A faster path to net zero is right at our feet

Some have said it’s “the third wave of urban energy.” Others say this novel energy innovation is how many visionary cities and countries have so rapidly decarbonized heating and cooling systems to meet more stringent efficiency, renewable energy, and CO2 targets.

By Rob Thornton, President & CEO of International District Energy Association

Surprisingly, what Fernando Carou, manager of renewable energy and net zero development for the city of Toronto, calls the “third wave” of urban energy and the United Nations (UN) heralds as “visionary” isn’t new at all.

It’s district energy.

District energy, which the UN says can “connect renewables, waste heat, thermal storage, power grids, thermal grids, and heat pumps—delivering up to 50% less primary energy consumption for heating and cooling,” has been hiding in plain “site” for more than 100 years.

In large and small sites around the world, district energy is so embedded and accepted that it has been largely overlooked. Given its massive potential to accelerate the global pursuit of net zero goals, however, it’s time for district energy to move back into the spotlight.

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The case for district energy

The concept is simple: efficiently heat and cool many buildings across a city, campus, airport, or other defined area from a central plant. That primary plant feeds an underground network of pipes that distribute steam, hot water, and/or chilled water to multiple buildings, providing economies of scale for lower total energy consumption while reducing the total square footage dedicated to heating and cooling. It’s a highly efficient, one-to-many-model. That’s district energy.

Were district energy to just do what it’s done for more than 140 years – more efficiently heat and cool multiple buildings – it would still be one of the world’s smartest solutions for energy conservation.

There’s more to the district energy story, however: As echoed in the above comments from Toronto’s Fernando Carou and UN Environment, greater awareness about the underappreciated benefits of district energy will put us on a much faster path to achieving net zero goals at an urban scale.

District energy is a highly flexible approach, not a single energy source, and this is one of its greatest strengths for modern energy conservation and net carbon reduction.

While many of today’s district energy systems operate using natural gas – having moved away from coal and oil years ago, many increasingly use locally-generated renewable energy or harvest surplus heat from nearby sources as part of a circular economy. 

And this means district energy systems have greater and greater efficiency and net zero reduction potential over time, not less. This is a significant, but often overlooked benefit of this longstanding approach.  Aggregating the thermal energy and power needs at the community or district scale facilitates investment in lower-carbon solutions that may not be feasible for a single building. 

To put this in perspective, in its recent report, “Technology and innovation pathways for zero-carbon-ready buildings by 2030,” the International Energy Agency calls for 350 million building units connected to district energy networks by 2030.

If we can indeed approach this level of district energy adoption, there is a historic opportunity to quicken the pace of net zero reductions: connecting to the one-to-many district energy model also means that each of those units is now part of dynamic, high potential energy conservation network.

Reducing stress on the grid

This year news of the hottest June on record was quickly eclipsed by the declaration of Earth’s hottest day. That record would then soon be broken 16 more times before the end of July, which registered as Earth’s hottest month. Additionally, power outages in the US increased 64% in the last 10 years due to extreme weather events. As extreme weather becomes more prevalent, more localized energy solutions need to be strengthened and more resilient.

District energy minimizes business interruptions and maintains thermal comfort in connected buildings even during the most extreme conditions. For example, beneath the downtown streets of sidewalks in Austin, Texas is a network of more than eight miles of supply and return piping that cools more than 18 million square feet of downtown buildings. This is the Downtown District Cooling System operated by Austin Energy.

Austin Energy offers district cooling, thermal energy storage, and distributed generation services as alternatives to traditional air conditioning and power generation. Maximizing demand response participation, Austin Energy makes and stores ice or cold water during the night, when electric costs are lower. By avoiding operation of large chillers and condensers on hot afternoons – an increasingly common occurrence, Austin Energy reduces electric loads across its power delivery system during times of highest electricity demand, shifting 15MW per hour from the electrical grid for about 3.5 hours each day.

