Should French companies be interested in tapping the HVAC&R industry in the Middle East, they had better start participating in various exhibitions held in the Gulf. These firms must present their latest products and services to concerned consultants, contractors and clients in the Gulf, wherein rapidly growing economies offer tremendous potential for foreign companies interested in setting up shop in the region or striking partnerships with their domestic and regional counterparts.

The HVAC&R industry in France doesn’t hold much influence over the markets across the Gulf Arab states, which are familiar with the US and British standards with regard to equipment and components related to heating, ventilation, air conditioning and refrigeration. French companies must also work to market to the region industry standards sanctioned by the European Union, in order to facilitate the importation of their products into the region.

“To improve their influence they shall present their products and the advancement they have contributed to this industry,” says Rami Al Khalil, the Abu Dhabi-based sales manager of Morex, a full-service representative company for HVAC, firefighting products and industrial equipment. But he notes that these products are most likely not rated or manufactured according to specifications imposed by the hot climes in the Gulf and the wider Middle East region. He remarks, “This will create difficulty in selecting equipment complying with the required design and weather conditions.”

He and Frank van Leemput, the area sales manager of Baltimore Aircoil Gulf, say HVAC&R companies and professionals in the region and their counterparts in France may also explore chances for technology transfer through industrial bodies. Al Khalil remarks, “Technology transfer shall be between French manufacturers and formal industrial bodies and all the parties involved in the HVAC&R industry ….”

There are not a noticeable number of French companies involved in the Gulf’s HVAC&R industry, van Leemput says. But inasmuch as any region outside Europe now has a bigger potential for HVAC&R business, it would be in the best interests of companies in France and other parts of Europe to explore the Gulf market, particularly Saudi Arabia, the UAE, Qatar and Kuwait.

“These countries are the strongest in economy in the Gulf area, besides the various development projects they have planned in the coming 20 years,” Al Khalil says. The Gulf countries and the whole Middle East will be needing millions of tonnes of refrigeration for their district cooling systems for many years.

French companies, for instance, may use their expertise on anti-LD (legionnaires’ disease) in the manufacture and installation of cooling towers, the heat-removal devices that send process-heat waste into the atmosphere. The common applications of these devices include cooling the circulating water used in oil refineries, chemical plants, power stations and building-cooling systems.

“Due to the heavy anti-LD legislation in France, French companies are assumed to have gained excellent expertise in this area,” says Dubai-based van Leemput, whose US-headquartered company manufactures heat transfer and ice thermal storage products. LD is a potentially fatal form of pneumonia brought about by human inhalation of bacteria in aerosols or water droplets. France adheres to a code of practice, called L8, to control the spread of LD. This code covers the manufacture and installation of cooling towers and other related equipment and components.

Major French companies engaged in power and energy are also flexing their resources to gain a larger market share and a better foothold in the international market. Consider the public megaconglomerate, Areva, for instance, which recently acquired the solar thermal startup Ausria, for an unknown amount. Ausria’s solar technology stores part of the heat generated by the sun during the day, so that this can keep producing electricity even when the sun doesn’t shine.

“I see this as a good sign for the capitalintensive solar thermal market,” says Michael Graham Richard, a writer based in Ottawa, in February. “Projections have it growing at around 20% per year for the next decade, but depending on a few things (price of oil, carbon taxes, major climate events and new scientific discoveries), solar could potentially expand even faster than that (or slower, if we’re unlucky).”

Affected by the economic downturn, the solar thermal market expects a smaller growth rate in the next few years. But since the world is leaning towards renewable energies, the market for solar thermal continues to grow, according to BSRIA, a UK-based construction and building services consultancy. The normally favoured distribution channel in the European market is through installers and plumbers, except for the UK, Greece, Germany and France, where it is done through wholesalers.

France is also home to a number of trade shows in heating and airconditioning – in which firms and professionals in the Gulf could participate and visit, in order the learn more what that European country could offer to the region’s HVAC&R industry. Take, for instance, the Interclima + Elec Home & Building and the Enéo events. A biennial international exhibition in Paris, Interclima is dedicated to heating, refrigeration, air-conditioning and sanitary wares, while Enéo focuses on energy, climate control and water management.

