According to the latest market research study published by P&S Intelligence, the Saudi Arabian district cooling market reached USD 1,515 million in 2024 and is forecast to expand to USD 2,585.3 million by 2030, representing a robust compound annual growth rate (CAGR) of 9.4% from 2025 to 2030.
This impressive growth is fueled by increased urbanisation,
a succession of mega infrastructure projects such as NEOM, Red Sea Project,
Diriyah Gate, and a heightened emphasis on energy‑efficient solutions amid
Saudi Vision 2030. The market is also driven by the Kingdom’s scorching desert
climate—where approximately 70% of electricity during summer is devoted to
cooling—and a growing commitment to carbon reduction, sustainability efforts,
and green building standards.
In 2024, the market was fragmented and led by the commercial
end‑user segment, capitalising on the rapid expansion of hospitality, retail,
hospitals, and educational institutions. Government regulations promoting
renewable energy integration and carbon‑efficient heating, ventilation, and air
conditioning (HVAC) infrastructure are further accelerating demand. Moreover,
the rise of data‑centre infrastructures and energy‑focused initiatives such as
thermal energy storage systems are enhancing system efficiency and reliability.
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Key Insights
- The
market is segmented by production techniques: free cooling, adsorption
cooling, and electric chillers. Electric chillers dominate with a 49%
market share in 2024 and are projected to remain the fastest-growing
category, driven by their reliability, efficiency, and compatibility with
a cleaner electricity grid.
- The
commercial sector leads in usage, powering large-scale cooling in hotels,
malls, educational institutions, and hospitals—especially in pilgrimage
hubs like Mecca and Medina, which witnessed a 58% rise in tourist arrivals
in 2023 compared to 2019.
- Residential
district cooling is on a swift growth trajectory, with a notable CAGR of
10.9%, due to the emergence of large residential clusters and smart cities
opting for centralized cooling systems that outperform individual AC units.
- Service
segmentation reveals that operations & maintenance (O&M) services
held the largest share in 2024 (USD 607.4 million). Energy management
services are the fastest expanding, as energy audits, demand-side
management, and smart grid integration become critical for green building
certification.
- Geographically,
the Al‑Riyadh province is both the largest and fastest-growing district
cooling market, driven by major developments like King Salman Park, Riyadh
Metro, KAFD, and Qiddiya. Additional provinces covered include Makkah,
Al-Madinah, Eastern Region, and several others across the Kingdom.
- Baselining
smart-city infrastructure, the Kingdom is integrating renewable energy
capacity—40 GW wind and 58.7 GW solar by 2030—to power district cooling
systems, such as the TES-integrated systems at the Red Sea Project. This
aligns with major carbon reduction goals of 278 million tonnes annually.
- Despite
strong momentum, high initial capital costs for plant setup—skilled
labour, insulated piping, thermal energy storage, sensors, and
controls—pose entry barriers. Projects typically require municipal or
crown-level initiatives.
- The
market is fragmented with both regional and global players, including ADC
Energy Systems, Johnson Controls Arabia, Tabreed, City Cool, Takeef,
ENGIE, Veolia, Danfoss, Marafiq, ARANER, Stellar Energy, and AtkinsRéalis.
