It has come to our attention that there are some questions about Qatar Cool's charges for the chilled water supply via District Cooling on The Pearl Qatar. Therefore, we wish to clarify the following:
DISTRICT COOLING AND ITS BENEFITS:
District cooling is a utility that provides chilled water from centralized plants through a pipe distribution network to multiple buildings. The chilled water is mainly used for air conditioning purposes. Such technology has been known to provide a balanced synergy between the challenges of Energy, Environment, and Economy.
Energy and Environment wise, the system is designed to save 40 to 60% of the power required compared to conventional air conditioning systems. The energy savings translate to lower power generation requirements; hence, lower CO2, NOx, and Other harmful gas emissions providing for a green environment.
Economic benefits compared to conventional air conditioning systems, the following are generally recognized:
Reduction of initial capital investment and elimination of future capital upgrades to the building or tower owner. The capital investment in this case includes civil, mechanical, and electrical infrastructure to support conventional systems. It also includes finance and administrative costs to make available such infrastructure and to carry out such works. It also includes all upgrades for the life of the contract.
Lower operation and maintenance cost over conventional systems.
DISTRICT COOLING CONTRACT STRUCTURE
Qatar Cool is a private utility company which utilizes the district cooling business model which is based on long term payback. Our contracts are usually 20 years in term. Our returns are in line with other utilities.
Qatar Cool's business model is based on agreements with tower owners or developers to provide chilled water from central plants via a pipe distribution network. The agreement basic structure is usually as follows:
Contract Capacity: The capacity is the required chilled water "quantity" to handle the air conditioning load for the entire tower or premise. The developer dictates the required capacity in this case and Qatar Cool makes available such capacity through the central plants and a dedicated network to the premises. The capacity is measured by Tons of Refrigeration (TR), which is equal to 12,000 BTU per hour.
Inside the premises, Qatar Cool installs what is called an Energy Transfer Station (ETS), where the chilled water is supplied from the central plant to one side (primary side). On the secondary side (inside the tower) the developer distributes the capacity to individual units per the design requirements.
Qatar Cool and the developers enter into a long term agreement, usually for 20 years, to guarantee the proper supply of chilled water to the primary side of the ETS at the agreed capacity.
The fees between Qatar Cool and Each developer are set in the agreement as follows:
Connection Fee: QR1,800 to QR2,000 per TR (based on the year of execution of the agreement). This fee covers the cost of installed equipment in the premises. This is a one-time payment from the developer to Qatar Cool.
Capacity Fee: This is a two-part fee:
One-Time Capacity Fee: Currently set at QR5,500 per TR. This fee covers part of the infrastructure to bring the chilled water to the premises. Similar to the Connection Fees, this is a one-time payment from the developer to Qatar Cool.
Annual Capacity Fee: QR720 per TR per year. This is an ongoing fee over the life of the contract payable once per year and covers the operation, maintenance, upgrades, capital investment, insurance, and other administrative costs required for operating the district cooling plant. This fee is varied according to CGPI, and is payable by the developer or transferred to the unit owners by the developer.
Consumption Fee: Currently set at QR0.206 per TR-HR. This fee is based on the actual usage of the chilled water and is billed monthly based on the meter reading. This fee is based on the cost of the power, water, and water treatment. This fee may change if the cost of the listed utilities is increased or decreased.
Deposit: as any other utility, Qatar Cool requires a 3-month refundable deposit for the Annual Capacity and Consumption Fees. This will be refunded at the end of the term in case of no default in payment.
Qatar Cool enters into contracts with the developers for the above, then, usually, the developer divides the cost of the one-time payments, or part thereof, to the unit owners or includes them in the price of the individual units as per the Individual Sale and Purchase Agreement (SPA) between developer and unit owners. The end user is then responsible for the recurring costs afterwards, being the Annual Capacity and Consumption Fees.
The above fees have always been the same and have not been modified by Qatar Cool since they were established.
Historically, Qatar Cool has only entered into agreements with individual tower owners (developers); however, since The Pearl Qatar is considered a free-hold zone, Qatar Cool is currently considering entering into agreements with the end users. The agreements will be structured to cover the recurring fees. In particular:
Annual Capacity Fees: QR720 per TR per year
Consumption Fees: QR 0.206 per TR-HR (based on usage)
Meter Maintenance Fee: QR 50 per month
Administrative Fee: QR 10 per month
Activation Fee: QR350 (one time)
Deposit: Depending on size of unit
At this stage, Qatar Cool is only contracted with the developers. Qatar Cool does not establish agreements with the unit owners until the unit is handed over. The contract capacity for the individual units is usually dictated by the developer and includes an allocation for the common areas and shared facilities.
