Global District Cooling Market To Grow At A CAGR Of 7.91% During The Forecast Period

05-Jun-2023 | Zion Market Research

The global district cooling market size was worth around USD 26.9 billion in 2022 and is predicted to grow to around USD 45.84 billion by 2030 with a compound annual growth rate (CAGR) of roughly 7.91% between 2023 and 2030.


The district cooling industry refers to the market including designers, producers, and providers of a centralized cooling system that provides chilled water to multiple buildings or developments within a specific district or region. These systems replace the need for individual cooling units in buildings with a more efficient and centralized infrastructure that includes a central plant, distribution network, and connected buildings.

In the district cooling system, chilled water produced at one specific center is circulated or distributed to other units with the aid of a network of underground pipes. The water thus received can be used to cool indoor spaces. This is typically achieved using heat exchangers or coils. Once the task is complete, the water is returned to the central plant for re-cooling and hence, can be considered a more sustainable method for cooling an entire building or complex.

This review is based on a report by Zion Market Research, titled "District Cooling Market By End-Users (Residential, Industrial, And Commercial), By Production Technique (Absorption Cooling, Free Cooling, And Electric Chillers), And By Region - Global And Regional Industry Overview, Market Intelligence, Comprehensive Analysis, Historical Data, And Forecasts 2023 – 2030"- Report at

The global district cooling market is projected to grow owing to several factors with the primary reason being the growing demand for sustainable and long-term solutions especially in activities that heavily rely on energy.

Furthermore, with the rising rate of urbanization and commercialization along with rampant infrastructure development projects, the need for energy to cool down occupied spaces has surged at a rapid rate.

This has resulted in many stakeholders seeking an effective solution that reduces dependency on non-renewable sources of energy for power generation. With the growing rate of new building construction, the industry can expect heavy requirements.

Additionally, the shifting focus toward environmental sustainability and growing concerns over climate change has resulted in more emphasis on green solutions. District cooling systems perfectly align with this goal since it reduces carbon emission and promotes the use of renewable energy sources.

District cooling systems can offer excellent cost-saving benefits when used optimally. The operation and maintenance costs of centralized cooling systems are relatively lower than the cost of individual cooling units.

However, the district cooling industry may come across certain growth restrictions mainly due to geographical constraints. District cooling systems rely heavily on an efficient network of underground pipes or ducts.

However, geographical factors such as rocky terrain, high water tables, or densely built-up areas may raise concerns over the feasibility of deploying such a network, and overcoming these challenges could increase the overall associated cost.

Moreover, the industry is also plagued with a longer payback period as it may take several years to achieve breakeven in terms of initial investment. Other factors such as high dependence on one or a centralized plant along with regulatory barriers could cause a loss of revenue.

The growing infrastructure projects may provide growth opportunities while limited familiarity may challenge market growth.

The global district cooling market is segmented based on end-users, production techniques, and region.

Based on end-users, the global market segments are residential, industrial, and commercial. The highest growth was observed in the commercial segment in 2022 and is expected to continue the same trend during the forecast period. It includes units such as office buildings, retail spaces, hotels, and other commercial establishments.

Commercial centers have high energy requirements due to high occupancy rates, large occupied spaces, and the need to maintain a comfortable indoor space for customers and employees. District cooling service providers generally target the commercial segment since they provide the former with a concentrated demand and showcase high potential economies of scale.

However, residential buildings can also benefit from these systems since district cooling provides centralized cooling services to multiple residential units. In 2019, the average monthly energy consumption in commercial units in the US was around 6,066 kWh.

Based on technique, the global industry is segmented into absorption cooling, free cooling, and electric chillers. The district cooling industry was led by the electric chillers segment in 2022. This method includes the use of mechanical compression and refrigerants to cool the air or water which is to be distributed throughout the district. The main reasons for the wide adoption of electric chillers are reliability, efficiency, and ease of operation.

They are available in different types including air-cooled or water-cooled chillers and also provide a wide range of capacities to meet the needs of different clients. Absorption cooling systems also generated significant revenue in 2022. They use heat energy generated from low-grade heat sources to drive the cooling process. The average temperature of chilled water in this system is between 6 to 8 Degree Celsius.

The global district cooling market is expected to be led by the Middle East during the forecast period. The presence of a well-established network of district cooling along with benefits associated with early adoption could be the driving factors for regional growth. Additionally, the growing number of players and their entry into new and emerging markets such as India and neighboring nations could result in higher revenue.

The CAGR rate in the Middle East and Africa region may stand at 8.21% as the area is characterized by an extremely hot climate and higher temperatures which may go as high as 50 degrees during the summer season. To tackle the impact of a harsh environment while keeping in view environmental sustainability, the regional governments and private players have undertaken several projects including the district cooling process. Asia-Pacific is also projected to register a steady CAGR with an increasing shift toward infrastructure development projects.

The global district cooling market is led by players like

  • Tabreed
  • Engie
  • Veolia
  • Empower
  • Emicool
  • Emirates Central Cooling Systems Corporation (EMPOWER)
  • Shinryo Corporation
  • Ramboll Group
  • Fortum
  • Keppel Corporation
  • Dalkia
  • Danfoss
  • Stellar Energy
  • National Central Cooling Company (Tabreed)
  • Singapore District Cooling
  • Qatar District Cooling Company (Qatar Cool)
  • Empower Energy Solutions
  • Singapore Power Group
  • Marafeq Qatar
  • Logstor
  • ADC Energy Systems
  • Goteborg Energi
  • Orascom Construction
  • DC Pro Engineering
  • and SNC-Lavalin.

Recent Developments:

  • In June 2022, MENA District Cooling Projects Conference witnessed the announcement of a new set of regulations governing district cooling in the region. The reformed regulation aims to reduce excessive billing
  • In January 2023, UAE and the Cool Coalition by the United Nations Environment Programme (UNEO) launched the ‘Cool COP Menu or Actions’ and Global Cooling Pledge. This announcement was made ahead of the upcoming Climate Change Conference with UAE acting as the President of the meet

The global district cooling market is segmented as follows:

By End-Users

  • Residential
  • Industrial
  • Commercial

By Production Technique

  • Absorption Cooling
  • Free Cooling
  • Electric Chillers

By Region

  • North America
    • The U.S.
    • Canada
  • Europe
    • France
    • The UK
    • Spain
    • Germany
    • Italy
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Southeast Asia
    • Rest of Asia Pacific
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America
  • Middle East & Africa
    • GCC
    • South Africa
    • Rest of The Middle East & Africa

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