRAE Emphasis on monitoringbased commissioning for continued efficiency

ASHRAE recognises HVACR industry achievements Pioneers, present practitioners and students honoured

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ointing out that the best action one can take to ensure a building is operating as designed is to look for trouble, ASHRAE reportedly held a special seminar on Effective Best Practices for Successful Building Systems Commissioning on January 20, as part of a track focused on Improving Building Performance through Commissioning, Operation and Maintenance, at its recently concluded Winter Conference.

Seminar Chair James Vallort, PE, Environmental Systems Design, in a pre-event statement said: “The concept of commissioning of buildings during new construction and renovation has grown across the globe in the past decade or so.

This has paralleled the continued push toward improved designs for energy and water efficiency.

Unfortunately, there has been less focus on helping to ensure that there is continued high performance after construction is complete. Monitoring Based Commissioning is presented as a solution.”

H Jay Enck of Commissioning & Green Build Solutions, a speaker at the event, added: “Once a building has been commissioned and is operating efficiently, the goal is to keep it that way. Even the most effectively commissioned building can go bad. That’s why it’s important to look for operational issues trouble and fix it before it becomes a costly issue.”

Enck’s presentation reportedly focused on the Application of Monitoring Based Commissioning to Building Systems. 20

Climate Control Middle East February 2014

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orty-six people were recognised by ASHRAE for their contributions to the Society and to the building industry at the Society’s 2014 Winter Conference, ASHRAE announced.

ASHRAE gave the details of the awards: The F Paul Anderson Award, the Society’s highest honour, awarded for notable achievement of outstanding services performed in the HVAC&R field, went to Presidential Member Kent Peterson, PE, Fellow ASHRAE, ASHRAE-Certified Building Energy Assessment Professional.

The Hall of Fame honours, which recognises deceased members of the Society who have made milestone contributions to the growth of HVACR technology, was posthumously awarded to Fred Wolf Jr, who contributed to the development of home refrigeration and played an active role in mass-marketing one of the first simple, inexpensive household refrigerators, the DOMELRE, in 1913.

The Milton W Garland Commemorative Refrigeration Award for Project Excellence for innovative and/or new technologies in comfort cooling applications went to Cameron E Lowry, while the EK Campbell Award for outstanding achievements by engineering educators was awarded to Jeffrey Spitler. The ASHRAE Award for Distinguished Public Service was awarded to Jeff Gatlin.

The Pioneers of the Industry Award that honours deceased individuals who have made milestone contributions to the growth of HVAC was posthumously conferred upon John Gorrie, the first American to use mechanical refrigeration for comfort cooling, and Alfred R Wolff, a pioneering heating and ventilating engineer at the end of the 19th century. To read the full story, visit our website, www.climatecontrolme.com

Focus on façade at ASHRAE Winter Conference Role of building envelope in energy saving discussed at special seminar Leading manufacturers and exporters for all HVAC ducting accessories in the region

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aying that apart from aesthetics, a building façade plays an important role in energy savings, ASHRAE discussed the role of façades in energy savings at a seminar under the Technical Program, at ASHRAE’s 2014 Winter Conference, ASHRAE announced.

Held under the rubrics The Façade Odyssey: Solutions for Design of High Performance Buildings, the seminar was part of a track focused on Systems and Equipment, and was chaired by Kent Peterson, PE, the announcement added.

According to ASHRAE, speakers from different parts of the world presented on the effect of various basic elements in design of envelope and its consequent effect on building operating energy, carbon emissions and air conditioning load. The final part of the presentation focused on future façade solutions.

Elucidating on the seminar in a pre-event news release, Peterson said: “Façade design is a vital aspect of building, largely controlled by architects as per wishes of building owners. However, based on experience of design of several green buildings, it has been found that façade optimisation can help reduce as much as 40% of building energy. This becomes an important aspect in developing economies, wherein decisions are generally based on first cost, with little importance to lifecycle cost. Emerging markets, such as Brazil, Russia, India and China, will add over 100 billion square feet in next two decades. So, better understanding of facade design will go a long way in preserving ecological balance in the world.” February 2014

www.climatecontrolme.com

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marketplace

this section contains regional and international products information

Fluke Corporation Middle East Fluke Ti200, Ti300 and Ti400 infrared cameras

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aying that they come with lasersharp auto-focus, Fluke Corporation Middle East has announced introducing the Fluke Ti200, Ti300 and Ti400 infrared cameras.

The manufacturer lists the following product features and benefits:  Fluke Ti200, Ti300 and Ti400 connect Ti200 to the Fluke CNX Wireless system, allowing them to be used as a main unit to view live measurements of up to five wireless modules (e.g. AC current or voltage modules) on its screen and integrate the data into the infrared image.  The cameras feature wireless connectivity to easily transfer images from the cameras directly to PCs, an iPad or iPhone, which can then be imported into Fluke SmartView software, a professional suite of analysis and reporting tools for optimising and analysing infrared images and producing professional reports.  They also integrate wirelessly with the new Fluke SmartView Mobile app for iPhone and iPad. Like the desktop version, the app allows users to transfer

Ti300

Ti400

images wirelessly for additional image optimisation and analysis and create professional reports enabling sharing of information without returning to the office.  Additionally, users can get approval for additional work needed or steps to be taken immediately.  They feature patented IR-Fusion technology, which merges the infrared and visual images into a single view to better discover, diagnose and communicate problems. Also, images can be viewed from full infrared to blended views to a full visible image, to precisely document problem areas.  The cameras are Bluetooth-ready and include wireless connectivity to PCs, GPS positioning and recording, streaming video, ruggedised capacitive touch screen for quick menu navigation, IR-PhotoNotes Photo Annotation System, fieldchangeable rechargeable smart batteries with charge level indicators, and high temperature measurements up to 1200°C (Ti400 model only).

Güntner Refrigeration App

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aying that it wants to make refrigeration technology and tools accessible to customers at a click, Güntner, the German-based manufacturer of refrigeration and air conditioning equipment components, has announced developing a refrigeration app offering practical functions.

The company lists the following app features and benefits:  The News function provides company news updates on an ongoing basis.  The Feedback function allows users to contact the app contact person with questions or suggestions to include or improve functions.  Customers can benefit from functions, such as material recommendations for specific applications or the Refrigerant Slide, as it provides the correlation between pressure and temperature for more than a dozen of the most commonly used refrigerants.  It offers recommendations regarding

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Climate Control Middle East February 2014

material combinations for components, depending on the planned application, which helps customers check the environmental conditions for a suitable device design at any time.  Thanks to the Converter, anyone can exactly convert the units they need.

A total of 18 refrigeration variables, such as pressure, temperature, volume and mass flow, among others, can be converted into all common international units and then displayed, enabling a common basis

for measurements, regardless of the location of the construction site.  The Service Documents function ensures that the documents for all Güntner business divisions and devices are available at all times. Documents are first sorted regionally.  The Contacts function provides an overview of all Güntner field service contact persons.  The Güntner Refrigeration App is currently available free of charge at the Apple, Android and Blackberry app stores.

