Heating, cooling and hot water represent 60% of the energy demand in buildings worldwide. There is an urgent need to reduce demand and shift to sources that are consistent with our global climate and energy ambitions. Reducing the energy demand for heating and cooling through building and appliance efficiency improvements will be crucial to achieving decarbonisation. However, even with demand-side reductions in buildings, cities will still have significant demands for heating and cooling from the buildings sector and other sectors, which will need to be supplied from efficient, low-carbon sources.

Many cities are prioritizing modern district energy as the integrated solution needed for sustainable heating and cooling. In Quito last year,197 nations adopted a New Urban Agenda that recognizes ‘modern district energy’ networks as a key solution to integrating renewables and efficiency in cities.

District energy systems can reduce primary energy consumption for heating and cooling of urban buildings by up to 50%.Such systems create synergies between the production and supply of heat, cooling, domestic hot water and electricity and can be integrated with municipal systems such as power, sanitation, sewage treatment, transport and waste, meaning that heating and cooling can be low-carbon, energy-efficient and maximise local renewable resources.

District energy systems provide the only means to make use of low-quality thermal energy (waste heat) to provide buildings with heating, cooling and hot water services. These systems allow for high levels of affordable renewable energy supply through economies of scale, diversity of supply, balancing and storage. This makes them a key measure for cities/countries that aiming to achieve 100% renewable energy or carbon neutral targets. If compared with competitive technologies on an even playing field, district energy it is frequently more cost effective – by up to 50% - than individual heating or cooling production when there is sufficient energy demand density in a neighbourhood.

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