Delegates at The Climate Control Conference (C3) in Riyadh heard with relief that some of the key players in Saudi Arabia are doing district cooling right, be it in terms of water, power or financing. They also listened to the possibility of diverting cooling loads from residential to power plants and other industrial applications. Further, they responded to insights on refrigeration and ventilation.

The three-day conference, from March 14 to 16, was quite comprehensive in nature, including as it did almost all aspects of HVACR. It was a first for the Kingdom and, in that context, well received.

Day 1 focused on district cooling, with two clearly divided sessions. The morning session focused on the opportunities and challenges for district cooling in the Kingdom, whereas the afternoon session largely focused on what the rest of the GCC has to offer in terms of experience, expertise and refrain, borne out of over a decade of doing district cooling.

A standout feature of the morning session was that delegates got a localised flavour of Riyadh. The city’s King Saud University was a major point of focus in the 1970s when it established a central cooling plant. Using centrifugal chillers, it was able to achieve 1kW/TR, which was lauded as a technological advance and as something quite energy efficient. Equally significant, it used TSE, though it started off with using freshwater. Nevertheless, over the years, it has toted up the longest operating experience with TSE, something that its installers, the US Corps of Engineers, can be quite proud of. People at the conference listened with interest as Dr Zeyad A Al Suhaibani, Assistant Professor (Engineering Department) at the university took them through the profile of the district cooling regimen. They were particularly interested in hearing about the successful and sustained use of TSE from the 1970s, considering that the UAE has been using the source of water only from 2004 onwards.

While Saudi Arabia has had experience with central cooling plants for a long time, it is only in the recent past that it has adopted district cooling as a business model. The credit for being a pioneer goes to Saudi Tabreed, whose CEO, Abdul Hamid Al Mansour, shared his views on the initial days of doing district cooling. In his presentation, Al Mansour spoke of the tremendous challenges the company had to overcome, including the slab rate and also the cost of land for the plant rooms. He cited as examples the plant rooms in Jeddah and Madinah, where the plots of land cost the company SR100 million. His presentation brought home the message that the Government needs to support district cooling companies for the model to be financially viable.

Hisham Hajaj of Stanley Consultants was another key speaker. In his presentation, he highlighted the importance of the availability of water for district cooling to be successful in the Kingdom. Stanley Consultants is involved in the Pension and Retirement Fund projects in the country, in the forms of two plant rooms in King Abdullah Financial District (KAFD) (capacity 100,000 TR) and the Information Technology and Communication Complex (ITCC) (30,000 TR). Hajaj spoke of how the decision makers at the Retirement Fund eventually gave the go-ahead to the project, after they were assured that the plants would use only TSE, following a signing of a contract with the National Water Company (NWC), and not freshwater. His presentation was an eye-opener to delegates that largely speaking, developers in Saudi Arabia will pursue district cooling only if a sustainable water source is available.

In a subsequent panel discussion, titled ‘The challenges and opportunities for district cooling utilities in Saudi Arabia’, Nasser H Al Aamry of NWC elaborated on TSE. In fact, Al Aamry brought a fresh air to the proceedings by saying that NWC is committed to bringing TSE to district cooling regimens in six cities, to start with, in the Kingdom and, later, to 15 cities. The six cities are Makkah, Madinah, Jeddah, Riyadh, Dammam and Al Khobar.

Later, while making a presentation, Al Aamry went on to say that NWC had started with a SR 20 billion capital and that the company is looking to bring in several external investors in other cities, with NWC as the main shareholder. The intention, he said, is to bring foreign investors to handle privatisation of water and wastewater, in terms of collection and distribution. NWC, Al Aamry added, is willing to invest $20 billion over the next 10 years to boost the water infrastructure. This news was received with abundant relief by the district cooling industry. Battered as it is by the financial downturn and the rather sharp decline in the number of projects in Dubai, till recently regarded as the epicentre of district cooling in the region, Al Aamry’s words gave plenty of optimism to the delegates.