WHAT DOES THIS MEAN TO THE INDIVIDUAL UNIT OWNERS?
Based on the facts above, below is an example for illustration purposes only of what Qatar Cool believes the charges modes for one 200 m2 unit may be:
1. According to the agreement between Qatar Cool and the developer, the following will be paid:
Unit Area: 200 square meter.
Capacity: Approximately 11 TR
This capacity in our estimate includes an allocation for common and shared area cooling requirements - The developer must establish this
One-Time Charges to be paid by the Developer (excluding deposit): QR82,500
Calculated as follows: [Connection Fees * Capacity + One Time Capacity Fee * Capacity] or [2,000 * 11 + 5,500 * 11 = 82,500]
Presumably, the above charges were included as part of the total cost of the tower construction. Please note that the charges passed from the developer to the unit owner are governed by the Individual Sales and Purchase Agreement between them. Qatar Cool does not interfere between the developers and its purchasers. Each Developer elects to establish his/her profits and agreements with the unit purchasers on their own.
2. If Qatar Cool and the Unit Owners enter in cooling agreements, then the estimated recurring charges may be as follows:
Unit Area: 200 square meter
Cooling Capacity: Assume the Same as Above: 11 TR
This capacity in our estimate includes an allocation for common and shared area cooling requirements The developer must establish this
Annual Capacity Charge: QR7,920 per year
Calculated as follows: [Annual Capacity Fee * Capacity] [720 * 11 = 7,920]
Monthly Consumption and Administrative Charges: Approximately QR700 to QR750 per month
Averaged over 12 months and assuming year-round occupancy
Calculated as follows: [(Consumption Fee * Annual Estimated Full Load Hours * Capacity)/12 Months + Meter Maintenance + Admin Fee] or [(0.206*3,500*11)/12 + 50 + 10 = 721]
Refundable Deposit: QR10,000
We always strive to bring the most reliable and most efficient chilled water to our end users and we look forward to better serving everybody.
We have nothing more to add and individual inquiries should be addressed to the relevant Party in the SPA, which is the developer.
[Jul - 26 - 2009]
Qatar Cool Charges on The Pearl Qatar
http://www.qatarcool.com/newsroom/popupnews.cfm?newsId=51¤tyear=2009
It has come to our attention that there are some questions about Qatar Cool's charges for the chilled water supply via District Cooling on The Pearl Qatar. Therefore, we wish to clarify the following:
DISTRICT COOLING AND ITS BENEFITS:
District cooling is a utility that provides chilled water from centralized plants through a pipe distribution network to multiple buildings. The chilled water is mainly used for air conditioning purposes. Such technology has been known to provide a balanced synergy between the challenges of Energy, Environment, and Economy.
Energy and Environment wise, the system is designed to save 40 to 60% of the power required compared to conventional air conditioning systems. The energy savings translate to lower power generation requirements; hence, lower CO2, NOx, and Other harmful gas emissions providing for a green environment.
Economic benefits compared to conventional air conditioning systems, the following are generally recognized:
Reduction of initial capital investment and elimination of future capital upgrades to the building or tower owner. The capital investment in this case includes civil, mechanical, and electrical infrastructure to support conventional systems. It also includes finance and administrative costs to make available such infrastructure and to carry out such works. It also includes all upgrades for the life of the contract.
Lower operation and maintenance cost over conventional systems.
DISTRICT COOLING CONTRACT STRUCTURE
Qatar Cool is a private utility company which utilizes the district cooling business model which is based on long term payback. Our contracts are usually 20 years in term. Our returns are in line with other utilities.
Qatar Cool's business model is based on agreements with tower owners or developers to provide chilled water from central plants via a pipe distribution network. The agreement basic structure is usually as follows:
Contract Capacity: The capacity is the required chilled water "quantity" to handle the air conditioning load for the entire tower or premise. The developer dictates the required capacity in this case and Qatar Cool makes available such capacity through the central plants and a dedicated network to the premises. The capacity is measured by Tons of Refrigeration (TR), which is equal to 12,000 BTU per hour.
Inside the premises, Qatar Cool installs what is called an Energy Transfer Station (ETS), where the chilled water is supplied from the central plant to one side (primary side). On the secondary side (inside the tower) the developer distributes the capacity to individual units per the design requirements.
Qatar Cool and the developers enter into a long term agreement, usually for 20 years, to guarantee the proper supply of chilled water to the primary side of the ETS at the agreed capacity.
