Published on: 1/07/2008
Publication: Climate Control
Country: United Arab Emirates

THE NEW SLAB RATE PENALISES CENTRAL AIR CONDITIONING PLANTS AND DISTRICT COOLING PLANTS, WHILE IT SHOULD BE THE OTHER WAY AROUND, CONTENDS GOERGE BERBARI…

Last month, I reviewed the beneficial impact of thermal energy storage (TES) and treated sewage effluent (TSE) on the district cooling sector. This month, in this second part of the article, my focus is on the new slab rate that utilities have introduced for power and water.

DEWA, SEWA, FEWA, the utilities in Dubai and the northern Emirates, have faced operational losses due to the shortage of subsidized Natural Gas in the summer season and need to operate the power plants with the more expensive diesel fuel.

To curb losses, DEWA resorted to a slab rate in early March. The new rates and their impact on various types of air conditioning systems are listed in Table 1.

questions come in mind. For instance, are the utilities unknowingly encouraging individual, inefficient air conditioning system? It is a pertinent questions, because after all, it is a fact that these individual systems will be paying the average annual rate of power for a relatively large apartment (of 200m² built – up area) of 22.8 fils/kWh and closer to 20 fils/kWh for smaller apartments?

Are the utilities unintentionally curbing the usage of efficient central plants and district cooling, because these systems will be paying an annual average rate close to 33 fils/kWh?

The analysis has shown that a 200m² apartment would pay a total annual utility bill (for air conditioning and other electric usage) of:

• Dh 11,975 (or Dh5.6/ft2/year)when ducted splits are used.
• Dh 15,188 (or Dh7.1/ ft2/year) when air-cooled chillers are used.
• Dh 12,769 (or Dh5.9/ ft2/year), with drinking water for the cooling tower make-up).
• Dh 11,099 (or Dh5.2/ ft2/year) when water cooled chillers are used, with TSE for the tower make – up.
• Dh 14,083 (or Dh6.5/ ft2/year) when district cooling is used.

Was the intent of the electric utilities to achieve the above result? Obviously, ’no’ is the answer. They simply wanted to increase revenues, which has led to a situation where large users, including central air conditioning plants and district cooling plants are penalized, whereas everywhere else in most of the developed world it is the sector that is given preferential or bulk rates.

What is the proposed solution, then? Taking into consideration that TSE and TES will be imposed, as mentioned in the first part of this article, I proposed a solution which will bill the bulk users in a composite three-tier rate, in line with most of the developed world and inline with what is utilized in some Eastern countries, such as Jordan.

The details of the three-tier rate are…

1. Monthly peak demand rate
2. Daytime rate for the 12hours of the day (8.01am – 8pm)
3. Night-time rate the 12 hours of the day ( 8.01am – 8pm)

The monthly demand rate that records the electric demand every half an hour and would charge the maximum demand recorded during that month is Dh20/KW/month.

The day time rate is proposed to be 24 fils/kWh, and the night – time rate is proposed to be 16 fils / KWh. That will translate to an annual average of 23.6 fils /kWh, which is slightly higher than that of the individual apartments (as listed in Table 2).

In addition, the fare value of TSE can be raised from 0.5 fils/ imperial gallon to 1.0 fils/ Imperial gallon (or Dh2.2/m³), to be in line with the BOO rate of sewage treatment plants.

The above would lead to a district cooling energy rate of 30 fils/tonne-hour , which is a very competitive rate and lower than the old 2007 average rate of 32 fils/tonne-hour an d much lower than 48 fils/tonne-hour, as per average 2008 rates.



Table 3 tabulates the different district cooling energy rates with the current slab and the proposed composite rate.

The resulted district cooling energy rates would result in the lowest possible total 200m2apartment utilities fee of 10,297.00 (or Dh4.78/ft²/year).

Would the utilities implement this solution or one similar to it? In line with the green movement that the country is now adopting, we have no doubt that the utilities would respond to our request. After all, they are the first to benefit from the district cooling sector utilizing TSE and TES. This will translate into win-win situation for the utilities, district cooling service providers and the users.