DECODING CaaS

Henrique Pereira, CEO, Taka Solutions, firmly believes Cooling as a Service is the way forward at a time when financial headwinds are forcing many building owners to look for options to cut down on capital costs. Excerpts from an interview he gave to Surendar Balakrishnan of Climate Control Middle East…

HOW would you define the scope of Cooling as a Service (CaaS)? Do the design, supply, installation, commissioning, operation & maintenance –including electricity – and repair charges rest with you as the provider of the service?

The purpose of CaaS is to offset from the customer any expense related to the chiller. We have to maintain, operate and retrofit it to a condition to meet the cooling needs of the building with the highest level of energy efficiency we can achieve. This includes replacement, upgrades, optimisation, operation costs, maintenance, spare parts, consumables, repairs and utility costs, so that the cost of owning and operating is translated to zero for the customer, after the customer enters into the CaaS agreement. The customer pays the tariff for consumption of chilled water. A District Cooling contract is similar – you pay for the installed capacity and the consumption, and a key difference is that CaaS is localised. There are other differences, of course. In District Cooling, there are common charges that don’t apply in the case of CaaS. For instance, you have a connection charge in District Cooling; we don’t charge the customer to enter into a contract. A District Cooling contract has a billing charge, which we don’t have. Again, while District

Cooling involves a disconnection and reconnection charge, we don’t have a suspension charge, in case you wish to refurbish a building, say. You have a Delta T charge in a District Cooling setup; we don’t have that. Our business is about efficiency, and Delta T is part of the efficiency equation. It does not mean every customer will have perfect Delta T, but as a variable, we don’t charge.

In the case of CaaS, when it comes to consumption of chilled water, you pay zero if you don’t consume any at all in a month. That said, a minimum consumption has to be met. In certain months, you can take zero chilled water, but on an annual basis, there is an average consumption charge. The consumption varies significantly in the course of the year – during summer, customers tend to use more chilled water, and during winter, they use less of it. Likewise, the Delta T is good in some months and very poor in some months. The point I am trying to convey is that you need to consume a minimum volume of chilled water for our model to work. But our charge is significantly less when compared to District Cooling. That is because we design a customised solution for every individual customer, and that is where CaaS essentially differs from District Cooling. We are not bound by rigidity. We can design a solution for them