CRITICAL UTILITY. Cooling infrastructure is in greater demand as data centres and fabrication plants multiply | Photo Credit: Panupong Piewkleng

India’s cooling-related energy demand is expected to increase 15-fold from 90 TWh in 2016 to 1,350 TWh in 2050, according to the International Energy Agency.

The rise in the number of data centres, pharma and automotive manufacturing plants, and high-tech fabrication units is raising the status of cooling infrastructure to ‘critical utility’. However, what could slow the growth is energy wastage, often stemming from inefficient engineering and procurement practices.

Arjun Gupta, CEO of energy efficiency startup SmartJoules, blames this on industry’s reliance on “thumb rules” rather than operating data.

Cooling systems are traditionally designed based on anecdotal experience or simulations plagued by assumptions. As a result, the inefficiency persists throughout the building’s lifecycle.

Procuring right

Traditional procurement processes prioritise the lowest cost (L1) over long-term operational expenses. As energy accounts for nearly 70 per cent of a cooling system’s lifecycle cost, the “cheapest” equipment often proves to be the most expensive over time, Gupta says.

He adds that procurement departments are rarely empowered to buy sustainability; instead, they are incentivised to minimise immediate capital expenditure.

The cooling-as-a-service (CaaS) model shifts cooling from a capex-heavy investment to an operational expense (opex). Here, the service provider invests in high-efficiency technology and takes a share of the actual energy savings delivered over the long term.

Gupta explains that cooling is a dynamic process, requiring 200-300 machines working in concert across changing climatic conditions and occupancy levels.

He points out that legacy building automation systems mostly use fixed logic and require manual intervention. The evolutionary nature of the equipment is not taken into account.

To give an analogy, the car that gives you optimum mileage in year 3 will obviously not be as fuel-efficient in year 10. The same holds for cooling equipment.

But wouldn’t the client still make the same poor choice with CaaS, we ask Gupta. After all, the same lower-cost choice, design already frozen before the service provider enters the picture, not to mention the availability and quality of water needed as a coolant, could well queer the pitch for the provider.

Constant feedback and a design that allows equipment to change track accordingly are key features of his offerings, he says, adding, “Cooling systems should work like autonomous vehicles.”

Role of AI

Using AI to process real-time feedback, systems can learn and adjust parameters — such as water flow and motor speeds — without human prompts. This “brain” within the automation system allows for continuous optimisation, especially in sites where the provider has limited control over original designs.

Even after the design has been fixed and the equipment is running, “substantial savings are possible just from intelligent autonomous operations”, Gupta says.

He observes that while large competitors often rely on a distributed network of consultants and contractors, SmartJoules has an in-house approach to engineering, execution, and maintenance.

Leading players

On the size of the market, he says: “The biggest five contractors for HVAC (heating, ventilation, and air conditioning) in India would collectively be doing about ₹6,000 crore of EPC (engineering, procurement, and construction) business. EPC is only about 20 per cent of the lifecycle cost of cooling.” CaaS could be a ₹30,000 crore industry, he says.

The sector is filled with biggies. In October 2024, Tata Power announced an alliance with Singapore-based Keppel to launch its CaaS business in India, promising to cut energy use by 40 per cent and carbon emissions by 50 per cent” with district cooling systems. Singapore-based BECIS (Business Energy & Cooling Infrastructure Services) offers CaaS along with its HVAC and district cooling systems. Adani Energy Solutions also has a CaaS offering.

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Published on January 19, 2026