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What is District Energy?

How It Works 

District energy is an innovative energy solution that provides central heating and cooling services in an efficient, reliable, and cost-effective way. 

In district energy systems, thermal energy is produced at a centralized plant and distributed to buildings through underground networks of insulated piping. The centralized plants produce thermal energy in the form of steam or hot water for heating, and chilled water for cooling. They contain equipment such as boilers, chillers, cooling towers, and heat pumps.


Boilers can generate heat by burning natural gas or by using electrical resistance, while chillers provide cooling by using a mechanical compression cycle to extract heat from a water loop network. Cooling towers take the extracted heat from chillers and reject the heat to the atmosphere. Heat pumps can be utilized for both heating and cooling services. Heat pumps are similar to chillers in that they both contain a compressor, condenser, and evaporator, but they have a reversing valve to provide heating.  

When the chilled or hot water reaches customer buildings, water is transferred through heat exchangers to the hydronic loops. Once the water is pumped through the buildings and the customer takes the energy it requires, the water is returned to the central plant to be heated or cooled to the desired supply temperature. The water is then recirculated through the network to continuously provide heating and cooling services. Buildings connected to district energy systems do not need to own, operate, or maintain boilers, chillers, or cooling towers.

Central plants in district energy systems may also incorporate combined heat and power units which produce electricity, geothermal well fields, or thermal energy storage.


We are pleased to share this video produced by the International District Energy Association (IDEA), showcasing the important role district energy plays in a clean energy future by cutting carbon emissions and enhancing resiliency. District Energy Corporation is a proud member of IDEA.

To learn more about district energy, visit the:


Advantages of District Energy







  • Lower greenhouse gas emissions due to increased energy efficiency.

  • Reduce indoor and outdoor air pollution due to lower fossil fuel use.

  • Decrease global warming caused by refrigerants by removing the need for air conditioners and chillers in every building.

  • Greener solutions are utilized, such as geothermal well fields.



  • Energy efficiency is greater than conventional heating and cooling systems.

  • Steadier and more predictable combined loads.

  • Innovative technologies such as thermal ice storage and state-of-the art control systems that reduce electrical demand peaks are used.

  • Waste Reduction - customers only use the amount of heating and cooling energy they need.



  • Reliability factors of 99.99% are achieved by most district energy systems.

  • High-quality production, distribution, and control equipment used at central plants.

  • Uniform space heating and cooling.

  • Professional staff manages operations and equipment, helping ensure consistent service.

  • Outage reduction is achieved through the use of redundant equipment and backup power.



  • Lower costs for maintenance, operating, and labor.

  • Better control over load allows for lower electrical peak demands.

  • Space efficiency -the need for on-site chillers and boilers is eliminated, increasing usable customer building space.

  • More predictable energy costs - due to fuel source flexibility and the ability to lock in better long-term energy contracts.

  • Capital dollar savings - money that would otherwise be spent on infrastructure remains available.

  • Lower cost-of-service rates are typical with district energy.



  • Equipment upgrades are easier at a central plant.​

  • Customers are relieved of the burden to maintain boilers or chillers.

  • Expert advice by district energy providers on connection options, mechanical. interface, building performance optimization, and financing terms.

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