In North America, a number of efforts are underway to achieve high levels of energy efficiency in commercial and residential buildings. Most of these programs aim to increase the performance of the building envelope, efficiency of equipment, or to effect behavioral changes to reduce greenhouse gas emissions from the building stock. One area generally overlooked by program managers is the source of energy supply to a building; district energy systems (DES) are a proven method to supply thermal energy to buildings while reducing peak demand, annual energy use, and total greenhouse gas emissions.

This paper provides a background on the concept and configuration of district energy systems. It then reviews several systems (Toronto, St. Paul, and Cornell University) currently in operation. A section of the paper then provides an analysis of the operation and implementation of one DES-reliant sustainable community (Drake Landing Solar Community). Finally, the paper provides an overview of policies used to increase the presence of DES systems in the U.S. at the local, state, and federal levels.

The paper concludes that DES can decrease waste heat, pollution, fossil fuel use, and long-term costs, and should be a technology considered alongside building-scaled improvements as part of an energy efficiency portfolio. In addition, as energy efficiency programs reduce the need for additional utility generation, the design, operation, and maintenance of DES represents a new business opportunity for electric and gas utilities. Overall, the paper finds that local communities should emphasize DES because they are the direct beneficiaries of these systems.