What is District Energy?

This 2011 fact sheet explains district energy systems, which use central plants and underground pipes to provide efficient heating and cooling to clusters of buildings. It highlights the role of combined heat and power (CHP) and renewable energy in these systems, noting that while over 700 such systems exist in the U.S., high upfront costs and policy gaps remain barriers to further expansion.

• District energy systems provide a highly efficient method for heating and cooling multiple buildings in a specific area—such as military bases, airports, hospital or college campuses, and downtown districts—using a central plant and a network of underground pipes to distribute steam, chilled water, and/or hot water. This centralized approach reduces fuel consumption and eliminates the need for individual heating and cooling systems in every building.
• Thermal energy for these systems is sourced from various origins, including combined heat and power (CHP) plants (also known as cogeneration), which can exceed 80 percent energy efficiency. Other sources include renewable energy (such as solar thermal, biogas, hydrothermal, geothermal, and biomass), coal- or gas-fired boilers, and waste heat from industrial processes.
• In the United States, there are more than 700 district energy systems, with at least one present in every state. These systems offer economic and environmental benefits, including reduced operating costs, lower fuel imports, and decreased peak electrical demand in the late afternoon, which reduces grid strain and costs.
• Despite significant long-term environmental benefits and energy savings, the adoption of new district energy systems is hindered by high upfront infrastructure costs and difficulties in connecting CHP systems to the power grid. The document notes that federal energy policy has historically focused on transportation fuels and electricity, largely ignoring the role of thermal energy, which represents 47 percent of global final energy consumption and 37 percent in OECD countries as of May 2011.

APA

Environmental and Energy Study Institute (2011). What is District Energy? https://www.eesi.org/files/district_energy_factsheet_092311.pdf

Chicago

Environmental and Energy Study Institute. What is District Energy? 2011. https://www.eesi.org/files/district_energy_factsheet_092311.pdf.

Wikipedia

{{cite report |author=Environmental and Energy Study Institute |title=What is District Energy? |date=September 2011 |url=https://www.eesi.org/files/district_energy_factsheet_092311.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{environmentalandenergystudyinstitute2011what, author = {{Environmental and Energy Study Institute}}, title = {{What is District Energy?}}, institution = {Environmental and Energy Study Institute}, year = {2011}, month = sep, url = {https://www.eesi.org/files/district_energy_factsheet_092311.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }