DISTRICT COOLING A promising and sustainable option for HFC phase-down Ahmed Shifaz - Assistant Resident Representative United Nations Development Programme Thank you very much for the opportunity to present here today. And gratluations to the Ministry of Environment and Energy for organizing such a useful and important event. My presentation today is mainly to share with you the findings of a pilot feasibility study that was conducted on district cooling. The bulk of the work was carried out in 2015/2016 and the report finalized in 2016 with participation from all stakeholders. The study was undertaken by

Background Maldives HCFC Phase-out Management Plan targets complete elimination of HCFC use by 2020. UNDP together with the Ministry of Environment and Energy assigned Devcco to undertake the feasibility study late in 2015. The overall objective was originally to assess the possibilities for district cooling (DC) in Male’, but a change of scope was made to include Hulhumale’. Presentation covers the key findings and recommendations. Cooling solutions, namely Refrigeration and air conditioning are the main users of HCFC and HFC . A large chunk of that is accounted for in the Air conditioning sector. An alternative is therefore required to minimize if not eliminate HCFC and HFC usage

Key Findings In Hulhumale’ the potential demand has been calculated to 300 MW cooling capacity. Since the Hulhumale’ developments will be populated over several years a development of District Cooling in three phases of 100 MW cooling each has been recommended. It has been found that a Sea Water Air Conditioning system with a minimum of installed chiller capacity can provide feasible and competitive district cooling in Hulhumale’ Capital expenditure for each phase has been calculated to USD 108 million With fully implemented district cooling in Hulhumale’ carbon dioxide savings of 426,000 tons annually can be achieved. Minor savings of carbon dioxide could be achieved also in the Male’ clusters but from a profitability perspective they are not feasible. Saving of direct emission from refrigerant

District cooling Sea water pumped in from deep. Customer ETS Production Sea water Distribution Sea water intake 1,000 m depth, 7°C Supply temperature 6°C Return temperature 16°C Sea water return 17°C Chillers, 20 MW Sea water pumped in from deep. A production and distribution plant close to shoreline Underground piping similar to utilities would take it to customers and their internal transfer systems

Recommendations Continue the stakeholder analysis with emphasis on appointing a Governmental or other body that can act as the primary stakeholder for the continued DC development. Prioritize a pilot DC system in Hulhumale’ to demonstrate the technology. The large advantage for Hulhumale’ is that building systems there can be adapted to receive the DC service from start without the substantial costs tied to retrofitting of existing buildings. If built in Hulhumale’, installations for the pilot system can potentially be integrated in a commercial system later on. Assess the possibilities to obtain international development funding and/or green funding along with relevant competence and resources for continued DC development including a pilot DC system. It is also recommended that the Government of Maldives initiate a process to define building standards for new developments in order to promote ducted central air conditioning systems. Such standards will facilitate the introduction of DC. Assess the possibilities to co-ordinate all relevant previous and current sea water cooling plans in order to reduce cost and improve likelihood of success. Hulhumale’ presents an opportunity because it is currently being developed and new development such as roads and buildings phases can be built with these plans already in place.

Business development schedule Pre-construction Construction Operation FS Business Development 1 year + Structuring ownership and stakeholders Project Management Basic engineering Permitting Financing Developing customer concept and contracts Marketing and sales Risk management Pre-construction 1 year Project Management Basic engineering Procurement/contracting Permitting Securing land rights Financing Marketing and sales Risk management Construction 1.5-2 years Project Management Construction management Acquisition of key administrative and operational staff Marketing and sales Technical support for customer installations Risk management Operation General business administration Technical operation and maintenance Marketing and sales Customer support Risk management

Development funding for next steps The calculated total CAPEX for a 100 MW phase is approximately USD 108 million. A one year project development phase for a Hulhumale’ 100 MW phase is estimated to USD 2.5 million. Initial structuring of ownership and stakeholders could be a matter of 5-10% of the amount for the development phase. The range of required funding of a pilot system would depend on the size and nature of the project. Potential international funding include: NEFCO – Nordic Environment Finance Corporation – lead partner in CCAC NIB – Nordic Investment Bank Sida – Swedish International Development Agency CCAC – Climate & Clean Air Coalition Montreal Protocol Multilateral Fund (MLF) UNDP/UNIDO/UNEP World Bank DC operators/Equipment suppliers

Financing options for the DC system The most obvious form of financing seems to be project financing due to the size of the DC development. Is project financing a realistic option in the Maldivian context? What would be the typical Maldivian model to finance an infrastructure project of this size (several hundred MUSD?) Are there any obvious international participants?

Pilot Project Initiation Could be a project for local utilities? The Government? Preferably in Hulhumale’ in order to use pilot installations in future full scale system.