District Energy Systems distribute thermal energy from a central source to end users for space heating, cooling, water heating, or process heating. The central source may be one or more fossil-fuel fired boilers, a solid-waste incinerator, a geothermal source, a solar energy system, or one which utilizes heat developed as a by-product of electrical generation. This latter approach, generally known as “cogeneration” or “combined heat and power (CHP),” has high energy-utilization efficiency. Central chilled water may be produced by electric-driven chillers, absorption refrigeration machines, turbine or engine-driven compression equipment, or a combination of systems.

District Energy Systems have a number of advantages primarily related to economies of scale. Large centrally located boilers and chillers typically have higher conversion efficiencies. This translates to lower fuel costs and fewer emissions. Also, large central plants may allow flexibility of fuel sources. This includes the use of multi-fuel boilers. Solid-fuel boilers can burn municipal refuse or biomass fuels. Where site conditions allow, remote location of the plant can reduces concerns with use of more hazardous materials, such as ammonia for cooling systems.

Other advantages come from the diversity of the loads inherent in these systems (different loads peak at different times). This translates to less total installed equipment capacity. In some cases, the increased diversity can reduce utility demand charges. Centrally located facilities may also include thermal energy storage (TES) which can further spread cooling loads.

District Energy Systems are typically capital intensive due to the high cost of the distribution system, which may account for 50 to 75% of the total capital cost of a project. They are best suited for applications where the thermal load density is high and the load factor is high.¹ Densely populated urban areas, high-density building clusters, and industrial complexes are candidates. A 1992 study estimated that there were around 6,000 operating systems in the United States providing roughly 1.1 quadrillion Btu of energy annually (about 1.3% of the US energy usage).² District Energy Systems are found primarily in urban areas, on college and university campuses, hospitals, military installations, and industrial complexes. Steam is the predominant form of energy distributed accounting for about 75% of the installed capacity. Chilled water represents about 15% of the installed capacity.

The distribution system is often the most expensive component of a District Energy System. The piping usually consists of a combination of pre-insulated and field-insulated pipe in both concrete tunnel and direct burial applications. The performance of the distribution system is critically important as it must be capable of conveying thermal energy to end users reliably, economically, and efficiently.

ASHRAE provides estimates of the capital costs of distribution systems as follows:³

• Direct-buried chilled-water systems: $500 to $1,250 per foot of trench.
• Direct-buried pre-insulated heating: $750 to $1,500 per foot of trench.
• Inaccessible tunnels: $700 to $1500 per foot of trench.
• Walkable tunnels: $3,500 to $15,000 per foot of trench.

These estimates include excavation, backfill, and surface restoration in addition to the cost of the
piping and insulation systems.

Distribution systems may be either aboveground or underground. The aboveground systems have lower first cost and lower life-cycle costs because they can be easily maintained.  Aboveground systems are acceptable where they can be hidden from view. Poor aesthetics and the risk of vehicle damage prevent their use on many projects.

Underground distribution systems are more common. Systems include walk-through tunnels (Figure 1), concrete surface trenches (Figure 2), deep-burial tunnels (Figure 3), systems using poured-in-place insulation (Figure 4), and conduit systems (Figure 5).⁴

Heat transfer in buried systems depends on the thermal conductivity of soil and the depth of burial. Soil thermal conductivity varies greatly with moisture content. Reported values range from around 1.0 Btu?in/(h?ft2?°F) for dry soil to 15 Btu?in/(h?ft2?°F) for wet soil. Values of 10 to 12 Btu?in/(h?ft2?°F) are used where soil moisture content is unknown.

Heat-transfer calculations also require that the soil temperature be known. Deep soil temperature is often assumed to equal the average annual air temperature as this is readily obtained for many locations using the many sources of climatic data. For shallow burial depths, approximations have been developed for various regions of the United States by the U.S. Army Cold Regions Research and Engineering Laboratory (CRREL).

Experience indicates that all of the underground distribution system designs may experience flooding several times during their design life. They must therefore incorporate reliable water-drainage systems. Also, the insulation must have the ability to survive this flooding and return to near the original thermal efficiency. These considerations require that proper care in the design and construction of district energy distribution systems to maintain the expected efficiencies over the life of the system.

1. The load factor is the ratio of the average thermal load to the peak thermal load.
2. “1992 National Census for District Heating, Cooling, and Cogeneration,” Department of Energy; Oak Ridge National Laboratory, 1993. http://tinyurl.com/o3cbv3l.
3. 2012 ASHRAE Handbook—HVAC  Systems and Equipment. ASHRAE, 1791 Tullie Circle, Atlanta, Georgia.
4. Ibid.