District energy systems (or co-generation plants) produce steam, hot water or chilled water at a central plant which is distributed to individual buildings within a defined district.
Benefits & Problems Addressed
Cost savings: Because there is a central boiler/cooler, buildings need not have individual HVAC systems. These systems can be more cost efficient, especially when renewable sources such as solar energy included as a source. Building owners can rededicate space use for mechanicals to other uses.
Energy efficiency: Power is ready-to-use with less loss through distribution. District energy systems can use "reject heat" to produce electricity or cycle back through the system.
Transition to new fuel sources: As new generation sources & storage (batteries) come on line, transition is more readily achieved by one central plant than numerous buildings.
Synergy with other systems: District-wide infrastructure plans can support shared water & wastewater systems, composting, and transportation.
Resilience: Because of the smaller, underground-connected systems with dedicated back-up, district systems can recover after a storm or service interruption faster than conventional gridded service.
Tips & Techniques
Terms: District Energy is heating, and/or cooling production & distribution for multiple buildings in a district. A district may employ combined heating & power (CHP) or co-generation to use "reject heat" produced during generation or heating for other heating/cooling purposes (a.k.a. waste heat recovery). A micro-grid is a small electricity distribution system constructed for use in the energy district.
Candidate districts: Private campuses with multiple buildings under one ownership or management structure such as universities or medical campuses are typical first adopters. Cities adopting small area & Eco-District planning include district energy. For incremental adoption, several buildings will share a heating and distribution system, later expanding buildings, energy sources, storage & distribution.
Regulatory framework: Utility companies often have sole responsibility for generating and delivering electricity & natural gas. Establishing a district may require state action. Once established, cities need a holistic regulatory update that considers public utilities, underground utilities rules, right-of-way responsibility & management, emergency response.
Local government role: Local governments may need to influence state & utility regulators. Cities may need to change comprehensive plans & zoning codes to allow shared-uses & compact development that support district utilities. Cities can dedicate land & rights of way for energy plants & distribution. Cities can use mapping and data to identify & plan energy districts. Cities can use their own facilities to jump start a district.
Financial support: Cities can include debt provision & bond financing, loan guarantees & underwriting, access to senior-level grants/loans, revolving funds, city-level subsidies and land-value capture strategies.
Hot Buttons: Electric utilities may view energy districts as competition. Back-up power is a sensitive topic, in particular for medical facilities. Energy districts typically strive for ambitious targets for cost/energy reduction.
District Energy in Cities: United National Environment Program