District Cooling

district cooling system schematic

Why District Cooling?

Over 10% of global electricity consumption today is used for cooling, and demand for cooling continues to increase. District cooling (centralized cooling) is a modern approach that uses increased efficiency, local sources and multi-generation to deliver more cooling capacity while reducing electricity consumption, peak load and environmental impacts. A district cooling business is easy to start and delivers multiple benefits to the customer.

In the United States, cooling buildings represents as much as one sixth of all electricity consumption. In Europe, cooling has become as important as heating, with over 60% of commercial and institutional buildings expected to have cooling systems by 2020. Cooling not only makes our urban environments more productive and comfortable, it is also vital for data centers, industrial processes and hi-tech manufacturing equipment.

Global warming poses a massive challenge to cooling. More cooling is needed than ever before, but at the same time, energy consumption and greenhouse gas emissions due to cooling must be drastically reduced. District cooling has emerged as a solution that answers to both needs. By maximizing efficiency and harnessing natural sources of cold water and waste heat, district cooling can achieve five to ten times better primary energy factors than cooling systems based on conventional chillers. The result is a high cooling capacity with significantly reduced emissions. District cooling also improves the security of electricity supply and reduces the need for investments in peak capacity.


The fundamental idea behind modern district cooling is the use of local energy sources: heat, cold and fuel sources that under normal circumstances would be lost or remain unused. Cooling is produced centrally and the cooling media – cold water – is distributed to customers via a closed pipe network. A heat exchange process inside a substation located in the customer’s premises transfers heat from the customer’s internal cooling circuits into the network. This surplus heat can later be used in heating.

Sources of free cooling that can be harnessed include rivers, lakes, sea and ground water. Heat energy can also be converted into cooling through an absorption process. Depending on local circumstances, free or inexpensive heat sources can include biofuels, solar panels and surplus heat from electricity co-generation (CHP). In addition to sources of free cooling and absorption, district cooling can also make use of heat pumps that produce heat and cold energy simultaneously in the same process. Large-scale industrial chillers used in district cooling often consume less than half the electricity need of individual chillers.

Besides the use of local energy sources, another major advantage of district cooling is the ability to store cooling energy over time. One way to do this is to store cold water in tanks. Storage makes it possible to cut peak load and significantly optimize production.


Cooling is needed in many kinds of buildings, including office buildings, shopping centers, hospitals, hotels, data centers, manufacturing plants and homes. Even though peak consumption occurs during hot weather, cooling is often needed throughout the year. Over 40% of commercial and institutional buildings in Europe already have cooling systems, and this figure is set to grow to 60% by 2020. A district cooling business is easy to start in a new building area, especially in a dense city center filled with commercial buildings. New buildings are easily designed to be suited for district cooling.

Comfort cooling is also becoming more common in residential buildings. Rising standards of living mean that people are willing to pay for more comfortable living conditions. Environmental awareness channels the demand towards sustainable and eco-friendly solutions. Stricter building standards are encouraging low-energy houses that reduce cooling needs with insulation and other passive methods, but there is also need for additional mechanical cooling, and the method used to produce it must be sustainable.

Cooling is critical for data centers, manufacturing equipment and many industrial processes. The availability of inexpensive and sustainable cooling is a key factor in location decisions in hi-tech industries.


An important step in combating climate change is replacing old-fashioned energy production systems with modern, efficient and environmentally friendly solutions. District cooling represents the modern approach: it replaces inefficient individual electric cooling systems with an effective centralized system that utilizes local energy sources.

The majority of comfort cooling in Europe and around the world is today produced by small, electrically driven cooling machines. These conventional chillers are inefficient, consuming as much as twice the primary energy of large-scale industrial chillers used in district cooling. District cooling can moreover be part of a multi-generation process, where electricity, heat and cooling are produced simultaneously as eco-efficiently as possible. When natural sources of cold water, surplus heat and waste heat are used to produce district cooling, its primary energy factor can be five to ten times less than that of cooling systems based on conventional chillers.

Thanks to its efficiency, district cooling is an effective way to reduce greenhouse gases and also other harmful emissions in an urban environment. Replacing conventional systems with district cooling significantly reduces carbon dioxide, nitrogen oxide, sulphur dioxide, particulate and other emissions.


Electricity consumption in Europe and globally continues to increase. This trend is commonly associated with ao. the increased need for comfort cooling, especially in Southern European countries. What’s more, peak loads in power generation, traditionally occurring during the winter, are now shifting to the summer. This creates significant challenges for power system capacities.

District cooling helps secure the supply of electricity in the face of these challenges. It not only reduces the total amount of electricity needed for cooling, but also reduces electricity consumption peaks. The result is a more resilient energy infrastructure with less need for investment in electricity peak production, transmission and distribution.