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Cooling as a Service cost potential played up with major prize award - Refrigeration and Air Conditioning

Last updated: 10-09-2020

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Cooling as a Service cost potential played up with major prize award - Refrigeration and Air Conditioning

Expanded adoption of ‘cooling as a service’ (CaaS) business models that can limit the upfront cost barriers of more efficient refrigeration may be vital in addressing environmental challenges facing the industry.

Not-for-profit foundation the Basel Agency for Sustainable Energy (BASE) said the concept of cooling as a service is already providing new ways of providing vital cooling services for purposes such as agriculture and the cold chain.

BASE added, “The climate emergency requires us to rethink our approach to cooling from the bottom up, to tackle emissions, cut waste and improve livelihoods – all while keeping costs low for end users.”

“Fortunately, 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.”

The comments have been made following the recent announcement that Nigeria-based social enterprise ColdHubs will be the recipient of the latest Cooling as a Service (CaaS) Prize.

The award, which is overseen by BASE and the Kigali Cooling Efficiency Program (K-CEP), has recognised the group’s work to provide cold storage functions for farmers to store their food that is paid for on a per use basis.  Base said that an estimated 20,400 tonnes of food was saved from spoiling as a result of the company’s use of a CaaS business model that also reduced the related carbon emissions resulting from food production and loss.

ColdHubs chief executive Nnaemeka C Ikegwuonu said CaaS was helping to support African farmers with higher quality and more affordable cooling options.

He said, “Not only is this extending the shelf life of produce from two days to more than 21 days – thereby improving farmers’ income – it is also slashing emissions and creating new jobs for women in the service sector – the whole concept is a complete no brainer.”

Thomas Motmans, a finance specialist on sustainable energy for BASE, said that cooling as a service was ultimately about providing a strategic partnership between end users, cooling service providers and investors and other stakeholders.

He said, “End-users benefit from access to cooling at a competitive price and without the need to operate an asset, cooling providers benefit from being most competitive with their most efficient technologies, investors benefit from a stream of well-backed cash flows on green investments, and the planet benefits from lower energy demand, less waste and less harmful pollutants – it really is a win-win for all parties.”

CaaS is a term used to describe a concept where cooling functions are provided on a per-use basis as opposed to a client or end-user purchasing an air conditioning technology or other solution outright.  It is an approach that builds on a concept already widely in use for computing and software.

CaaS business models are seen by BASE as being especially important in fast developing economies in Africa, Asia and South America that are expected to see a surge in demand for refrigeration over the next 30 years

The Economist Intelligence Unit has predicted that an estimated US$1.5 trillion will be spend on air conditioning and refrigeration solutions over the next ten years.

Kevin Lane, energy analyst for the International Energy Agency (IEA) said that meeting this demand globally posed a range of challenges particularly around climate change.

He added, “Growing electricity demand for this air conditioning is one of the most critical blind spots in today’s energy debate. We need to deploy innovative new solutions to avoid a ‘cooling crunch’ over the next 30 years.”

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