How we Helped them?
Regulation of District Cooling Services
For the past two years, we helped the Abu Dhabi Department of Energy with their regulation of district cooling, with a focus on the economic clauses listed in Decision 44. This involved analysis of financial and levelised cost models submitted by three district cooling service providers (PAL Cooling; Tabreed; and Manazel).
For this engagement, our team:
- used district cooling benchmarks, for capex, opex and the cost of capital, to assess the efficiency of ~30 district cooling plants in Abu Dhabi;
- calculated the Internal Rate of Return (IRR) for the concession period and compares it with the WACC benchmark at the date of construction;
- reviewed charge structures and escalation rates;
- compared the levelised costs of conventional cooling with the levelised costs of district cooling, to advise whether customers are getting a good deal from their DC provider.
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