Sonitec-Vortisand H 2 F Vortisand for high flow-rate applications

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onitec-Vortisand has announced releasing H²F Vortisand, specifically designed for highflow rate applications, through a series of international conferences on crossflow microsand submicron filtration technology.

Just like its original Vortisand product line, used for cooling towers, District Cooling chilled water, pre RO/DI, water reuse and other specialised polishing water applications, H²F Vortisand offers key competitive advantages, the manufacturer claims, and lists the following product features and benefits:  Speed of 50m/h (five times faster than regular multi-media filters designed for high water quality)  Efficiently removes particles of less than 1µ (10 to 50 times smaller than traditional filters)  Water savings of up to 50% during backwash versus regular sand filters

When used in cooling systems, the system provides:  Energy savings of 10% to 20% on chillers operating cost  Chemical additives savings of up to 20% while improving their efficiency  Total operating cost up to three times lower than with solid separators or regular sand filters

 Flow-rate sample for side stream application two to five times smaller than other filtration methods  LEED point(s) accumulation towards this certification on most applications.

February 2014

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marketplace

this section contains regional and international products information

Fluke Corporation Fluke ClirVu CV Series IR Windows

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 Once it is installed, there is no need to power down or remove panels, as inspections can quickly, easily, and, most importantly, safely be conducted, often with little, if any, personal protective equipment.  The AutoGround feature instantly grounds the IR window to the metal The manufacturer listed the following enclosure, eliminating the product features and benefits: need to separately ground  With an installation time of five minutes each metal component of or less, ClirVu CV Series eliminates the the window. need to sacrifice safety or compliance to  The hinged cover is easily take infrared camera readings. opened with a quarter-turn  It is torture-tested to the highest arc latch or key to perform infrared blast test ratings and, when properly inspections. It also protects the installed, maintains a panel arc test window from accidental exterior rating of up to 63 kA. impact. ointing out that more than 99% of all arc flash incidents occur when a panel door is open, exposing workers to potentially lethal amounts of energy, Fluke Corporation Middle East has announced introducing Fluke ClirVu CV Series IR Windows, which it claimed offers ultimate protection for inspectors of highenergy equipment.

Clivet Screwline 2 Xtreme WDAT-XTR Liquid chiller

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livet, the Italy-based manufacturer of chillers, air handling units and heat pump systems, has announced launching Screwline² Xtreme WDAT-XTR, the liquid chillers series, claiming that they are suitable for temperatures of up to 48°C at full load and extended part-load operation of up to 52°C in standard models. Furthermore, according to the company, they can be equipped with

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Climate Control Middle East February 2014

compressors with oversized motors in order to extend operation up to 53°C at full load and up to 55°C at part-load.

The manufacturer listed the following product features and benefits:  Screwline² Xtreme WDAT-XTR liquid chillers are equipped with screw compressors using R-134a refrigerant and dry-expansion (DX) shell and tube evaporator.

 They are ideal for extreme ambient temperature applications that require high performance, uninterrupted operation and reduced operating and maintenance costs.  They reduce maintenance costs, thanks to electronic expansion valve with precise superheat control, robust design evaporator with extra thick insulation, liquid injection to cool the compressor motor (used for safety), forced ventilation of the electrical panel and all electrical wires and components suitable for high temperature.  They provide minimum inrush current, due to automatic control of the startup sequence of compressors and fans, and avoid overheads of the host supply electricity system.  They come as packaged units for easy commissioning and management, thanks to the single water module, single power connection and protection by phase monitor from incorrect electrical connection or power surges.  Recovery of the condensation heat fulfills the need for hot water whilst the unit produces chilled water.

ASHRAE

For more updates on ASHRAE, visit the News section of our website, www.climatecontrolme.com

UPDATE

ASHRAE publishes Refrigeration Commissioning Guide

Cost-effective reference point for custom-engineered systems in commercial and industrial facilities

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aying that 60% of energy used in supermarkets is attributed to refrigeration, and that studies have shown commissioning could result in seven to 25% energy savings, ASHRAE has announced publishing a new guide outlining a commissioning process that would result in substantial savings. The book is available for free download at www.ashrae.org/freeRefCxGuidance, the announcement added.

According to ASHRAE, the guide will help achieve costeffective and cost-efficient refrigeration systems for new projects, expansions, remodels and existing systems that need a tune-up. For commercial facility owners and managers, this is believed to imply improved profitability through lower operating and service costs, as well as reduced product loss. For industrial plants, this means improved “up time” and improved labour productivity, in addition to reduced operating cost.

Also included in the Guide is information on commissioning during planning and design; construction and installation; and system start-up and first-year operation, ASHRAE revealed.

Richard Royal, who served as Chair of the committee that wrote the guide, observing that commissioning is an investment, but provides significant financial value in several ways, said: “First, systems operate more reliably with lower maintenance cost and lower energy cost when commissioning is applied as described in this Guide. Second, incorporating commissioning can reduce first cost through improved understanding of system performance and lead to better equipment design and installation methods.”

The cost of the printed version that has been available since early January is USD 99 (USD 84, ASHRAE members), and orders can be placed by contacting ASHRAE Customer Contact Center at 1-800-527-4723 (United States and Canada) or 404-6368400 (worldwide), fax 678-539-2129, or visiting www.ashrae.org/ bookstore, ASHRAE informed.

ASHRAE Oryx Chapter to hold seminar Focus on use of thermoplastic ABS pipes in HVAC system

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ccording to the organisers, the Qatar seminar, presented by David Cantwell, will deal with: 1. Material and composition 2. Applications 3. Advantages and technical comparison against steel piping in a chilled water system 4. ABS pre-insulated piping system 5. Design parameters of ABS piping in a chilled water system

The organisers have provided the following event details: Venue: Qatar University Library Building, Lecture Hall 117 Time: 9am to 1pm, including lunch and coffee break Ticket fee: • Free for ASHRAE members • QR50 for non-members, to be paid at the registration desk

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ASHRAE publishes revised standard on ventilation in healthcare facilities Standard 170-2013 provides environmental control to reduce infection and odour

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SHRAE has announced publishing ANSI/ ASHRAE/ASHE Standard 170-2013, Ventilation of Health Care Facilities, written by ASHRAE and the American Society for Healthcare Engineering (ASHE).

When the standard was first published in 2008, it was the first American National Standards Institute (ANSI) standard in the US to specifically address ventilation in healthcare facilities, ASHRAE revealed, and added that the revised standard features updates, changes and clarifications dealing with humidity, ducted returns, recirculating rooms units and duct lining, to name just a few refinements.

