01 Nov 2017

Accelerating District Cooling in India - Delivering Smart and Efficient Cities

For many parts of India, space cooling is no longer a luxury and has become the new norm: from fans and small AC units in the residential sector, to large centralized chillers in offices, malls, hospitals and factories. The electricity demand for such cooling is straining India’s electricity system and policymakers are calling for more efficient, low-carbon and sustainable cooling solutions. Grid stress is felt particularly in Indian cities, where 40% of electricity demand can be for cooling and some utilities struggle to meet summer peak electricity demand. 

District cooling provides reliable cooling services, energy savings, emission reductions, financing gains, all in an integrated, scalable system that provides incentives for all stakeholders. In India, district cooling systems could reduce primary energy consumption for cooling by up to 50 percent. Unfortunately, strong city leadership and stakeholder coordination is needed to incorporate district cooling in existing and upcoming developments. “The money is there, as is the technology, but projects don’t exist, a core reason for which is uncertainty, whether on the part of investors, local governments, or municipalities. The DES Initiative is meeting this gap by preparing the market and building a project pipeline of bankable DES projects to scale investment.” Lily Riahi, Programme Manager and Global Lead, District Energy in Cities.

In India, the national coordinator of the Initiative is Energy Efficiency Services Limited (EESL), a hugely successful enterprise set up under India’s Ministry of Power to facilitate implementation of energy efficiency projects and take advantage of the US$23 billion energy efficiency market in India. EESL and the Initiative will work to incorporate district cooling in Indian cities, leapfrogging inefficient individual cooling systems to deliver future-proofed, smart and sustainable cities. In a country that generates two-thirds of its power with fossil fuels, district cooling is not only efficient but also a vital solution to reducing the carbon intensity of India. 

This district cooling pilot project is a US$454 million plan created from a partnership between EESL and GEF with the ambitious goal to mitigate 60 million tonnes in CO2 equivalent through energy efficiency projects in India. The initial $454 million investment will be sustained and enhanced through the establishment of a revolving fund that will grow with accrued savings from energy efficiency gains and enable further investment to finance additional projects. Under this project, EESL has set aside funds for promotion and investment in tri-generation systems in India which can deliver chilled water into district cooling systems, helping to cool entire neighbourhoods.

EESL and the Initiative will be working with cities in India to connect potential projects with investment. The cities initially assessed include Bhopal, Coimbatore, Pune, Rajkot and Thane, all of which can have commercially viable district cooling if an appropriate enabling environment is established. Creating this environment is the mission of District Energy in Cities, starting with the successful launch of the pilot project in Thane.

The Initiative and Danfoss, a crucial partner in implementation, envision that these initial district cooling projects will be replicated across the country. “Given Central Government’s vision to build 100 smart cities and our partnership with UN’s District Energy in Cities Initiative, we are certain that the pilot projects of District Cooling which are being launched today, will serve as an inspiration for the rest of the country and enable it to meet its sustainable development goals and the Paris Agreement,” Ravichandran Purushothaman, President, Danfoss, India.

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