Source: DBDH, 2008

District heating

District heating is a system that delivers space heating and hot water to multiple customers through a pipe network. The heat can be produced at a central plant or at multiple locations, using different fuels, including renewable energy and waste heat. By replacing individual heating generation equipment in each building, the district heating system can deliver economies of scale in terms of capital, energy and maintenance costs.  

District heating systems are based on well-proven technologies which have been implemented for decades. Simultaneously it offers an opportunity for a ground-breaking integrated systems-approach which contributes to reliability and affordability of heat and optimizes energy efficiency and the use of local renewable energy resources. The development of energy-efficient district energy systems in cities can be one of the least-cost and most effective solutions for reducing greenhouse gas emissions and primary energy demand.

Local governments are uniquely positioned to advance district energy systems in their various capacities: as planners and regulators, as facilitators of finance, as role models and advocates, and as large consumers of energy and providers of infrastructure and services.

The current Solutions Package aims to support local governments in taking an integrated systems-approach which contributes to reliability and affordability of district heating and to optimize energy efficiency and the use of local energy resources. Considering that cities have different district energy needs and resources, have particular urban development circumstances and can be in an initial or more advanced stage of development of district energy systems, this Package integrates several complementary Solutions to address the necessary specificities in terms of framework, market development, heat demand and local availability of energy resources, implementation process, and finance.

 Video: District Energy, key to achieving low-carbon communities, developed by IDEA in partnership with UN Environment and ICLEI

Motivation / Relevance

Space heating and cooling as well as hot water are estimated to account for roughly half of global energy consumption in buildings (IEA, 2011a) [1].

For many cities, modern district energy systems - i.e., energy-efficient, climate resilient and affordable – are one of the least-cost and most-effective solutions in reducing emissions and primary energy demand. A transition to such systems, combined with energy efficiency measures, could contribute as much as 58% of the carbon dioxide (CO2) emission reductions required in the energy sector by 2050 to keep global temperature rise to within 2–3 degrees Celsius (UNEP, 2015) [1]. The advantages of modern district energy systems include:

  • recovery and distribution to end-users of surplus, low-grade heat;
  • reduction in electricity consumption and primary energy use by fuel switching and aggregating heating demand;
  • integration and balancing of high shares of variable renewable power and heating, particularly through relatively inexpensive thermal storage; and
  • realization of economies of scale in renewable heating production.

District heating can cost half as much as equivalent alternative technologies given certain market conditions and an appropriate density of demand (UNEP, 2015) [1].

In a survey which targeted cities, industry and finance experts worldwide, local governments were ranked as the “most important” actor in catalyzing investment in district energy systems, playing a central role in addressing the associated risks and costs (UNEP, 2015) [1]. The majority of business models for district energy involve the public sector.


Figure 1 – District heating network simplified diagram

Source: ICLEI and UN Environment in [16]



Figure 2 – Energy transfer station: interface between building energy system and the district heating network - simplified diagram. Source: ICLEI and UN Environment in [16]



Figure 3 – Modern district energy systems

Source: UNEP, 2015 [1]



Main impacts

  • Air quality improvement and associated public health impacts
  • More reliable energy supply
  • Energy security and reduced fossil fuels imports
  • Reduced socio-economic impacts of fossil fuels’ price volatility
  • Reduced fuel poverty
  • Local wealth retention and economic development through the use of locally available energy resources
  • ”Future-proofed” network (allows easy adoption of renewable energy and new technologies without the need to install equipment in each building)
  • Greening of local economy
  • Increased resilience to natural and technological disasters and catastrophes
  • Climate change mitigation 

Benefits and Co-Benefits

  • Reduction of air pollution associated with burning of fossil fuels, such as sulphur dioxide (SO2), nitrogen oxides (NOx) and particulates
  • Energy efficiency improvement and reduction of fossil fuels consumption
  • Use of local renewable resources, including utilization of excess renewable electricity during over supply
  • Opportunity to generate income for the local government, including from waste-to-energy solutions, to fund pursuit of wider objectives
  • Lower costs of the energy system and other urban utilities due to synergies, increased efficiency and economies of scale
  • Lower strain on the power grid and reduce black-outs
  • Postponing of the need to investment in additional capacity of the power grid to satisfy peak demand
  • Green local jobs
  • Affordable energy, consumer protection against price volatility and ability for local government to adopt measures targeting end-users experiencing fuel poverty
  • Greenhouse gas (GHG) emissions reductions
  • Substantial contribution to meeting city-wide GHG reduction targets
  • Decreased heat loss into the atmosphere, minimizing the urban heat-island effect
  • End-users directly benefit from:
    • Reduction of pollution produced in the home or building
    • Improved safety as boilers, gas supply, etc. are kept out of the building
    • Potential for additional income from building-level renewable hot water production through net metering
    • Space savings from not having individual thermal energy production (e.g., freeing up of office space)


Low hanging fruit
  • Efficient Energy Production through Cogeneration and Trigeneration

    Combined Heat and Power (CHP) generation is much more efficient than separate power and heat generation. Combining cogeneration with chillers in the same process to form trigeneration systems. This Solution looks at the framework conditions and determinants that are relevant for / trigeneration cogeneration project viability and implementation. It also looks at the relevance of district cooling in complementing and strengthening the business model for district heating. Learn More...

  • Interconnected systems towards 100% renewable district heating & cooling

    This Solution provides guidance on the integration of renewable energy sources in district energy production, both in new systems and in already existing ones, and can be of interest to both established and growing cities. It also zooms in on technical aspects such as specificities of different renewable energy sources (e.g.: biomass, solar thermal energy, waste heat from waste water, biogas or geothermal energy), thermal storage, lower operating temperatures, complementing district heating and cooling, and integration with the electricity grid. Learn More...

  • District energy supply with surplus or waste heat

    This Solution supports local governments in encouraging and enhancing use of surplus or waste heat as energy source for the district heating and/or cooling networks in their jurisdiction.. (Forthcoming)


Additional Information




This Solution was jointly developed and peer-reviewed by ICLEI and the Global District Energy in Cities Initiative (DES Initiative) , which is coordinated by the United Nations Environment.

ICLEI acknowledges and recognizes all individual organizations and experts that kindly contributed their time and expertise to this Solution - for details please see the "Developer" section above and the "Supporters" webpage.

This Solution draws significantly upon the UN Environment publication: District Energy in Cities. For more information on the Global District Energy in Cities Initiative (DES Initiative) and to become a partner or learning city, please visit:

This initiative is the implementing mechanism for the SEforALL District Energy Accelerator.