District Cooling Market by Production Technique (Free Cooling, Absorption Cooling, Electric chillers), Application (Commercial, Residential, and Industrial) Region and forecast till 2027.
District Cooling Market
The global district cooling market is expected to reach USD 1177 million by 2026, up from USD 931 million in 2021, at a CAGR of 3.4 percent over the forecast period. The factors driving district cooling growth are the increasing need for efficient cooling in hot climate regions and growing investments in infrastructure projects in developing economies. The cooling equivalent of district heating is district cooling. District cooling, which works on similar principles to district heating, delivers chilled water to buildings such as offices and factories that require cooling.
Drivers: In hot climate regions, there is an urgent need for efficient cooling.
The population living in tropical and hot climate regions requires cooling to be more comfortable, particularly during the summer. According to the International Energy Agency (IEA), ownership of air conditioners is increasing in these areas. The Middle East is one of the most advanced markets for district cooling. Summer temperatures in the Middle East have risen to more than 50 degrees Celsius. Cooling is one of the most pressing issues confronting the countries in this region. According to the Dubai Electricity and Water Authority, between noon and 5 p.m. in the summer, there is a 40% increase in demand for electricity, primarily for cooling.
Restraints: High initial investment and a lengthy payback period
District cooling is capital-intensive, and district cooling plants are time-consuming, necessitating extensive planning. The distribution network's installation is also costly. District cooling necessitates a large-scale centralised cooling production and distribution grid. As a result, it has high capital expenditures (CAPEX) for production and distribution. This significant capital outlay must be offset by lower operating costs. Various production technologies can be used to reduce operating expenses (OPEX) through a centralised plant. The establishment of the distribution grid accounts for roughly half of the total investments. As a result, district cooling is economically viable in areas with high cooling demand density but expensive in low-density areas.
Impact of COVID-19
The COVID-19 has had a negative impact on the global growth of the district cooling market. The pandemic has reduced the demand for district cooling. Governments around the world have been forced to curtail business activities in order to limit the spread of COVID-19. Companies in various geographies were forced to shut down their manufacturing facilities and services as partial or full lockdowns were imposed to stop the virus's spread. Due to the scarcity of raw materials, this resulted in higher procurement costs, which ultimately resulted in order closure delays. As a result, the pandemic has had a short-term negative impact on the demand for district cooling.
Segmentation By Production Technique:
By Production Technique the market is segmented into Free Cooling, Absorption Cooling, and Electric Chillers. During the forecast period, the electric chillers market is expected to be the largest segment in the district cooling market by production technique. When combined with thermal energy storage, electric chillers are suitable for large-scale operations and can use renewable energy to store chilled water (TES). Such factors are expected to fuel the growth of the district cooling market's electric chillers segment.
Segmentation By Application:
Based On the application the market is segmented into commercia lndustrial and residential. Healthcare, educational, retail, government, office, and airport are all sub-segments of the commercial segment. During the forecast period, the commercial segment is expected to be the largest segment in the district cooling market by application. The development of new infrastructure in Middle Eastern countries, as well as the growing need for businesses to reduce their carbon footprint, are expected to drive the growth of the commercial segment of the district cooling market.
Segmentation By Organization sizes:
Based on the organization sizes the market is segmented into small & medium enterprises and large-scale enterprises.
Segmentation By Vertical:
Based on the vertical segmentation the market is segmented into Government and Defense Manufacturing, Energy and Utilities, Transportation and Logistics, Healthcare and Life sciences and Other Verticals. In 2019, the manufacturing sector dominated the global predictive maintenance market share. Manufacturing equipment maintenance, such as machinery, pumps, elevators, and industrial robots, faces a number of challenges, which is why predictive maintenance has grown in popularity in the industry. The healthcare sector, on the other hand, is expected to grow at the fastest rate in the future, owing to the fact that predictive maintenance of healthcare equipment such as X-ray, MR, tomography, and mammography is one of the most important considerations for hospitals looking to improve decision-making capabilities and operational efficiencies.
Segmentation by Region
Based on region, the NGS services market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. The Middle East & Africa region is estimated to be the largest market for district cooling, followed by the Asia Pacific. The Asia Pacific region is also projected to be the fastest-growing market. The Middle East & Africa is expected to dominate the market due to the Growing affluent population and increasing construction activities especially in countries such as UAE, Saudi Arabia, and Qatar.
The leading players in the global district cooling market include National Central Cooling Company PJSC (TABREED) (UAE), Emirates Central Cooling System Corporation (EMPOWER)(UAE), Emirates District Cooling, LLC (EMICOOL) (UAE), Qatar District Cooling Company (QATAR COOL) (Qatar). Between 2017 and 2021, the companies adopted growth strategies such as contracts & agreements, investments & expansions, partnerships, collaborations, alliances & joint ventures to capture a larger share of the district cooling market.
Tabreed announced the purchase of an 80 percent stake in Emaar Properties PJSC's (DFM: Emaar) Downtown Dubai district cooling business for AED 2.48 billion in April 2020. (USD 675 m). As part of the long-term partnership with Tabreed, Emaar, one of the world's largest real estate companies and a global property developer, will retain a 20% stake.
Empower announced a new agreement with Mitsubishi Heavy Industries Thermal Systems in September 2021 to take advantage of Mitsubishi's revolutionary air-conditioning and heating systems, which would result in a qualitative leap in Empower's environmentally friendly district cooling operations.
Based on production technique,
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