Plus, the Downtown District Cooling System is highly reliable. For both 2021 and 2022, the system achieved 100% availability and reliability, even during extreme weather conditions. Austin Energy district cooling customers were unaffected by major winter storms in February 2021 and February 2023, with zero loss of service or equipment damage. The public benefit from cost savings, reliability and conservation potential is significant.

Austin is a major high-tech hub and will likely see continued commercial and residential growth in the coming decades. District energy, including district cooling and combined cooling, heat, and power plants, continuously operate as reliable, cost-beneficial alternatives to traditional sources of energy and cooling. Equally important is the ability to do this in the one-to-many fashion.

Austin Energy’s studies of total lifecycle costs show that individual building-owner investments to construct, operate, maintain, repair, and, eventually, replace stand-alone systems would far exceed the life cycle costs they now incur as customers of a flexible and constantly innovating district energy system.

Leveraging a wide range of emerging fuel sources

From solar thermal, to solar and wind power, lake, river or ocean water; surplus heat from industry or data centres, and deep geothermal or geo-exchange from shallower boreholes, district energy systems can adapt to utilize the lowest-carbon sources to power its systems, making it a very versatile way to decarbonize and deliver heating and cooling to communities, clusters and cities. Integration of small modular reactors also has the potential to leverage nuclear power and heat at a district scale.

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The National Western Centre (NWC) complex outside Denver, Colorado is now the largest sewer-heat recovery system in North America and the nation’s largest wastewater energy district. NWC captures heat from existing sewer pipes to provide the 250-acre NWC complex with a truly sustainable form of heating and cooling. Used water that travels through shower drains, sinks, dishwashers and washing machines maintains a relatively constant temperature. 

The low-grade heat is tapped and gathered for a large scale heat pump which captures and leverages the warmth of wastewater as useful thermal energy, and subsequently uses it to heat or cool clean water distributed throughout the complex through a network of district energy pipes.

The innovative sewer heat recovery system has more than 12MW of heating and cooling capacity and can source nearly 90% of the heating and cooling needs of the National Western Center community this way, avoiding reliance on fossil fuels. This enables a carbon footprint reduction of 70% - avoiding emissions of an estimated 2,600 metric tons of carbon per year, the emissions equivalent of driving a car 6.6 million miles.

The NWC sewer heat recovery system also provides other environmental benefits for the surrounding Denver area. The district energy system delivers lower-temperature wastewater back to Denver’s Metro Water Recovery treatment facility, enabling the facility to return cooler effluent to the river, closer to the river’s ambient temperature, which helps protect fragile fish and enhance aquatic ecosystems.

District energy’s new moment

District energy isn’t new, but there is new potential that is still largely untapped globally.

Across most of the world, district energy continues to deliver a range of social, sustainability, environmental, and economic benefits by providing reliable, efficient, affordable, and clean thermal energy from locally controlled and highly efficient central plants.

These benefits, while significant, only tell part of the story. As carbon reduction initiatives and greater reliance on renewable fuel sources accelerate on parallel tracks – and necessarily so – district energy is certainly ready for its most important moment yet.

District energy is built on a foundation of flexibility and offers a faster path to net zero and greater energy efficiency and resilience at a community scale. Think of district energy as grasping a whole bunch of bananas at the stalk rather than a single banana. 

District energy isn’t biased toward a single fuel source, and it’s uniquely designed to adapt to local renewable energy sources, from geothermal and solar to biomass and wind. As these new energy sources become more readily, affordably, and reliably available across communities, a proven one-to-many infrastructure approach already exists to scale it widely.

We needn’t wait to retrofit millions of buildings one at a time – if that were even financially feasible: these millions of buildings are already connected to an extensible energy innovation. That innovation is district energy.

Listen to the latest episode of the Energy Transitions Podcast to learn more about the innovative technologies making an impact to decarbonise the heating space. Dr Andrej Jentsch, Programme Manager of the IEA Technology Collaboration Programme on District Heating and Cooling, talks about the progress made and what more needs to be done to meet our net zero goals.