The built environment contributes to over 40% of global energy demand within which demand for thermal comfort ranges from 40-60% of a building’s energy demand. In India, the real estate sector has emerged as an attractive investment magnet, bringing in a sizeable percentage of the country’s FDI inflows with the sector likely to contribute to 13% of the country’s GDP by 2025.
By extension, real estate contributes to a large percentage of greenhouse gas emissions with a recent World Economic Forum study highlighting this to be at 22% for India. Whilst there are several ongoing decarbonization initiatives both from regulation and from market participant action, this can be further accelerated by integrating business model innovation and energy-efficient technologies through solutions like district cooling delivered through cooling as a service (CAAS) model to meet the country’s growing cooling demand.
District Cooling through CaaS: Net Zero made attainable
District Cooling Systems (DCS) facilitate supply of chilled water produced in a central plant to buildings through a network of insulated pipes. DCS is 20 to 50% more energy efficient than conventional AC systems as it enables scale benefits from demand aggregation of a variety of load profiles. Further, unlike standalone AC systems which utilize large amounts of refrigerants with high global warming or ozone depleting potential (GWP, ODP), DCS minimize usage and prevent leakages while leveraging natural sources of water such as lakes, rivers, and seawater for heat rejection. By enabling integration with alternative technologies like thermal energy storage for peak energy demand shaving, captive solar plants for reduced power costs, waste heat capture from waste to energy plants for free cooling, treated sewage effluent (TSE) for lowering the demand for potable water, etc., DCS can also support the circular economy, boosting its climate positivity quotient further.
Already popular across developed markets of Europe, US and Middle East and increasingly across Asia, district cooling is being implemented through a variety of business models whether under long term fully funded concessions, public utility models or through design build and operate (DBO) solutions. Under fully funded concessions (cooling as a service), a provider own the cooling system as well as bear all running and utility costs, while customers or end users pay per unit of cooling they use in each billing cycle. In that sense, CaaS is customer-centric and flexible – it lowers customer’s initial investment in cooling systems and takes away the hassle of operations and maintenance, while tying up incentives of cooling providers closely to customers in terms of asset longevity through efficient and reliable operations. It is estimated that CaaS can help save up to 25% of cooling costs for customers, while reducing emissions from electricity use and coolant leakage by up to 50%.
Elpro Business Park & Elpro City Square, a mixed-use development in Pune, India, implemented a CaaS model to provide cooling wherein user only pay for the cooling service they receive, while operation, maintenance and repairs are provided by the cooling provider. The AI-powered chiller plant runs on 100% solar energy and is a perfect example of how CaaS enables intersection with other green technologies, hence, accelerating sustainable growth.
Way Forward
With over 50% of India’s 2030 building stock yet to be built, the country has immense potential to invest and integrate sustainable technologies at urban planning stage itself, thereby optimizing energy use and reducing emissions. District cooling can help provide more cost-efficient, low-carbon pathways for not just buildings but entire cities to meet their energy needs while accelerating the transition to green buildings and net zero carbon buildings. For existing buildings, too, sustainability-oriented retrofits and renovations can be undertaken - while repurposing existing buildings may be operationally and economically challenging in the short term, sustainability driven solutions like district cooling pay for themselves in the long term while attaining environmental targets that would otherwise be impossible. For investors, this would translate into green buildings being better performing assets with a competitive advantage over the long term.
An International Finance Corporation report highlights that 46% people in India are willing to pay a premium to lease space in a certified green building. In this respect, it is essential for various players across the value chain including government bodies, civic authorities, and investors to synchronize efforts to accelerate adoption of DCS in order to decarbonize the built environment. Focusing investments on these sustainable technologies will yield rich ecological and economic dividends for all stakeholders.