The fees between Qatar Cool and Each developer are set in the agreement as follows:
Connection Fee: QR1,800 to QR2,000 per TR (based on the year of execution of the agreement). This fee covers the cost of installed equipment in the premises. This is a one-time payment from the developer to Qatar Cool.
Capacity Fee: This is a two-part fee:
One-Time Capacity Fee: Currently set at QR5,500 per TR. This fee covers part of the infrastructure to bring the chilled water to the premises. Similar to the Connection Fees, this is a one-time payment from the developer to Qatar Cool.
Annual Capacity Fee: QR720 per TR per year. This is an ongoing fee over the life of the contract payable once per year and covers the operation, maintenance, upgrades, capital investment, insurance, and other administrative costs required for operating the district cooling plant. This fee is varied according to CGPI, and is payable by the developer or transferred to the unit owners by the developer.
Consumption Fee: Currently set at QR0.206 per TR-HR. This fee is based on the actual usage of the chilled water and is billed monthly based on the meter reading. This fee is based on the cost of the power, water, and water treatment. This fee may change if the cost of the listed utilities is increased or decreased.
Deposit: as any other utility, Qatar Cool requires a 3-month refundable deposit for the Annual Capacity and Consumption Fees. This will be refunded at the end of the term in case of no default in payment.
Qatar Cool enters into contracts with the developers for the above, then, usually, the developer divides the cost of the one-time payments, or part thereof, to the unit owners or includes them in the price of the individual units as per the Individual Sale and Purchase Agreement (SPA) between developer and unit owners. The end user is then responsible for the recurring costs afterwards, being the Annual Capacity and Consumption Fees.
The above fees have always been the same and have not been modified by Qatar Cool since they were established.
Historically, Qatar Cool has only entered into agreements with individual tower owners (developers); however, since The Pearl Qatar is considered a free-hold zone, Qatar Cool is currently considering entering into agreements with the end users. The agreements will be structured to cover the recurring fees. In particular:
Annual Capacity Fees: QR720 per TR per year
Consumption Fees: QR 0.206 per TR-HR (based on usage)
Meter Maintenance Fee: QR 50 per month
Administrative Fee: QR 10 per month
Activation Fee: QR350 (one time)
Deposit: Depending on size of unit
At this stage, Qatar Cool is only contracted with the developers. Qatar Cool does not establish agreements with the unit owners until the unit is handed over. The contract capacity for the individual units is usually dictated by the developer and includes an allocation for the common areas and shared facilities.
WHAT DOES THIS MEAN TO THE INDIVIDUAL UNIT OWNERS?
Based on the facts above, below is an example for illustration purposes only of what Qatar Cool believes the charges modes for one 200 m2 unit may be:
1. According to the agreement between Qatar Cool and the developer, the following will be paid:
Unit Area: 200 square meter.
Capacity: Approximately 11 TR
This capacity in our estimate includes an allocation for common and shared area cooling requirements - The developer must establish this
One-Time Charges to be paid by the Developer (excluding deposit): QR82,500
Calculated as follows: [Connection Fees * Capacity + One Time Capacity Fee * Capacity] or [2,000 * 11 + 5,500 * 11 = 82,500]
Presumably, the above charges were included as part of the total cost of the tower construction. Please note that the charges passed from the developer to the unit owner are governed by the Individual Sales and Purchase Agreement between them. Qatar Cool does not interfere between the developers and its purchasers. Each Developer elects to establish his/her profits and agreements with the unit purchasers on their own.
2. If Qatar Cool and the Unit Owners enter in cooling agreements, then the estimated recurring charges may be as follows:
Unit Area: 200 square meter
Cooling Capacity: Assume the Same as Above: 11 TR
This capacity in our estimate includes an allocation for common and shared area cooling requirements The developer must establish this
Annual Capacity Charge: QR7,920 per year
Calculated as follows: [Annual Capacity Fee * Capacity] [720 * 11 = 7,920]
Monthly Consumption and Administrative Charges: Approximately QR700 to QR750 per month
Averaged over 12 months and assuming year-round occupancy
Calculated as follows: [(Consumption Fee * Annual Estimated Full Load Hours * Capacity)/12 Months + Meter Maintenance + Admin Fee] or [(0.206*3,500*11)/12 + 50 + 10 = 721]
Refundable Deposit: QR10,000
We always strive to bring the most reliable and most efficient chilled water to our end users and we look forward to better serving everybody.
We have nothing more to add and individual inquiries should be addressed to the relevant Party in the SPA, which is the developer.