Underscoring that healthcare facilities can be energy extensive and that energy recovery can provide significant savings, provisions for the application of energy recovery are now specifically addressed in 170-2013, ASHRAE said. However, it added that, as the standard stipulates, if energy recovery systems are utilised, the systems cannot allow for any cross-contamination of exhaust air back to the supply airstream.

ASHRAE highlighted a few of the salient features of the revised Standard: • It addresses issues that may reduce costs to build and operate healthcare facilities.

• It allows relative humidities as low as 20% for some rooms. This may result in smaller capacity of humidification equipment, lower operating costs and reduced maintenance costs.

• It permits certain use of plenum returns in outpatient facilities, which in turn, may result in lower construction cost and operating costs.

• It addresses the application of displacement ventilation within patient rooms.

“Without high-quality ventilation in healthcare facilities, patients, healthcare workers and visitors can become exposed to contaminants through normal respiration of particles in the air,” Paul Ninomura, Chair of the 170 committee, said.

“Ventilation systems and designs for healthcare facilities are intended to provide a comfortable environment for patients, healthcare workers and visitors, while diluting, capturing and exhausting airborne contaminants, including potentially infectious airborne agents.”

ASHRAE informed that the cost of ANSI/ASHRAE/ ASHE Approved Standard 170-2013, Ventilation of Health Care Facilities, is USD 58 (USD 48, ASHRAE members), and those who wish to place orders can contact ASHRAE Customer Contact Center at 1-800-527-4723 (United States and Canada) or 404-636-8400 (worldwide), fax 678-539-2129, or visit www.ashrae.org/bookstore.

ASHRAE Qatar Oryx Chapter to hold conference First international conference on Energy and Indoor Environment for Hot Climates

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he ASHRAE Qatar Oryx Chapter has announced that it will be holding its first international conference on Energy and Indoor Environment for Hot Climates on February 24 to 26 at the Millennium Hotel, Doha Qatar. The conference will examine the latest research and energy efficiency technology in high-ambient temperature climates, the announcement added.

first conference presents papers, keynote speeches, and internationally organised sessions, and has an emphasis on systems and equipment and applications for commercial and institutional buildings.”

Informing that registration is now open, the organisers gave the following details: Registration fees are as follows: ASHRAE Member: USD 300 Non-Member: USD 400 Registration fees for students: Student Member: USD 30

Non-Student Member: USD 40 Registration fees will increase on February 1, 2014: ASHRAE Member: USD 500 Non-Member: USD 600 Paid registration includes conference proceedings (flash drive distributed onsite), lunches, and breaks. More information can be obtained at: https:// ashrae.org/membership--conferences/ conferences/ashrae-conferences/hotclimates-conference.

Organised by ASHRAE, the ASHRAE Qatar Oryx Chapter and the Qatar Environment and Energy Research Institute (QEERI), the conference is endorsed by Qatar University, the United Nations Environment Programme (UNEP), the Chartered Institution of Building Services Engineers (CIBSE), the Federation of European Heating and AirConditioning Associations (REHVA), the International Association of Plumbing and Mechanical Officials (IAPMO), and co-sponsored by the AHRI. According to the organisers, the technical programme consists of 13 conference paper sessions featuring 43 accepted conference papers, as well as three keynote presentations featuring invited speakers.

“The international support demonstrates the need for advancing the energy-efficient design of buildings and systems in hot climates,” Walid Chakroun, Conference Chair, said. “This conference brings together experts to look at the synergy between energy conservation and Indoor Air Quality in buildings, with the goal of achieving high energy conservation in hot climates. This February 2014

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intransit

withGREE

DONG MINGZHU

GROWING

Dong Mingzhu, President and Chairperson of the Board of Gree, is one of the 50 most powerful women in the world, listed by CNN Money, and is among the most influential business persons in China. Jerome Sanchez caught up with her when she recently visited Dubai, to talk to her about her meteoric rise, her business ethics and vision for Gree.

Tell us about your journey at Gree.

My success today is due to two factors: chance and effort.

I joined Gree from the inception of the company, in 1991. I worked as a sales representative, then gradually, I scaled the ranks to become the Vice General Manager, General Manager, Vice President and, now, I am the Chairperson of the Board. So, my experience is strongly tied to the development of Gree itself.

When I came to Zhuhai for the first time, I was impressed by the entire city. Actually, Gree is not my first job, but it will be my last job. When I first joined Gree, I never imagined being the Chairperson that I am today. I just focused on doing my best in my job.

I can still remember that in the first year of my becoming the General Manager of Gree, the sales of the company rose 28

Climate Control Middle East February 2014

seven-fold. After that, I was appointed the Vice President, responsible for marketing and advertisement. In 2001, I was appointed the President of the company. In two years’ time, in 2003, the sales volume of the company reached RMB 10 billion (USD1.6 billion). In 2012, the company achieved a global turnover of RMB 100 billion (USD 16.5 billion). Our target is to increase our annual turnover by RMB 20 billion (USD 3.3 billion) – that is, in five years’ time we can ‘make another Gree’.

What is your vision for Gree?

My vision is to see a bluer sky and a greener Earth.

Compared with other brands in the HVAC industry, Gree is considerably young, with only 23 years of history. But, we are developing very fast – we achieved in 23 years what others did in 100 years.

My vision for Gree is not merely to make money; my long-term vision is to use our technology to help human beings enjoy a comfortable and environmentally friendly life.

What is your leadership philosophy?

As a leader, you have to be the example for the entire team. If you want your team to achieve something, be the first one to do it. You have to establish the creation of a company culture, as the success of a company doesn’t only depend on the leader but also on the employees and the staff members. In my leadership, I look to establish a foundation for the company, based on which it can progress. In establishing the foundation, the leader should look at human resources, the company’s systems and training and education of employees.

What do you think are the drivers for growth of your company?

When one becomes a leader, happiness comes from contributing to the human race and to the world.

Other people may see my life as boring, but in my mind, I enjoy my life, I enjoy my work

success lies in the fact that we solely focus on air conditioning technology.

If you cannot get the full satisfaction of your customers in one business, you cannot expand to other businesses.

Ten years ago, when we aimed to set up operations in the Middle East market, regional customers doubted the quality of our products.

Through our continuous effort of proving the integrity of our products, customers came to know of our quality.

How is Gree able to achieve the quality that it speaks of?

Eighty per cent of the components that we use in our products are made by Gree. Other AC manufacturers in China typically take the

We focus on technological innovation and strive to continually meet the demands of the market.

What are the challenges for Gree?

The big challenge for Gree is we ourselves. We should not be satisfied with what we have achieved today. We have to continually strive to improve ourselves.

We also take it upon ourselves to tell the world that “Made in China” is not tantamount to [products] being cheap and of low quality. China-made products should also be known for their best quality. I cannot deny the fact that there are businesses that are manufacturing products of inferior quality, but they are just very few. Unfortunately, the bad image of China-made products, created by such companies, has affected Gree’s business.

