INGENIEUR
customer without any form of risk management
through Acts or Laws.
Some form of regulatory framework is required
for DC industry to move forward. The regulatory
framework should address the issues as shown
in Figure 3.2
To facilitate economic efficiency, planning
policy must be in place to ensure sustainability of
the DC business. A comprehensive development
planning master plan that incorporates DC would
address this issue. Local authorities should
consider DC as part of the utilities services
during the planning stage. There should be proper
standards or guidelines for DC planning in urban
infrastructure planning. Issues such as rightof-way, service corridors and shared facilities
such as utility tunnels would facilitate economic
competitiveness.
Regulations can also address issues raised by
consumers. DC providers must comply with certain
Key Performance Indicators (KPI) pertaining to the
quality of service. Minimum standards for quality
of service must be defined similar to that of other
utilities service providers. A regulatory body can be
set up to provide supervision and enforcement as
well as medium for dispute resolution. Penalties
can be imposed on DC providers that fail to
achieve the desired quality of service. The KPIs
should spell out the obligations of DC p roviders on
utility efficiencies, supply and return temperatures,
metering accuracy, service reliability, quality and
availability. Similarly, customer obligations with
regards to delta T performance, non-payment,
unrealized load growth etc.; could ensure fairness
to all stakeholders.
Current practice of Chilled Water Purchase
Agreements (ChWP) is at best on an endeavour
basis. This situation does not help in convincing
future chilled water off-takers. Through regulation
of the DC business sector, some sort of "stick and
carrot" elements may be imposed on both the
supplier and off-takers in order to have a more
equitable ChWP agreement. A standard model of
the ChWP that clearly defines the customers’ rights
and DC provider obligations could be introduced to
address differences of ChWP agreements used in
current practice. This will reduce prejudices and
promote transparency in the industry.
In order to encourage growth, some incentives
should be provided by the Government to DC
6
66
VOL 62 APRIL – JUNE 2015
VOL 55 JUNE 2013
FACILITATE
ECONOMIC
EFFICIENCY
RESOURCES
EFFICIENCY
DISTRICT
COOLING
PROTECTION
TO
CUSTOMERS
ENCOURAGE
GROWTH OF
INDUSTRY
Figure 3 Needs to Regulate District Cooling
providers apart from existing TNB C2(TES) tariff.
As it is accepted worldwide that DC with thermal
storage is an excellent Demand Side Management
tool, DC providers should be provided with support
for front-loaded investments in DC systems. By
shifting considerable peak period power demand
to off-peak period, the electrical power distribution
system stands to gain. Power utility companies can
defer capital expenditure to meet ever increasing
peak load power demand.
Regulation of tariffs; whilst not to discourage
free market forces, should be sufficiently
regulated to ensure fairness and ensure
pricings reflect market conditions. This will avoid
misunderstanding of comparing actual cost of
cooling to the current prevailing use of slab floor
area rates. This will also protect the consumer
from unscrupulous DC concession holders from
unilaterally imposing unreasonable charges.
CONCLUSION
As the DC market in Malaysia continues to
grow, there is a genuine need for a regulatory
framework to further enhance DC services. In
the ASEAN region, only Malaysia and Singapore
have a significant DC industry. Whilst Singapore
has enacted the District Cooling Act in 2001 3;
Malaysia, although having a far larger number of
DC installations, has not done so till today.
A regulatory framework must not be used
primarily to regulate the tariff similar to the
telecommunication or electricity industries.