Chill out: how a new ‘cold economy’ could bring environmental benefits

The ability to keep things cold is a pillar of modern society – demand is booming worldwide to deliver air conditioning, data centre cooling and transport refrigeration, particularly in emerging economies. Although our cooling technologies are becoming increasingly sophisticated, they are also energy intensive.

The Intergovernmental Panel on Climate Change (IPCC) projects that, by the end of this century, air conditioning alone will consume almost half the electricity that we generate worldwide today.

Keeping things cold is highly polluting – cooling emits 7% of greenhouse gases (GHG), which is more than double aviation and shipping combined (3%) – and GHG emissions are projected to double by 2030. Large amounts of toxic nitrogen oxides (NOx) and particulate materials are also released, for example from the diesel engines powering transport refrigeration. And while we pollute, we are equally wasteful – the re-gasification of liquid natural gas (LNG) from its frozen state at import terminals wastes huge amounts of energy.

But what if we could recycle this wastage, simultaneously providing cold and power? Could this dramatically reduce the environmental impact and spiralling costs?


The global trade in LNG has increased significantly in recent years and is vital to the energy security of a growing number of countries. LNG is natural gas that has been refrigerated to -162°C to make it compact enough to transport by tanker, but this cold energy is normally discarded during the re-gasification process. Research suggests that recycling this waste cold could generate more than US$50 a tonne (£41) in economic and social benefits. With a projected global LNG trade of 500m tonnes, this new “waste recycling” market could be worth many billions per year by 2025.

New energy storage systems. Herriott-Watt University, Author provided

Economic modelling and case studies developed in Britain, Spain, Singapore and India suggest that in “developed economies”, LNG waste cold could form the foundations of an entirely new economy – the “cold economy”.

Energy would be stored and moved as cold rather than converted into electricity and then converted again to provide cooling. The cold economy is less about individual clean cold technologies – although these are vital – and more about the efficient integration of cooling with waste and renewable resources, and with the wider energy system.

The cold economy approach is powerful because it recognises that there is no demand for cold in itself – but massive demand for services that depend on it. For the first time we are asking ourselves what energy services we require and how we can provide them in the least damaging ways, rather than merely how much electricity we need to generate.

If the service required is cooling, current approaches such as burning diesel, which produces power and heat, or electric-powered air conditioners that expel heat into their immediate environment, are sub-optimal.

Only 23 of the 111 LNG import terminals worldwide currently attempt any form of cold recovery and this is usually limited to the industrial plants close to the terminals themselves and at times when LNG is being re-gasified. The amount recycled could be raised by converting it into novel types of energy that store and transport it for use on demand, such as liquid air or liquid nitrogen. Recycling waste cold in this way would produce cheap, low-carbon, zero-emission cryogenic “fuel”.

Commercialising cold

The use of LNG waste cold makes the air liquefaction process highly energy efficient and cost effective, harnessing otherwise waste packaging. The liquid nitrogen can then be stored and transported to provide cold and power on demand in buildings and vehicles or electricity to the grid. Liquid nitrogen expands 700 times when re-gasified, which can be used to drive an engine. It also exhausts loads of “cold” as it reheats from -196 to ambient which can be used to provide cooling or refrigeration.

Britain is currently developing two main energy technologies that could exploit large amounts of LNG waste cold: liquid air energy storage (LAES), which provides large-scale electricity storage for balancing the electricity grid, and cryogenic expansion engines (CEE) that are driven by liquid air or nitrogen delivering both cold and power.

Liquid air energy storage (LAES) Highview Power Storage, Author provided

Due to the current grid regulations in the Britain and elsewhere – UK for example only included storage as a specific category in the capacity market for the first time in 2016 – the business case for new investment in large-scale energy storage, such as LAES, is only now starting to develop.

The first application of a CEE system is a zero-emission transport refrigeration unit to displace the highly polluting secondary diesel engines used on trucks and trailers today. It is now in commercial trials with supermarket Sainsbury’s. Other applications in development with UK grant funding (APC, Innovate and Newton Fund) include a back-up electricity and cooling generator for data and food distribution centres and a “heat hybrid” engine for trucks and buses that could reduce diesel consumption by over 25%.

It is estimated that projected global trade of 500m tonnes a year of LNG in 2025 could produce enough liquid air to cool almost 4m fleet-average refrigerated trucks – equal to the entire size of the global transport refrigeration fleet today.

While waste cold of LNG re-gasification is a huge resource, there are also significant barriers to overcome: air liquefiers are capital intensive, plant operators are naturally risk averse – and any such project would require an entirely new business model. Barriers aside, modelling shows that recycling LNG waste cold as distributed cold and power would be profitable once demonstrated and produce significant and measurable environmental benefits.

Given the urgency to meet global cooling demand growth, there is a clear need for government, industry and research institutes to convene global working groups to accelerate delivery of the cold economy with an in-depth feasibility study. This will maximise the business case through a detailed analysis of the economic, environmental, and energy resilience aspects of this approach, comparing its costs and benefits with alternative strategies for green cooling.