According to a recent report by P&S Intelligence, the Saudi Arabia district cooling market is expected to experience substantial growth, reaching a market size of USD 2.59 billion by 2030, from USD 1.52 billion in 2024, at a compound annual growth rate (CAGR) of 9.4%.
The growth is primarily driven by rapid urbanization, large-scale infrastructure projects, and the increasing demand for energy-efficient solutions. A key factor propelling this expansion is Saudi Arabia’s Vision 2030 initiative, which aims to reduce reliance on oil by diversifying the economy and investing in sustainable infrastructure.
The market is benefitting from significant investments in commercial and residential developments, alongside a growing focus on carbon reduction and sustainability. Among the most prominent developments is the USD 500 billion NEOM project, a smart city designed to drive technological advancements across multiple sectors, including energy. Moreover, other key initiatives such as the Red Sea Project and the King Abdullah Financial District are contributing to increased demand for district cooling systems.
Additionally, the integration of renewable energy sources such as solar and wind is enhancing the efficiency of district cooling systems. With renewable energy set to meet 50% of the country’s power requirements by 2030, district cooling systems are increasingly being powered by solar and wind energy, significantly reducing the environmental footprint.
The commercial sector remains the largest end user, with electric chillers making up the majority of production. Electric chillers are favored due to their high efficiency and reliability, with a growing preference for energy-efficient systems.
Despite these promising developments, high initial investments required for the establishment of district cooling plants remain a challenge. However, with ongoing government support and the increasing focus on energy efficiency, the market is poised for long-term growth.
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