Though not all of the customers worldwide understand the quality of our products, we will still hold our standards and stand by our principle of manufacturing good quality products. The key to our

technology from elsewhere, like Japan, the United States and Europe. We do it differently at Gree. We try to develop new technology for HVAC applications by ourselves. And we have around 5,000 engineers who work on our R&D. We keep on challenging ourselves to improve our quality. We challenge the certification companies to apply the strictest quality standards in inspecting our products.

It is common in China that inspection companies provide ‘some convenience’ to manufacturers with which they have a good relationship.

They tend to apply lenient standards in inspecting their products. So, when we challenged an inspection company to scrutinise our products with the most stringent standards, the top managers of the company got shocked. But then, we are that confident about our quality.

I believe that manufacturers should be accountable to the customers, dealers and endusers alike. If manufacturers allow inspection companies to breeze through the inspection process, it means that they are not responsible and are not willing to be accountable to their customers.

What is life outside of Gree like?

I do not have any hobby except promoting Gree. For other people, happiness comes from travelling or from rest and relaxation. But for me happiness comes from my job. Once my company becomes the world leader in the industry, I will be happy and proud. Being a leader of a big company, I do not have the luxury of relaxing or travelling for fun. When one becomes a leader, happiness comes from contributing to the human race and to the world. Other people may see my life as boring, but in my mind, I enjoy my life, I enjoy my work. February 2014

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29

interview JOHN BAINBRIDGE

TESTING TIMES

As the Middle East grows into a more evolved and a quality-conscious market, testing and certification of products and services to meet international standards and those specific to the unique regional demands become imperative. Jerome Sanchez speaks to John Bainbridge, General Manager, Al-Hoty Stanger Laboratories, about how the region has tried to measure up to these benchmarks.

How is the testing culture in the region?

The existing testing culture has developed in the UAE, spurred by the influx of qualified professionals, relative shortage of manufacturing industries, the requirement for imports to meet the demands of a burgeoning population and the vision of the country’s leaders. All these have supported the growing trading industry. These imports need to be monitored for quality and quantity and, therefore, the UAE government has laid stringent guidelines to control the same.

Secondly, the presence of multinationals, such as the Starwood group, Jumeirah group, Carrefour and Spinneys, bring their own culture/policies into this industry, which dictate that compliance monitoring be conducted for adherence to local and international 30

guidelines. These reasons obviously aid us in spreading the “testing” message across.

Could you share with us the perception of the market towards testing? How are they receiving it?

Earlier, companies treated

Climate Control Middle East February 2014

testing as an added expense, which was merely tolerated.

But with the inception of ISO 9000, 14000, 22000 and HACCP Systems, along with the company’s own legal and social obligations, today, they accept testing as an important facet of their operations, aiding them as they strive to

better the quality of services, products and workmanship they provide.

What is the value of testing for a company?

And what impact can testing have in their products and operations?

The values are manifold, especially with regards to reputation and costs saved.

This reminds me of the adage, ‘Penny wise, pound foolish’.

Take the recent example of major car manufacturers recalling a number of vehicles from the market due to quality issues. This translates into billions of dollars to the company, not to forget the dangers it poses to human life, as well as the loss of reputation.

When a client tests a product with an ISO 17025-accredited laboratory locally, the test certificate is valid in any part of the world governed by the ILAC/ISO regulations. In short, this puts us on par with international laboratories.

Does this region have unique testing conditions? Could you speak about those?

Yes, the heat, dust and the marine environment play a major role in the testing conditions, increasing operational costs, as we need

In recent times ESMA, ENAS and DAC have signed membership agreements with ILAC, which grants them access to all the latest developments within the testing industry to maintain our structures/ laboratories in a reliable testing condition.

Another aspect of the prevailing climate is that these conditions also are detrimental to products, such as food. Therefore, to ascertain the condition of the consignment, the client needs to test the same.

What is the extent of testing in Saudi Arabia? How is the Saudi Arabian market receiving testing processes?

Saudi Arabian Standards Organisation (SASO) and

the KSA ministries play a prominent role in laying standards for products.

Therefore, their regulations aid us in increasing our testing presence.

AHSL is a Saudi-based laboratory since 1978, and caters to a wide range of disciplines there. In 2013 we have opened a new laboratory in Batha (KSA-UAE border) to aid in testing the quality of products passing through for cross-border import or export.

What progress has the testing industry made in the region?

Organisations, such as the Emirates Authority for Standardization and Metrology (ESMA), Emirates National Accreditation System (ENAS), Dubai Accreditation Committee (DAC), Abu Dhabi Food Control Authority (ADFCA), Dubai Municipality (DM), Sharjah Municipality (SM) and Regulation and Supervision Bureau (RSB) monitor this environment, and have laid out regulations on par with developed countries. They collaborate with the World Food Programme (WFP), World Trade

Organisation (WTO) and International Laboratories Accreditation Commission (ILAC) to put these regulations in place, and are continuously improving them.

In recent times ESMA, ENAS and DAC have signed membership agreements with ILAC, which grants them access to all the latest developments within the testing industry. 

February 2014

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interview JAFAR SYED IMAM

‘VRFs will go viral’ The market for VRF systems will grow exponentially, considering the base itself is small, says Syed Jafar Imam, the Regional Director for AHI-Carrier, in an interaction with B Surendar…

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Climate Control Middle East February 2014

Has the VRF industry turned the corner in the GCC in terms of better acceptance?

VRF projects are being better defined today. Earlier, it was a makeshift approach, owing to financial limitations and projects getting shelved. I mean, people were saying, “If chillers are expensive, why not look at VRFs?” Now, projects are being planned with VRFs in mind. That’s why I said they are being better defined.

The process of selection for the Middle East is different.

We are now seeing the taste and flavour for designing VRF-based projects here.

That flair, seen elsewhere, is now here. We are seeing an amalgamation of client expectations and the flow of knowledge from Europe and, at the same time, making the technology suitable for the Middle East.

Aren’t consultants still a wary lot, though?

I accept that VRFs are still not on the minds of consultants. Generally speaking, consultants are asking questions on support.

Consultants also need to have a knowhow on how to select VRFs, and so suppliers have to support consultants.

Different brands are doing it but from their perspective.

VRF is still a strange animal for people here. Consultants are getting the hang of it now, though. They are more vocal about it, and we are witness to a trend of 300-villa projects and 500-villa projects specifically going for VRFs. I am optimistic the market will grow exponentially, because the base itself is small. The trend indicates that VRFs will go viral.

Earlier, clusters of apartments and villas used to opt for ducted splits; today, they are asking about VRFs. The virtues are certainly there. In packaged units, how much temperature can you

Everything that was in the slow burner will likely go for momentum owing to Expo 2020. But I cannot generalise, because it could also be a culmination of the government’s commitment for affordable housing control? With VRFs, you can control that aspect.

