Outside the Floodplain

What Is It?

Cost: Average of $30-60 million (Corix). A small campus system with fewer interconnections can cost as little as $2.4 million.
Applications: Much more effective in new construction. Works best on MUSH (municipality, university, school, healthcare) property types.
Service Life: Indefinite, depending on continued maintenance.

District energy systems connect multiple buildings with a local energy provider. A central plant produces steam, hot water, and chilled water which is distributed for heating and cooling to customers. The system can also recycle excess heat from power plants for added efficiency. District energy systems can also produce electricity.

District energy systems can increase energy efficiency because they allow individual buildings to forgo having their own boilers and chillers. Additionally, buildings can share in energy generated by the district, and overproduction of hot and cold water is minimized.

District energy can be an economically viable strategy because of efficiency gains and fuel switching. Where individual building systems may only accommodate one type of fuel, district energy systems have the option to choose the cheapest source. Buildings also pool funds for repair and maintenance costs to create savings.


  • Saves money as interconnected buildings do not require their own boilers and chillers.
  • One system can be built to use many different fuel types to allow flexibility and responsiveness to macro-market conditions.
  • Recycles excess heat from power plants.
  • Increased resiliency. District energy systems, like microgrids, can be built with backup power to island in the case of an emergency.
  • More energy efficient.
  • LEED credits available for district energy system.


  • Many legal and logistical barriers exist at the facility level, and can vary based on local utility policy, regulatory issues, and energy markets.
  • High initial cost, which may increase significantly for retrofit projects.
  • Infrastructure (underground pipes) is needed to connect buildings and can be difficult to establish in areas with highly developed infrastructure systems.
  • In terms of resilience planning, a district energy system where buildings no longer have individual heating and cooling systems will decrease redundancies or back-ups.

Regulatory Impacts and Requirements


Financing Options, Incentives, And Rebates

Additional Resources

Project Examples

  • Veolia Energy, Boston/Cambridge, supplies 70% of Boston’s high-rises with CHP steam.
  • Longwood Medical Area, Boston, MA: six hospitals use the same district energy network.


*Indicates Boston-area supplier


Photo credit: Bill Ebbesen