Efficient cooling idea passes $50m investment milestone
SWITZERLAND: The Cooling as a Service (CaaS) initiative, launched in early 2019 to scale up investments in clean and efficient cooling, has passed a $50m investment milestone.
The brainchild of the Basel Agency for Sustainable Energy (BASE), CaaS works to bring global finance and technology companies together with end-users to make low carbon cooling competitive with cheaper less efficient systems.
The CaaS initiative is operating in Africa, Latin America and Asia. It uses a pay-per-use model applicable to multiple sectors across the world, including real estate, industrial manufacturing, public and private buildings, and cold-storage for health and food.
Today, the CaaS model is said to be saving 68GWh of electricity every year and avoiding 36,000 tonnes of CO2 annually. Over the 15-year contractual lifetime of these projects, this equates to more than 500,000 tonnes of CO2 equivalent. Interest in the model is expected to continue growing significantly, as the cooling market reaches more than $1.5 trillion in investments over the next 10 years.
Under the CaaS system, users avoid the high upfront costs of purchasing modern cooling equipment by paying a monthly fee, based on the amount of cooling used. This fee includes maintenance, repairs, and running costs – such as electricity and water – reducing the problems of ongoing operation and ensuring guaranteed uptime of the cooling system.
The operators argue that because manufacturers maintain ownership of the cooling technology, it is in their interest to provide state-of-the-art, reliable systems that require minimal operation and maintenance. It also makes business sense for manufacturers to provide the most efficient technology because utilities, such as electricity and water, make up 80% of lifetime costs.
Already, the CaaS Alliance, a group of organisations committed to growing the model worldwide, has over 50 members. The manufacturing partners include companies like Daikin, Trane, Carrier, Danfoss, Engie and Johnson Controls.
“The proliferation of inefficient and polluting cooling systems is one of the greatest challenges of the climate emergency and this model will prove vital to tackling it. It is in the hands of investors to decide how much they want to tap into this burgeoning cooling market,” said Thomas Motmans, Sustainable Energy Finance Specialist of BASE (The Basel Agency for Sustainable Energy), a Swiss not-for-profit foundation, a specialised partner of United Nations Environment.
“The climate emergency requires us to entirely rethink our approach to cooling, to tackle emissions, cut waste and improve livelihoods – all while keeping costs low for end users. The Cooling as a Service business model is providing a blueprint to do just that, establishing a service-based model for cooling that will transform a massive global market for cooling customers, technology manufacturers and investors.”