In 2013, about 2,400 outdoor units reportedly were sold in the UAE. Is that an accurate assessment?

And can we make any projections?

Numbers and projections could be skewed. I have had a recent instance of a project that was not even in my database. All of a sudden, they were saying, “We need to fast-track.” The project in question involves 500

villas. Assuming two to three outdoor units to a villa, and if we take the higher side, that is 1,500 outdoors for just one project.

So everything that was in the slow burner will likely go for momentum owing to Expo 2020. But I cannot generalise, because it could also be a culmination of the government’s commitment for affordable housing.

Refrigerants-wise, where are we heading? R410A seems to be a popular choice as an interim refrigerant, though some may disagree with the word, ‘interim’. And what about R32?

Let me begin by saying that for R22 it is just a matter of time. For example, JAFZA (the Jebel Ali Free Zone Authority, in Dubai) is saying, “Only R410A”. In my estimation, by 2015, R410A will have 50% of the share in the country. The change will not be immediate, though, because obviously, we are talking of a lot of equipment coming from Malaysia, Taiwan, etc., and they still use R22. So the question is, “Are we ready to transition immediately? Not yet, the change will be gradual. I see R410A taking on R22 in some ranges.

Now, as for VRF, it is

February 2014

driven by Japan. Any serious clients and consultants cannot keep Fujitsu, Toshiba or Daikin out of business, because VRF is an engineered product. In Japan, there is a tilt towards R32. At the end of the day, Japanese industry collaboration will go for R32.

That’s my opinion. It’s about solidarity.

But Daikin will have to open up. Things are still at an early stage now, but thoughts become ideas, and ideas become reality. The fact of the matter is that R32 cannot be discounted down the line.

The Japanese have a strong tradition of due diligence; theirs is a solid approach.

I feel that Daikin has managed to convince the forum in Japan. In my view, R32 will be here to stay for a long time, but ‘long time’ is relative. Long time could mean five years. Air conditioning is part of the global economy, and so changes at hurtling pace are part and parcel of the trade.

Finally, don’t forget, to use R410A itself, there is cost involved.

Apart from the UAE, what are the key growth areas for VRFs in the GCC?

The UAE is one of the biggest VRF markets in the GCC, followed by Saudi Arabia. But do remember that in Saudi Arabia, one project alone could swing it to a higher rank, such is the size of the country.

Another promising market is Oman. In our case, we have supplied 300 outdoor units – a total of 3,000 TR – to Phase 1 of a PDO project. We started in February 2013 and finished supplying everything by September 2013.

Oman has been very fast in accepting the VRF technology but, at the same time, has very stringent rules. In the case of PDO, they asked us to demonstrate our system as running for 24 hours at a stretch in 50°C!  www.climatecontrolme.com

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post-event highlights WFES 2014

Africa: 'The new frontier for renewable energy' At the opening ceremonies of the 2nd Annual Abu Dhabi Sustainability Week and 7th Annual World Future Energy Summit, African leaders were in attendance to discuss the potential of their continent’s sustainable energy future

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he 2nd Annual Abu Dhabi Sustainability Week and the 7th Annual World Future Energy Summit (WFES 2014) opened on January 20 at the Abu Dhabi National Exhibition Centre, UAE. The inauguration ceremonies of the event, whice ran till January 22, was attended by H.H. General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, global dignitaries, academics, industry experts and government officials.

Commenting against the backdrop of the opening ceremonies, General Sheikh Al Nahyan said that the UAE is committed to delivering new and traditional energy as a fundamental pillar to ensuring

global economic growth and security.

At the opening ceremonies, a distinguished panel of African leaders, comprising Ernest Bai Koroma, President of Sierra Leone; Hailemariam Desalegn, Prime Minister of Ethiopia and M Sall, President of Senegal, to name a few, discussed the enormous potential of their continent’s sustainable energy future.

Desalegn shared that his government was currently building a 8,500-megawatt capacity infrastructure by tapping into hydro, wind and geothermal sources, with international partners.

He added that Ethiopia had signed agreements to share its

Some seminars conducted at the WFES 2014

renewable energy wealth with neighbouring countries, just as Sierra Leone has entered a West African “power pool” and signed a solar energy pact with UAE. In the end, the African leaders affirmed that Africa is a continent that investors can be confident about. Sall said: “Africa of our generation is an Africa where democracy is on the rise, investment is protected, and where there is already a considerable

amount of energy production by the private sector.” Koroma concurred: “Africa has changed. Good governance is the order of the day. We have governments that are committed to transparency and accountability. Return on investment is on the increase. It will be the engine for economic growth, and renewable energy will continue the development process that we have started.”

coverstory EMPOWER

that d e c un s anno luding it 9 1 c in ary ict Janu Utilities, lm Distr n o one alm y, Pa ower Emp cquired P vice entit World, in rict ar ist da ser it ha cooling m Istithm s in the D the g ro on ict distr (PDC), f acquisiti propellin ity ac ly er ing Cool rgest ev reported n TR cap f ry, illio e la Oo of th ng indust e one m r, the CE dar on h a i Cool ny into t Bin Shaf B Suren ader a d o ith p com et. Ahma sation w nd on br es, a r k rc l c e bra in conv the dea esou nal r n a , ower ations of nce, hum operatio Emp c a e, amifi ed to fin er profil ns‌ r e h t t a m s rela usto th pl issue pacity, c nd grow ca ya spare efficienc

February 2014

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coverstory EMPOWER

(L-R) Foreground: H.E. Hamad Buamim, Board Member of Dubai World and H.E. Ahmad Bin Shafar, CEO, Empower.

Background: H.E. Saeed Mohammed Al Tayer, Board Member and CEO, DEWA, and Chairman of Empower; H.H. Sheikh Ahmed bin Saeed Al Maktoum, President, Dubai Civil Aviation Authority, Chairman of Dubai Airports, Chairman and CEO, Emirates Airline and Chairman of Dubai World and H.E. Mohammed Ibrahim Al Shaibani, Board Member of Dubai World and Director General of H.H. The Ruler’s Court

overheads and staffing.

As a business, we will be saving AED 45 million for Empower and PDC in 2014.

W

Could you take us through the behind-the-scenes activities leading to the acquisition announcement?

hat was the thought process behind the acquisition of Palm District Cooling?

Dubai does not need more than one District Cooling company, because District Cooling is about a unified way of building plant rooms. If we opened it up 36

for everybody, we won’t get significant savings. Now, with the volume of work, we will be able to receive special rates from contractors and suppliers. Also, if you look at it from a technical point of view, 10 engineers will give 10 different answers. They are not wrong, but we prefer to club all the activities. And the savings that add up will

Climate Control Middle East February 2014

help all the players.

The acquisition has a number of synergy points.

