The future of urban sustainability is renewable district energy

Despite some notable exceptions, such as District Energy St. Paul (above), district thermal remains a technology far more rare than it should be.

District Energy St. Paul

New design innovations can dramatically reduce the need for fossil fuels to help heat or cool a building.


In response to the Trump administration’s recent announcement to withdraw the United States from the Paris climate agreement, city leaders have boldly reaffirmed their commitment to local climate action. Cities have long been vocal climate advocates through efforts like C40 and Climate Mayors, but as former D.C. energy director Sam Brooks recently pointed out, they still have a long way to go to achieve their ambitious targets.

It’s well understood that in most U.S. cities, the largest area of energy consumption is in buildings, which is one reason that energy efficiency and renewable electricity have received so much attention. But few cities have their own municipal power companies; most have little control over the emissions profile of the electricity they consume, as generation is controlled by state-regulated utilities or independent power producers. When that mix relies heavily on fossil fuels, as remains too often the case, a city’s climate goals become that much harder to reach.

But the focus on electricity ignores what is actually the largest single use of energy in buildings: heating and cooling. Air conditioning in the summer and heating in the winter can account for up to half of city energy consumption. While most American buildings currently either tap the electric grid for cooling or burn oil or gas in their basements for heat, that doesn’t have to be the case: district thermal systems can provide heat and cool directly. And they offer a way for American cities to take greater charge of their emission reduction goals.

District energy is a time-tested technology, dating back to the 19th century in its modern form. In simple terms, a district energy system takes energy from a hot or cold thermal source, transfers it via hot or cold water or steam into a building through insulated pipes, and converts it into heating or cooling. For example, at District Energy St. Paul, the largest district energy system in the U.S., biomass fuels a combined heat and power plant that produces hot water that is used to meet 65 percent of heating needs. A system in Chicago produces ice to cool a large part of the downtown.

Despite this history, district thermal remains a technology far more rare than it should be.   Implementing district thermal isn’t easy: it requires local champions, developers and governments with patient capital, and a willingness to stick to long-term plans. But recent design innovations, coupled with the urgency of climate change, make it both more necessary and more feasible than ever to use district thermal systems to capture clean “heat” and “cool” from multiple local sources and distribute it across a neighborhood—dramatically reducing the need for fossil fuels to help heat or cool a building.

Capturing free energy

District thermal is more energy efficient than most any other onsite generation, but it isn’t always carbon-neutral. Most existing district energy systems either run primarily on fossil fuels or use them to supplement a single renewable source when building energy demand peaks. Vancouver’s iconic system, the Southeast False Creek Neighborhood Energy Utility, captures waste heat from untreated urban sewage to provide energy and hot water for 22 buildings, but it uses natural gas boilers as a backup energy source when the waste heat isn’t sufficient.

That doesn’t have to be the case. There are free sources of renewable thermal energy everywhere that can be harnessed for district heating and cooling: geothermal energy stored in the earth (also referred to as geoexchange), waste heat recovered from sewage water or data centers, solar thermal captured by panels, and free cooling pumped from deep lake water, among others. A recent study in Scotland suggests that the entire city of Glasgow could be powered four months a year with the waste heat from its sewers alone. That’s right, the hot water from your shower, bath, or dishwasher can be tapped downstream and converted to energy to heat buildings. How’s that for a local renewable resource?

The key innovation that hasn’t yet taken hold with district energy systems—though not apparently for any technical reasons, based on our research—is the ability to draw on multiple sources of renewable energy to make fossil fuels either unnecessary or only needed during emergency spikes in demand. The use of multiple sources enables the system to store thermal energy and redistribute it to buildings as needed on an optimized basis. When an excess of hot or cold water develops, it can be stored in tanks for a day or two, and dispatched when needed.

On days when there is not enough waste heating or cooling to meet demand, additional external sources will make up the difference. These sources could be traditional boilers or chillers; a co-generation plant; a waste heat source such as a data center; or a renewable source, such as an anaerobic digester, geothermal well, or deep-water pipe from a lake or ocean. The system would be inherently flexible, enabling the integration of a wide range of sources both initially and over time.

The use of multiple renewable sources enables the latest generation of district energy systems to store thermal energy and redistribute it to buildings as needed.

"District Energy in Cities" / UN

The three keys to progress

So what can urbanists and technologists do to accelerate the deployment of district energy systems that have a greater focus on renewable energy? The answer is a combination of local vision, community energy planning, and smarter software.

Vision. Unlike putting solar PV on a roof, building a district energy system is a major engineering project that requires buy-in from a lot of stakeholders. That makes it critical for district energy to have a local champion with an energy vision who can educate the market and build interest. On their own, for instance, developers might not realize that they can save serious money by connecting to a district energy system and avoiding the capital outlay required to purchase their own HVAC systems.

Some local leaders have started to lead the charge. Mayors Marty Walsh in Boston and Bill Peduto in Pittsburgh have been vocal supporters of district energy, and their leadership has started to build confidence in the market in both cities. Moving to advanced district energy systems that incorporate multiple renewable resources will require even more vision from cities.

Community energy planning. The economics of district energy are based on a series of local conditions that require significant study, such as the availability of local renewable sources of energy, the potential customer base, and the turnover of existing equipment in a district’s building stock. Understanding these conditions and building a business case can be a big initial hurdle for project developers to overcome.

One action that cities can take is to commission a community energy study that analyzes the local market both to understand what areas of the city would have the appropriate demand characteristics to justify a district energy system, and what local renewable sources are available at what potential and likely cost. The Boston Redevelopment Authority, working with researchers at MIT, recently completed a study that identified more than 40 districts in Boston that are ripe for district energy. Such independent studies can build local confidence in the market that developers might struggle to gain on their own.

Smarter software. District energy has yet to be transformed by the software revolution. Many systems do have some basic software controls, but these are usually custom-built solutions that are quickly outdated. Efficient operation of a district system requires knowing how much energy is available at a given moment, but existing software doesn’t leverage machine learning or process real-time data to predict future energy load as much as it could.

The result is that many district energy systems are larger than necessary to meet energy demand during peak periods, and thus more expensive to operate. Better software could optimize system efficiency and thus lower upfront capital costs. And while weaving together multiple variable renewable sources of thermal energy is feasible with today’s technology, smarter software could help utilize each source more efficiently and make costs more competitive with fossil sources.

The potential for renewable district energy to help decarbonize dense urban areas is significant. These systems aren’t an end-all solution to building energy challenges, of course, and must be paired with more efficient approaches to building design, such as Passive House standards. But they represent a major opportunity for cities to take local action on climate change, at a moment when that mission has never been more important.

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June 27, 2017