District Energy

What is district energy?

District energy is modern utility infrastructure that aggregates a community’s thermal energy demand and centralizes production and distribution.  Economy-of-scale creates alternatives, operational flexibility, and resiliency that may not be achievable on a building scale.  Connected customers contract for thermal energy as a service, displacing the cost, space, and complexity of generation in individual buildings.  With broad vision and favorable policy, integration of waste heat and renewable energy at a community scale becomes viable, contributing to the achievement of comprehensive goals.

District energy grid

Why should you consider district energy service?

As a developer or building owner, your core business is not energy production.  Tenants seek a fair price for sustainability and comfort, and they’re unlikely ever to look in the plant room.

In a district energy network, energy loads are aggregated and served from central utilities external to individual buildings.  This scale creates the opportunity to integrate waste heat, renewable energy, thermal storage and other technologies to deliver economic and environmental benefits.  District energy development, renewal, and growth may be financed in a variety of self-sustaining enterprise structures that ensure long-term operation as competitive, customer-oriented utilities.

District energy allows for carbon emission reduction, fuel flexibility, and distributed power, benefits that can be difficult to achieve in a single building. As renewable fuels and advanced technologies emerge, they can be introduced cost-effectively on a district scale.  The foundation for any district enterprise lies in strong customer contracts and well-placed capital to maintain competitive and sustainable service. District energy succeeds when community aspirations align with economic and environmental benefits for local stakeholders.


District Energy in Cities Report – A comprehensive best practices guide for district energy.  Produced by United Nations Environment Programme (UNEP) 2015.