Empower has excelled at saving money in operating the plant rooms in the most efficient and cost-effective manner possible. Likewise, we have excelled at getting finance from banks in a costeffective manner. We have also done well to manage

We have done the acquisition based on heavy and intensive studies over the past one year.

Before any acquisition, there is financial, commercial and operational due diligence to

We have 46 plants at Empower, and PDC has 11. So as I see it, we will be adding only 11 to our existing profile discontinuity of service, no wrong billing. In 12 months’ time from now, it will be very efficient. I don’t have a magic wand to sort out the billingrelated problems. I would need at least six months for that.

What is the financial structure of the acquisition?

be done. If took us one year to take PDC. We have done the due diligence.

We have noticed the good progress in trade, hotel, real estate and other sectors. Also, the next eight years are going to be a busy schedule, owing to the World Expo 2020.

They definitely will go with District Cooling for the Expo.

In fact, we are in negotiations to serve the Expo site, near the new Dubai World Central - Al Maktoum International Airport. The Expo halls will be ready in 2018, and we will

go in, but not before 2016.

Also, don’t forget, the site will be used even after the Expo, so there will be continuous service.

So overall, Empower took the decision at the right time to take over PDC. I have always been enthusiastic about consolidation. As early as 2008, I spoke about consolidating the companies to pass the benefit to the end-users. Now that we have acquired PDC, people will see the benefits, such as no

The deal is around USD 500 million. It is fully financed through a syndicated loan with two local and two international banks. It is funded through debt, equity and internal accruals, owing to the strong financial position and credibility that Empower enjoys. The banks’ faith in us is based on our strong track record, technically, operationally and financially.

Speaking of which, what is the value of the overall loans Empower has taken?

We have USD 750 million in loans, of which USD 600 million is from Citibank, Standard Chartered Bank, Mashreq Bank and Emirates

February 2014

NBD. We have an additional loan of USD 150 million from Doha Bank. Empower will have a debt repayment obligation of about AED 400 million a year.

Once the final formalities of the acquisition are complete, will Palm Utilities and Palm District Cooling eventually come under the Empower brand name?

The merger and acquisition will take us at least two years, but we are trying to expedite the process. The two-entity flagship will be carried over the next two years, because merging them will pose a challenge to contractors, suppliers, etc.

We will run in parallel, and the acquisition will be done.

The two entities are being taken in as subsidiaries of Empower. All their business operations will be run by Empower. We will eventually dissolve the two names in two years’ time.

Palm Utilities and Palm District Cooling are maturing entities.

The market-speak is that they are struggling entities.

How will you be ringing in operational efficiencies and plugging other aspects?

A lot of business practices for Palm Utilities and PDC are outsourced, while in our case, we have our own team, whom we have trained to raise their level of performance. We have 46 plants at Empower, and PDC has 11. So as I see it, we will be adding only 11 to our existing profile. We are confident we can operate the 11 as well as we operate the 46. We have the system and the knowhow. You don’t need two operating teams. A central command team will run both. www.climatecontrolme.com

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coverstory EMPOWER

Shafar-speak Shafar Not all consumers are nice. They put magnets on the meters. So I would much rather have a single meter, but I would be happy to share the readings with them.

Anything we invest in, we are very robust. We did not structure a penny during the downturn.

Our approach is in phases. We are always in touch with our customers and know when growth will happen.

One million TR: I love the number!

We are no more six digits.

We are seven digits!

Do you have redundancies as a cost-savings strategy? Have you begun making cuts?

By combining, there definitely will be some redundancies. We have to look at how we can give benefit to our shareholders, so there will be redundancies. If we keep the same number, there will be no synergy to business operations. In fact, redundancies have already started since November.

highly diversified, and so we absolutely don’t have any spare capacity.

And now with the acquisition, how much of spare capacity do you have?

PDC has a spare capacity of about 30%, and all of this is in the Crescent, in Palm Jumierah. In the Crescent, out of the installed capacity

of 120,000 TR, about 65,000 TR are in operation. And about 40,000 TR will be absorbed this year by four hotel projects coming there.

So that will leave us with approximately 15,000 TR in spare capacity.

As for other PDC plants, Discovery Gardens is running to full capacity, as are Jumeirah Lake Towers and the Trunk in Palm Jumeirah.

You have taken the liability of loans of two companies? How will that impact the acquisition?

Coming back to the Crescent, with the about 40,000 TR that will go operational this year, we will just be connecting. We are not going to be investing anything. So, we will be getting returns without any investment.

By the end of 2015, most of the spare capacity will be drastically reduced.

When you speak of the liability of loans, there are two parts – equity and debt. We have assumed the liability of PDC, which was USD 212 million, and that has been fully settled. We are now starting with a clean slate.

As Empower, how much of spare capacity do you have?

At Empower, we have zero spare capacity. We are 38

In 2014,we estimate a combined (including PDC) turnover of AED 1.5 billion and the profit to be AED 400 million

Ahmad Bin Shafar collects the first IDEA Innovation Award for the company's use of Treated Sewage Effluent technology for District Cooling

Climate Control Middle East February 2014

The hospitality industry is a substantial portion of your customer base. Are we going to

see a change in the customer profile?

Dubai hotels have wholeyear occupancy, and they are part of our core revenue as customers. The hospitality industry is about 20% of our customer base, I would say. Now, that’s about 20% of the 715 buildings that are receiving our services, including those of PDC. Empower has a diversified customer base of banks, hospitals, hotels, financial centres and shopping malls.

We are serving diversity.

And we are individually monitoring different customer clusters. For instance, we are monitoring shopping malls in a bid to raise efficiencies.

Our customer base will increase. Business Bay is still not fully developed.

There is a strong likelihood of a 20-30% increase in occupancy in Business Bay.

Would you look to include more industries to your customer base? For instance, DUBAL is going for a huge captive power plant and could offer a stable revenue model.

In comparison, some sectors probably have a saw-tooth demand of seasonal highs and troughs? And would you be considering DEWA? If your father is a contractor and if you are building a house, would you go to another contractor? The answer is ‘no’, correct? I will be working with DEWA. Broadly speaking, I am open to industries as customers.

Absolutely! If DEWA wants the service, we will offer it. Currently, in IMPZ, we are providing chilled water to the industry sector in the nature of factories. We do not follow an approach of restricting ourselves to hospitals or the residential sector, say. Wherever there is

money, whoever is paying money, we will go.

What is your financial performance looking like? What can we hope to hear from you in February?

(Readers, please note: This interview was conducted on January 28) On the 15th of February, we will announce our figures. I cannot reveal much, but it will be double-

the Subcontinent or, closer to home, in other GCC entities?

After the acquisition of Palm Utilities and PDC, we have 57 plant rooms and a total of 45,000 customers. We have AED 8.5 billion in total assets and AED 3 billion in debts. If you were to bring an external auditor, our assets value may be in double digits, so what I have said is a conservative figure. Today, we have almost one million TR of District Cooling. These

you will see five to six plants coming up.

