District Cooling Market Size, Share, Growth Report 2032

Industry Prospective:

The global district cooling market size was worth around USD 26.9 billion in 2022 and is predicted to grow to around USD 45.84 billion by 2030 with a compound annual growth rate (CAGR) of roughly 7.91% between 2023 and 2030. The report analyzes the global district cooling market drivers, restraints/challenges, and the effect they have on the demands during the projection period. In addition, the report explores emerging opportunities in the district cooling industry.

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District Cooling Market: Overview

District cooling is a centralized cooling system that is used to provide air conditioning or chilled water to multiple buildings or districts from a central part. It is the exact opposite of district heating and is an excellent alternative to individual building cooling systems which generally makes use of standalone cooling equipment for every building. In district cooling, a central part is responsible for generating and providing chilled water, which is further distributed through a large network of underground pipes and ducts to several buildings including residential, commercial, and industrial in a district.

The water thus obtained can be used to cool the building’s air conditioning systems leading to a comfortable indoor environment. The central part is typically made of large cooling equipment such as cooling towers, chillers, or absorption refrigeration systems that perform the necessary function. The district cooling industry deals with the economic aspect of this technology.

Key Insights:

• As per the analysis shared by our research analyst, the global district cooling market is estimated to grow annually at a CAGR of around 7.91% over the forecast period (2023-2030)
• In terms of revenue, the global district cooling market size was valued at around USD 26.9 billion in 2022 and is projected to reach USD 45.84 billion, by 2030.
• The district cooling market is projected to grow at a significant rate due to the growing demand for energy efficiency
• Based on end-users segmentation, the commercial was predicted to show maximum market share in the year 2022
• Based on production technique segmentation, electric chillers was the leading technique in 2022
• On the basis of region, the Middle East was the leading revenue generator in 2022

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District Cooling Market: Growth Drivers

Growing demand for energy efficiency to drive market growth

The global district cooling market is projected to grow owing to the rising demand for energy efficiency across the globe. With the rising world population and rampant industrialization, the energy demand is at an all-time high. Energy, in several forms, is used throughout the day in the modern-age world.

However, in recent times, driven by the surging demand for energy, there is a growing need for achieving energy efficiency which ensures that resources are utilized optimally and are not wasted. District cooling systems are a prime example of achieving this vision as they tend to be highly efficient when compared to individual cooling systems. They make use of factors such as economies of scale which allows a centralized plant or system to cater to the chilled water needs of a large area. This aspect attracts both building owners and governments since it reduces the economic burden to a significant level.

District Cooling Market: Restraints

High initial cost to restrict the market growth

One of the key restraints existing in the district cooling industry is the high initial cost of implementing a large-scale plant such as district cooling. It is made of a centralized unit but requires the assistance of a complex distribution network to deliver chilled water. Creating such a network requires substantial upfront investment in infrastructure. This includes the construction of centralized plants, distribution networks, and the installation of pipes or ducts. The associated expense may dissuade private companies or government entities to invest in district cooling if they are unable to justify the cost-efficiency of the system.

District Cooling Market: Opportunities

Growing infrastructure projects to provide growth opportunities

The global district cooling industry is expected to benefit from the increasing rate of growing infrastructure projects across the world. This includes development in rural areas and redevelopment of urban regions to revitalize an aging infrastructure.

These projects may create several growth opportunities for service providers as many government or private developers may be keen on deploying district cooling in new development projects. It may be a part of the larger vision aiming at the sustainability and modernization of urban areas.

District Cooling Market: Challenges

Limited familiarity to challenge market growth

The global district cooling market may register limited growth due to the restricted familiarity and awareness among developers, building owners, and end-users about district cooling and its advantages. Many associated stakeholders are only familiar with traditional methods of building cooling systems and may not be comfortable with adopting a new approach. It is essential to conduct educational and awareness campaigns to ensure more consumers gain an understanding of the working and benefits of a district cooling system or network.

