In a district energy system, a central source produces steam, hot water or cold water, which is pumped through heavily insulated pipes to provide space heating/cooling or hot water for surrounding buildings. This allows individual building operators to save space and money by removing the need for individual heating and air conditioning equipment. District energy systems are often used to distribute the heat generated by combined heat and power systems, although they can be used to distribute thermal energy produced independently from resources such as biomass, geothermal heat, solar energy, or cold lake or ocean water.

District energy systems have been used for hundreds of years and today are primarily found in downtown areas, college campuses, and hospitals. Based on 2009 data, there are 837 district energy systems in the United States.


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