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Dubai mulls new rules to bring transparency to district cooling

RIYADH, June 15, 2022

A new suite of district cooling regulations aimed at reducing excessive billings and other issues is nearing completion, a senior government official said at the two-day Mena District Cooling Projects Conference which opened yesterday (June 14) in Dubai.
 
"The grace period for the district cooling service providers and billing agents will expire on September 30, when the new comprehensive set of district cooling regulations comes into effect. Following this, we will supervise and monitor the activities of the district cooling companies to ensure compliance with the issued regulations," remarked James Grinnell, the Head of Water at Regulatory and Supervisory Bureau (RSB) for Electricity and Water Sector in Dubai.
 
RSB was established in 2010 by Dubai government to regulate its power and water sector. It was mandated to regulate the Independent Water and Power Producers (IWPP) in 2011, and has supported Dubai's Demand-Side Management (DSM) since 2013. 
 
Last year it received mandate to regulate the district cooling sector as per the Executive Council Resolution No. 6 of 2021.
 
In permitting companies, the RSB has ensured last year's reductions to the fuel-surcharge are being passed through to customers by billing agents. 
 
It also aims to ensure only one deposit will be allowed per unit – either from landlord or tenant, prohibit prolonged estimated billing, fast replacement of faulty meters.
 
Grinnell pointed out that as per the new regulations, district cooling permit holders have obligations to develop and publish a customer charter and measure performance against it, clear engagement obligations when dealing with customers in arrears, obligation to deliver chilled water, prompt return of deposits, reduce occurrence of excess contract capacity estimates; penalties for poor energy performance, obligation to monitor and report health and safety.
 
"These new sets of regulations will bring increased transparency and establish stakeholder accountability to make the district cooling sector more efficient and customer centric. Customers must see that district cooling offer good value for money," he added.
 
According to Grinnell, RSB has so far issued 22 district cooling permits out of 24 applications among 28 companies. Among the billing agents, it has licensed 11 out of 12 applications and 11 service providers out of 12 applications.
 
"Following the mandate, we started to talk to all the stakeholders in the district cooling industry, and over the last year, have developed a set of regulations to implement the regulatory framework. The new regulations come into effect on September 30, 2022, when the grace period for the operators expires," he added.
 
Other governments in the Middle East region are also putting the regulatory regimes to ensure structured growth of the sector. Governments of Abu Dhabi, Saudi Arabia too have been working on regulations over the last few years.
 
Leila Noubough Nasr, District Cooling Regulation Senior Specialist at Abu Dhabi Department of Energy, said the government has put a sound regulatory environment for the district cooling sector in the emirate. 
 
"We have so far issued four licenses with 230,000 RT licensed capacity in the emirate. One of the key achievements has been reduced consumption charge for the residential end-users," he added.
 
More than 250 delegates including senior government officials, project owners, developers, utility suppliers, industry experts and key stakeholders are taking part in the Mena District Cooling Projects Conference that focused on the growth of this important sector.
 
The two-day event discussed project opportunities worth $15 billion or 10 percent of the $150 billion global district cooling market. 
 
The conference takes place at a time when the district cooling sector is expanding at a fast pace in the UAE, GCC and the rest of the Middle East and North Africa due to a global target of zero net emission by 2050.



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