District Cooling Market: Segmentation

The global district cooling market is segmented based on end-users, production techniques, and region.

Based on end-users, the global market segments are residential, industrial, and commercial. The highest growth was observed in the commercial segment in 2022 and is expected to continue the same trend during the forecast period. It includes units such as office buildings, retail spaces, hotels, and other commercial establishments. Commercial centers have high energy requirements due to high occupancy rates, large occupied spaces, and the need to maintain a comfortable indoor space for customers and employees.

District cooling service providers generally target the commercial segment since they provide the former with a concentrated demand and showcase high potential economies of scale. However, residential buildings can also benefit from these systems since district cooling provides centralized cooling services to multiple residential units. In 2019, the average monthly energy consumption in commercial units in the US was around 6,066 kWh.

Based on technique, the district cooling industry is segmented into absorption cooling, free cooling, and electric chillers. The industry was led by the electric chillers segment in 2022. This method includes the use of mechanical compression and refrigerants to cool the air or water which is to be distributed throughout the district.

The main reasons for the wide adoption of electric chillers are reliability, efficiency, and ease of operation. They are available in different types including air-cooled or water-cooled chillers and also provide a wide range of capacities to meet the needs of different clients. Absorption cooling systems also generated significant revenue in 2022. They use heat energy generated from low-grade heat sources to drive the cooling process. The average temperature of chilled water in this system is between 6 to 8 Degree Celsius.

Recent Developments:

• In May 2023, Tabreet, a United Arab Emirates (UAE) district cooling company, announced a strategic partnership with Tata Realty & Infrastructure Ltd. With this move, the former has landed its first breakthrough project in the growing economy of India and will register an investment of Dh 44.34 million in the latter’s Intellion Park special economic zone located in the Gurugram area
• In April 2023, Emirates Central Cooling Systems Corporation PJSC (Empower), a leading service provider in the industry, announced the commencement of its new plant in Dubailand. The cooling capacity of this facility is 47,000 Refrigeration Tonnes (RT) and will serve the residential units of the Dubai Land Residence Complex (DLRC)
• In August 2022, ENOWA, an energy, hydrogen, and water subsidiary of NEOM, announced its plan to build a district cooling plant at OXAGON with a capacity of 25,000 refrigeration tons

District Cooling Market: Report Scope

District Cooling Market: Regional Analysis

The Middle East to register the highest growth

The global district cooling market is expected to register the highest growth in the Middle East region with significantly high revenue generated from the regions of UAE, Qatar, and Saudi Arabia. These countries have been at the forefront of developing the technology behind district cooling and deploying the associated services.

One of the primary reasons for the higher adoption rate is the high temperature in the Middle East along with rapid urbanization. The result was an added need for smarter and energy-efficient ways of ensuring cooling in buildings and occupied spaces.

The UAE boasts of one of the most well-established district cooling networks with cities such as Abu Dhabi and Dubai experiencing significant growth in the demand for district cooling. There are multiple ongoing projects to make the best of this system. The technology has also gained attention in North America and may register significant CAGR in North American regions.

District Cooling Market: Competitive Analysis

The global district cooling market is led by players like:

• Tabreed
• Engie
• Veolia
• Empower
• Emicool
• Emirates Central Cooling Systems Corporation (EMPOWER)
• Shinryo Corporation
• Ramboll Group
• Fortum
• Keppel Corporation
• Dalkia
• Danfoss
• Stellar Energy
• National Central Cooling Company (Tabreed)
• Singapore District Cooling
• Qatar District Cooling Company (Qatar Cool)
• Empower Energy Solutions
• Singapore Power Group
• Marafeq Qatar
• Logstor
• ADC Energy Systems
• Goteborg Energi
• Orascom Construction
• DC Pro Engineering
• SNC-Lavalin.

The global district cooling market is segmented as follows:

By End-Users

• Residential
• Industrial
• Commercial

By Production Technique

• Absorption Cooling
• Free Cooling
• Electric Chillers

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of The Middle East & Africa