The point of my saying all this is that we are content with being in Dubai, which to me, is the hub of transport, finance and health. I firmly believe that Dubai is going to be the star of the entire continent for the next 15 years. I am proud I am operating out of Dubai.

During the Arab Spring, a large number of businesses moved to Dubai. There are plenty of opportunities here

are all massive numbers. To put things in perspective, USA, Canada and Mexico combined have 700,000 TR of District Cooling. And they have been doing District Cooling for several decades.

The International District Energy Association (IDEA), for instance, is over 100 years old. What we have achieved in 10 years is remarkable.

And there are new projects coming up, which we shall soon be announcing. In the next two to three years alone,

for contractors and other stakeholders to build, improve and supply spare parts, etc.

I like the way Dubai operates. Decision-making abroad is slow compared to Dubai. Here, we received a mandate from the Government, and so we went ahead. Saudi Arabia is not in my radar. Our strength is Dubai.

To give you a specific example, we recently got instructions that they need a large District Cooling plant

New Empower Plant at Business Bay

digit growth. The numbers will be much better than last year. And to give you an idea of our performance in 2014, we estimate a combined (including PDC) turnover of AED 1.5 billion and the profit to be AED 400 million.

As a business, are you looking to expand beyond Dubai’s shores? For instance, would you explore possibilities in North America,

February 2014

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coverstory EMPOWER

in Jadaf. I am talking big numbers here, about 150,000 TR. Also, there is something happening in the airport area.

Once Jadaf is a reality, I would want to connect Healthcare City with Jadaf and Business Bay. That way, if there is a shutdown anywhere, it will be one network, and there will be no disruption of services. And such a network will be one of the largest in the Middle East.

You said you like the way Dubai operates.

Many in the District Cooling industry have been waiting for better power tariffs for a long time now. Is there anything on the anvil? What is DEWA saying?

Why all this talk about reducing the tariff? We don’t want to subsidise the rate. Let District Cooling providers run their plants in an efficient manner instead of complaining that there are no subsidies. We should be thankful to the Government that there is no taxation. We should be very robust in our approach, accept the tariff as such and focus on the full picture. We should aim for energy efficiency through R&D.

What is the ambition of Ahmad Bin Shafar?

I dream to have one big District Cooling company in Dubai. We need to be like Etisalat. We need to be one among the Top 10 brands. I would like to see us as a blue chip company.

You are a member of the Board at IDEA. What does that mean to the region, to Dubai?

As a Board Member, I would like to spread knowledge and transfer technology from North America to the MENA region and to India, etc. At this point in time, the challenge is to make 40

Let District Cooling providers run their plants in an efficient manner instead of complaining that there are no subsidies

people travel from here to North America, so we need to bring a team from the United States to Dubai. We will build an association for District Cooling, and it will be part of IDEA. It will be operated from there. We want to bring them here to lecture to people in Dubai. To be effective, we would like to bring all the District Cooling companies here to the table and to jointly examine the challenges and issues we face as an industry.

You sponsored the ASHRAE District Cooling Design Manual. Is there any

Climate Control Middle East February 2014

action towards a second edition?

like Rolex and always offer reliable service.

We follow a strategy of preventive maintenance and regular maintenance. It is our aim to stretch the life of our plant rooms to 50 years.

We pay attention to all components and equipment, from strainers to filters and from cooling towers to chillers.

It is important to keep them in good condition, because

The equipment in your oldest plant is, what, eight years old. So, what are your service plans? For instance, for every 40,000 hours of operation, a chiller has to go for service, yes? What is your overall maintenance strategy?

they are linked to energy efficiency. Most of our plant rooms operate at 0.95kW/ TR. Even in the case of air cooled, we achieve efficiencies of 1.3 to 1.4.

We do regular maintenance in winter.

In Healthcare City, if 20 chillers, we run two and shut down 18. The diversity of winter and summer allows us a proper maintenance schedule. Our maintenance team is very busy from October to May – so much so that they can’t go on leave in this period.

We prepare for summer by identifying and rectifying in winter.

We respect ASHRAE a lot.

We are working on Phase 2 of the Design Guide. It is my aim to bring the two competitors to one table. It would be ideal to bring IDEA and ASHRAE together to do the design manual.

I will be travelling to the United States in February and hope to bring this topic up.

For the last 10 years, have you heard of any customer complaints on service?

You wouldn’t have. And that’s because we believe in preventive maintenance.

We are always preventing any hits. We need to be

countryreport SAUDI ARABIA

The Kingdom's quest for

sustainability In its endeavour to avert a potentially precarious energy crisis if the current spike in domestic consumption persists, the Kingdom of Saudi Arabia has embarked on a slew of projects and initiatives to encourage energy efficiency and diversification of its energy sources. Jerome Sanchez has the report.

T

he Kingdom of Saudi Arabia has been experiencing rapid economic and population growth in recent years, which is seen to be causing a notable rise in the country’s domestic energy demand. Since 2000, the energy consumption per capita in the country has increased by more than 30%, and in 2008 alone, the total primary energy consumption in the Kingdom reached approximately 800 million barrels of oil-equivalent, of which 60% was oil.1 According to the Saudi Ministry of Water and Electricity, the rise in primary energy consumption is expected to double in 2030.

Studies show that, at present, the country’s demand for its

Saudi Arabia’s domestic energy demand could potentially limit its oil export within a decade 42

own oil and gas is growing at around seven per cent per year, and that based on the current consumption pattern, Saudi Arabia’s domestic energy demand could potentially limit its oil export within a decade.

This is expected to have an unconstructive effect on the country’s government spending, over 80% of which is dependent on oil revenues.2 The looming unstable situation of the country’s oil supply may also have global ramifications, with the world economy still largely oildependent.

The alarming state of the country’s domestic energy consumption has attracted the attention of the Saudi

Climate Control Middle East February 2013

Government, which has now identified energy efficiency, among others, as a crucial national priority. As a result, in an attempt to diversify the economy away from fossil fuels, there is now a nationwide effort to research on and develop renewable energy technologies and energyefficient products.

The spike in power demand

Saudi Arabia’s annual power consumption is observed to grow at double the rate of the growth of its gross domestic product.2 With the Kingdom’s high population growth, projected industrial development and prevailing domestic consumption pattern,

the increase in energy demand is expected to remain high.

Although electricity generation capacity has doubled in the last decade to around 50,000 MW, the country still struggles to keep up with the demand in summer, which rises by as much as 50%.2 HVAC equipment is said to be a crucial factor in this peak, accounting for an estimated 50% to 70% of the country’s total energy consumption during the summer months.

If the supply of electricity cannot quench the country’s demand during the most crucial months, some regions in the country can potentially suffer from power outages.