NWC will be supporting KAFD with 22,000 m3/ day of TSE and ITCC with 5,500 m3/day. Further, it has earmarked 10,000 m3/day for Ma’aden and 700,000- 800,000 m3/day for Riyadh alone, with irrigation schemes and industries as the beneficiaries.

Al Aamry’s co-panellist in the discussion on challenges and opportunities for district cooling in Saudi Arabia was Salah Abdulaziz Al Afaliq of National Trigeneration CHP, who has championed the trigeneration concept in industrial cities in the Kingdom. During the discussion, Al Afaliq spoke on how he is generating power, steam and chilled water for a select set of industries, including plastics and food processing. Another panellist was Abdullah Mohammad Al Jardan of City Cool Saudi Arabia, who spoke at length on the experience and difficulty in King Abdullah Economic City, where Emaar, he said, could not commit to an off-take in district cooling.

In a second panel discussion on the Saudi perspective, titled ‘Construction challenges and materials and supplies’, Albert Haykal of Trane spoke on the big advantages of water-cooled chillers in Riyadh, where due to dry conditions, the cooling tower would supply 80ºF water compared to 93-95ºF in the UAE. This, Haykal said, means an ability to select chillers at 0.56kW/TR compared to 0.7kW/TR in the UAE. Considering the fact that Riyadh is the driest, Haykal said, a water-cooled system is advantageous, and the gap (the demand for water) is filled by TSE, offered by NWC. His co-panellist, Mohamed R Zackariah of Protecooling (Suhaimi Design) concurred on the benefits of the watercooled system in Riyadh.

Haykal’s another co-panellist, Mohammad Abusaa of ADC Energy Systems spoke of the difficulties for contractors when he said that the Saudi labour law makes it difficult to get labour on time. “After signing a contract, it takes three to six months to get labour visas,” Abusaa said. Construction costs and materials are slightly high compared to the UAE, but the cost of living is low, Abusaa added. His co-panellists, Robert Geday of SNC Lavalin and Abdullah Zeneeh of Rio Electromechanical concurred with him.

In the afternoon session, George Berbari of DC Pro Engineering started off the GCC perspective on district cooling when he spoke on lessons learned from executing projects in the UAE. In his presentation, he focused on the phenomenon of over-building in the UAE. “One million was installed, and less than 500,000 was utilised,” Berbari said, adding that people simply did not manage their companies properly to match their financial projections. The news of Tabreed posting a huge loss was a bold move to acknowledge past mistakes, Berbari said.

After Berbari, Geday of SNC Lavalin elaborated on the extensive experience of the company, evidenced by the facts that it has installed over 680,000 TR (35 district cooling plants) all over the UAE. And Antoine Stephan of Hamon CTC described how the company has been cooling well water in Riyadh for over 30 years. In the course of his presentation, Stephan explained how the cooling tower capacity is derated at low wet bulb temperature. In other words, Stephan said, in Riyadh, there is a need to design for a larger approach, for example 10ºF or higher, compared to 6ºF, to compensate for derating of cooling towers.

The afternoon perspectives culminated in a panel discussion during which the finance side of district cooling came into focus. Mansoor Durrani of National Commercial Bank, Saudi Arabia; Khalil Issa of Energy Central, Bahrain; Mohammad Abusaa and Jardan were the panelists. Durrani revealed how banks were still interested in financing district cooling projects, provided there is strong offtake agreement with reputable end-users or developers, such as governmental or semigovernmental entities. Issa picked up the cue when he said that district cooling providers are still interested in investing cover story in projects, but they need to do a higher level of due diligence. “Provided there is strong offtake, they are willing to consider these projects,” Issa said.

District cooling companies will avoid investing in piping, Issa added. The developer ought to do that against a transmission fee, Jardan said. Abusaa gave the contractor perspective. He said that in the new paradigm, brought about by the downturn, contractors are being selective as to whom they would work with. Simply put, Abusaa said, contractors are looking at clients with a solid financial background.

Snapshots from the Event