Adani Energy Solutions Limited (AESL), known for its expertise in power transmission under the Adani Group, is making significant strides in the district cooling services (DCS) sector. After years of careful development, AESL is poised to roll out large-scale DCS facilities across various sectors, including industrial, commercial, residential, and mixed-use projects. This move is set to establish DCS as a key revenue stream for the company.
What are District Cooling Services?
District cooling services represent an innovative approach to climate control, utilizing a centralized system that distributes chilled water or alternative cooling mediums from a single source to multiple buildings. This method not only enhances energy efficiency but also provides substantial cost savings compared to traditional cooling systems for individual structures.
- Cost-Efficient: Offers 30-35% savings for residents and 20-25% for commercial users.
- Centralized System: Reduces operational and maintenance costs through economies of scale.
Transition to Cooling-as-a-Service
AESL is entering the DCS market through a Cooling-as-a-Service (CaaS) model. Under this framework, the company adopts a DBFOO (Design, Build, Finance, Own, and Operate) approach, allowing it to cover the entire capital expenditure (capex). Users only pay based on their actual usage, thus alleviating the financial burden on real estate developers regarding HVAC investments. The capex can vary widely, ranging from ₹1-1.5 lakh per ton of refrigeration (TR), depending on project scope.
Strategic Partnerships and Initiatives
Recently, AESL’s subsidiary, Adani Cooling Solutions (ASCL), entered a partnership with the Maharashtra government’s Mahatma Phule Renewable Energy and Infrastructure Technology (MAHAPREIT). This collaboration aims to establish DCS infrastructure and deliver CaaS in the Mumbai Metropolitan area and beyond.
- Key Locations: Development is planned for areas such as Mira Bhayandar, Thane (Kisan Nagar, Hiranandani Estate), Mulund, and Mahape.
Future Prospects and Market Growth
The integration of DCS into urban planning is a priority for the partners, who aspire to incorporate these systems into new projects across Mumbai and Navi Mumbai. According to a 2023 report on India’s Cooling Action Plan, the nation’s cooling market is expected to expand significantly, increasing from 130 million tons of refrigeration (MTR) in 2022-23 to 720 MTR by 2037-38.
Interestingly, India’s per capita cooling energy consumption in 2023 was about 147 kWh, starkly lower than the global average of 1,539 kWh. With an air conditioning penetration rate of just 8%, compared to 60-90% in other developing nations, there’s a massive potential for growth, especially considering India’s high cooling degree days (CDD) exceeding 4,200 billion.
In summary, AESL’s venture into district cooling services not only promises to revolutionize energy efficiency in urban environments but also positions the company as a leader in sustainable cooling solutions. As it rolls out its ambitious plans, stakeholders and consumers alike can anticipate significant benefits from this innovative approach to cooling.