Not having adequate

countryreport SAUDI ARABIA

electricity to power HVAC systems during the hottest period may result in serious health risks to the Kingdom’s residents.

In light of this, and in the face of the fact that HVAC systems account for a major share in electricity consumption in the country, the government may introduce the use of energyefficient and environmentally friendly cooling solutions, such as District Cooling (DC) systems and variable refrigerant flow (VRF) systems, to name two.

Case 1: District cooling: On tailwinds and headwinds

The notable increase in construction activities in Saudi Arabia brought about

its emergence as one of the most profitable construction markets in the Middle East, with projects said to be worth hundreds of billions of dollars under way. The presence of large construction projects in the country, compounded with an expanding population, has created inroads for DC applications.

DC-related revenues in the Kingdom are expected to increase from USD 400 million in 2012 (with a capacity of 1.3 million tonnes of refrigeration (TR)) to about USD 870 million in 2016 (with a capacity of 2.1 million TR), at a compound annual growth rate of about 21%. It is expected that Saudi Arabia will account for about 35% of the overall DC revenues in the GCC by 2016.3 Despite this, DC continues

DC-related revenues in the Kingdom are expected to increase from USD 400 million in 2012 to about USD 870 million in 2016, at a compound annual growth rate of about 21% to face headwinds in the Kingdom, among which are financing and lack of fresh water supply.  The fact that district cooling requires a considerable initial investment represents a major challenge to smalland medium-scale DC service providers. As a possible solution, many developers and service providers are now tapping the alternative option of Public-Private Partnerships (PPP) and Build-OwnOperate-Transfer (BOOT) model.3  Another hurdle to further growth of DC

44

Climate Control Middle East February 2014

in the Kingdom is the non-availability of abundant fresh water.

With the advancement of technology, however, treated sewage water or seawater is now being used in pilot projects for DC applications. But, this could possibly lead to an increase in the price of DC services, as treating seawater would incur additional costs for service providers.3

Case 2: ‘VRFs are catching up’

VRF is popularly regarded as an efficient, economical and environmentally friendly technology, and has been touted by various industry players as the answer to the region’s growing concern about energy costs, system efficiency and sustainability.

Dr Anwar Hassan, Vice President for Sales and Field Operations, Johnson Controls in Saudi Arabia, shares his observation on the growth of the VRF sector in the Kingdom: “Small commercial and residential projects are moving towards the VRF technology to save energy and satisfy the energy regulation requirements,” he says. Although “traditional” customers are observed to be slow in adopting VRF systems, Dr Hassan believes that the professional consulting community is embracing and supporting the technology. “The year-on-

countryreport SAUDI ARABIA

year growth is not less than 15% for VRF systems,” he observes.

BSRIA supports Dr Hassan’s observation on the growth of the VRF technology in the Kingdom, when it reveals, in a November 2013 report, that the volume of the market for VRF in 2013 was expected to be 1,470, from 1,150 in 2012 and 975 in 2011. Proportionately, the value of the VRF market is also increasing, from SAR 68 million (USD 18 million) in 2011, to SAR 75.8 million (USD 20.2 million) in 2012, to an expected SAR 98.9 million (USD 26.4 million) in 2013.4 Dr Hassan regards the new

the consequences of the current domestic energy pattern need to be ideally understood in the context of the country’s vision for development energy efficiency regulation for unitary products of up to 70,000 Btu/hr as a crucial driver for the growth of the VRF technology, and energy-efficient technologies in general, in the Kingdom.

“The regulations are being implemented in tandem with SASO, in a phased manner, to help the HVAC industry.

ASHRAE 90.1, minimum energy efficiency standards 46

Dr Anwar Hassan

Afif K

could also bear a torch light for Saudi Arabia,” he says.

Afif K, an International Sales Consultant from AFKA Inc supports Hassan’s opinion and adds that the growth of the VRF system in Saudi can be influenced by contractors and builders, as they participate in the design of construction projects and decide on which technology they would like to promote. In his opinion, suppliers, like his company, should “go the extra mile” to comply with and even exceed strict regulatory requirements if they want to remain reputable.

of energy demand, which research shows may be unsustainable, would not only waste resources and cause pollution, but may also result in potential economic and social crises.

The Kingdom’s solution to its present energy situation may be manifold. However, market analysts say that they may not be easy to implement.

For instance, raising the price of energy is seen as the most obvious means of controlling consumption2.

But the risk of not having public support and of being met with strong opposition may be discouraging for the government.

In an initiative, the Kingdom has started to shift its focus on exploring new sources of energy.

In 2013, Saudi Arabia launched a renewable energy programme that could see the procurement of 54,000 MW of renewable energy capacity over the next 20 years. The country is keen on generating a third of its electricity from renewable energy by 2030, and a major part of its renewable energy target is expected to be reached through solar projects.5 In addition, in the absence of price reforms, market analysts say that it is possible for the government to launch large-scale home

The roadmap ahead

Though the increase in energy demand in the Kingdom is attributable to its increasing population and improving standard of living, the alarming rate of energy consumption in the country may also be largely due to inefficient energy usage.

According to various market projections, if Saudi Arabia’s domestic energy consumption pattern persists, it could jeopardise the country’s ability to export oil to global markets, thus affecting its economy and the government’s capacity to provide domestic services. Since the Kingdom’s economy is still largely dependent on revenues from oil exports, current patterns

Climate Control Middle East February 2014

wheatherisation programmes and installation of energyefficient air conditioning units2, in light of the fact that HVAC systems account for the lion’s share of the power demand, particularly in the summer months. This effort can be supported by the introduction of building efficiency standards and mandated appliance standards to further stem the rise in power consumption in the country.

Conclusion

There are enough compelling reasons for the Kingdom to urgently act on curbing its domestic energy consumption.

As public support is seen as a necessary factor to drive energy reforms, the consequences of the current domestic energy pattern need to be ideally understood in the context of the country’s vision for development. The government may have to engage the citizens to make them aware of the issues and of the reasons why immediate action is necessary, for their benefit and for the good of the future generation of Saudis.

References: 1. Alyousef Y, and M Abu-ebid.

“Energy Efficiency Initiatives for Saudi Arabia on Supply and Demand Sides.” Energy Research Institute, King Abdulaziz City for Science and Technology, Riyadh.

2. Lahn, Glada and Paul Stevens.

“Burning Oil to Keep Cool: The Hidden Energy Crisis in Saudi Arabia.” Chatham House, December 2011.

3. Ramesh, Kumar. “District Cooling: A market poised for strong growth in the Kingdom of Saudi Arabia”. Frost & Sullivan.

4. “Room and packaged air conditioning: Saudi Arabia.”

BSRIA, November 2013.

5. Sanchez, Jerome. “The sun rises in the Kingdom.” Climate Control Middle East, March 2013.

52-53. Print.

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