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in coastal areas like Mumbai, the ambient and wet-bulb temperatures are continuously high, and this data is crucial in evaluating the working of water-cooled air-conditioning systems, which are installed in commercial and residential homes. The cooling tower outlet water temperature exceeding the coolant specifications during the hottest days leads to higher compressor lift and greater electrical power usage in the water-cooled chillers [1, 2]. It uses a shell-and-tube heat exchanger composed of a phase change material (PCM) to contact the cooling tower water line in front of the condenser of an 850 TR water-cooled chiller, which uses R134a refrigerant. The system allows the condenser inlet water temperature to be lowered by some 2°C during peak loads and, consequently, the refrigerant condensing temperature and compressor work. Those PCMs have been selected as calcium chloride hexahydrate (CaCl₂·6H₂O) since it melts at approximately 29°C, and the amount of heat it stores (190 kJ/kg) is appropriate based on the weather condition and the temperature in the cooling tower in Mumbai. The environment considered in this paper is the wet-bulb temperature of Mumbai [7]. The thermodynamic study of the vapor compression refrigeration cycle shows that lowering the temperature of the water entering the condenser by 2°C will noticeably decrease the power needed by the compressor during the hottest part of the day. During high ambient conditions, the peak demand is reduced by temporarily absorbing part of the heat load from the condenser into the PCM. At nighttime, the refrigeration cycle is switched off, and the cooling tower water loop only runs to regenerate (re-solidify) the PCM. The cooled water is recirculated back to the condenser, where it removes heat from the refrigerant through the condenser tubes. The extra thermal loading on the cooling tower under regeneration is relatively small compared to its capacity and has a minor impact on the stability of the system. The offered structure will enable shifting peak loads to nighttime-regulated operation without incurring significant auxiliary energy taxes. The results show that using PCM to cool water at the cooling tower during controlled nighttime regeneration can effectively reduce peak demand and help manage energy use in large water-cooled chiller systems in hot and humid coastal weather.