| Study Period | 2019 - 2030 |
| 2024 Market Size | USD 1,515.0 Million |
| 2025 Market Size | USD 1,646.8 Million |
| 2030 Forecast | USD 2,585.3 Million |
| Growth Rate (CAGR) | 9.4% |
| Largest Province | Al-Riyadh |
| Fastest Growing Province | Al-Riyadh |
| Nature of the Market | Fragmented |
| Largest End User Category | Commercial |
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The Saudi Arabian district cooling market revenue stands at USD 1,515.0 million in 2024, which is expected to reach USD 2,585.3 million by 2030 at a CAGR of 9.4% during the forecast period (2025–2030).
The biggest drivers for the market are rapid urbanisation, initiation of mega infrastructure projects, rising demand for energy efficiency, expanding network of data centres, hot desert climate of the country, increasing focus on carbon reduction and sustainability, and cost-savings provided by district heating and cooling (DHC) systems. The market is also positively influenced by the growing commercial construction, large number of smart city projects, surging private and public sector investments, increasing efforts to obtain green building certifications, expanding hospitality & tourism sector, rapid industrialisation and government initiatives for economic diversification.
The government’s Saudi Vision 2030 is the quintessential factor driving the market in the country as it focusses on reducing the reliance on oil & gas by developing infrastructure in other sectors. As construction projects mount, the demand for electricity will increase. Almost 70% of the electricity in the summer months goes into cooling due to the hot weather in the entire Middle Eastern region. This is propelling the demand for an energy-efficient cooling solution that can cater to multiple buildings and large areas at once.
As it must cater to huge spaces and multiple built units, district cooling is an energy-intensive technology. Moreover, even though fossil fuels are easily available in the kingdom, the government is trying to shift away from them towards cleaner sources of electricity.
The government targets the installation of 150 Gigawatts (GW) of renewable energy capacity by 2030, aiming to reduce greenhouse gas emissions by 278 million tonnes each year. Under the targets, 40 GW of wind capacity and 58.7 GW of solar capacity is to be commissioned by the end of this decade. Since cooling is one of the most energy-intensive application in the country, feeding energy generated from these sources to DHC systems enable a considerable emission reduction.
District cooling systems in the kingdom are being further being enhanced by integrating them with thermal energy storage. This technology collects electricity during off-peak hours to power a and releases the cooling energy when the demand is high, primarily during the day. By using the electricity stored during off-peak durations, the load on power plants during peak demand periods reduces significantly.
TES-integrated DHC has already been commissioned at the under-development Red Sea Project. Chillers are powered by solar energy at night; therefore, they produce more cooling energy than needed. This energy is stored in a massive TES and released whenever demand rises.
The Saudi Arabian district cooling market is primarily driven by the large scale of infrastructure development across the residential, commercial and industrial sectors. As per reports, USD 1.5 trillion worth of construction projects are either underway or planned in the kingdom. The biggest among them is the USD 500-billion NEOM, a smart city being constructed on 26,500 square kilometres of land.
Other mega projects under various stages of execution are The Red Sea Project, Diriyah Gate, King Abdullah Financial District, and Qiddiya, all part of the Vision 2030. These projects will comprise thousands of industrial, commercial and residential premises, all of which will require year-round space and process cooling.
For instance, the King Salman Park Foundation contracted Saudi Tabreed to set up a district cooling plant at the park with a capacity of 60,000 thousand tonnes of refrigeration (TR). Similarly, a 21,000-TR district cooling plant is to come up in Medina, for which City Cool, ADC Energy Systems and Johnson Controls Arabia have been contracted. In all, the Saudi government targets a 3-million-TR capacity by 2030.
The high capital required to set up DHC plants could pose challenges in the growth of the market. Such infrastructure is composed of several heavy-duty, high-capacity systems, such as centralised cooling units, long insulated pipelines (often laid underground), massive heat exchangers and high-output compressors.
Moreover, to achieve the maximum cooling and energy efficiency, these systems must be integrated with a range of sensors that communicate real-time data to building management systems. This is why district cooling plants can only be set up at the administrative level, with the initiation and financial support of municipal councils in major cities, provincial governments and the crown. Land acquisition and development are another problem, apart from the fact that these plants are unviable for individual buildings.
The following production techniques have been analysed:
The report offers analysis on the following end users:
Here are the services studied during the study:
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The following provinces are part of the scope:
The Saudi Arabian district cooling market is fragmented primarily due to the requirement for different services and the varying scale of projects. Most players in the market are regional companies, along with a few established globally operating ones. Additionally, providing pre-installation, installation & commissioning, operations & maintenance, retrofitting, energy management and support services is technically less challenging than developing and manufacturing the systems. This lowers the entry barriers, allowing many new real estate and infrastructure services companies to enter the market.
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