News & Insights

Insights on District Heating and Cooling

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District heating systems are a popular approach to modernizing heating systems. District heating typically depends on underground infrastructure to efficiently transport thermal energy from a central energy plant to multiple buildings. Central heating plants generate steam or hot water, which is then distributed through underground thermal piping networks that are typically well-insulated. This configuration reduces the reliance on individual boilers by efficiently transferring thermal energy between assets.

Compared to traditional small-scale heating and cooling systems implemented on a building-by-building basis, district heating and cooling (DHC) may boost energy efficiency, reduce greenhouse gas emissions, and provide better fuel flexibility. DHC can offer various advantages such as cost reduction, streamlined building operations, essential infrastructure supply, and the development of important employment opportunities.

DHC systems have many advantages for heat modernization. One major advantage is the ability to connect multiple buildings to a district system, that facilitates scaling and utilization of more efficient and resilient local energy resources. On a larger scale, there are many highly efficient and cleaner system possibilities that can be adopted. These include combined heat and power, wastewater heat recovery, biomass, geothermal, and other forms of renewables. Implementing these systems on a building-by-building basis would be very challenging. These options have the potential to greatly reduce emissions.

Using district heating systems can help consumers avoid the costly installation, operation, service, repair, and replacement expenditures associated with local boilers. This is considering all thermal energy is delivered to buildings in a convenient form and is managed via different local energy providers. Energy infrastructure, such as district heating networks, plays an essential part in enhancing the durability and sustainability of cities, communities, and campuses. District heating streamlines building operations, provides customers with precise heating control, and offers flexibility to accommodate changing occupant needs or improved building efficiency.

How big are Canadian district heating and cooling systems?

A newly released study by environmental group Pollution Probe found that 217 DHC systems are implemented in Canada, these systems provide 2.2% of heating needs. DHC are essential components of the climate action plan. For instance, Ottawa has begun work on the development of a new DHC system in the downtown area. The new DHC system will include four major energy centers with the most sustainable technologies and reduce emissions by 63% compared to 2005 baseline levels. Toronto and Edmonton foresee DHC as a key energy transition component.

Why is Canada expanding district heating?

Canada considers sustainable DHC systems one of the most reliable systems that would significantly reduce GHG emissions by 2050 for multiple reasons:

  • UN claims that scaling up DHC systems can lead up to 90% operational efficiency gains, which is significant for future, and encourages investing in sustainable energy systems.
  • District heating systems can reduce carbon emissions by incorporating renewable sources like geothermal, seawater, wastewater, and solar thermal energy. These heating systems maximize energy efficiency and  can achieve nearly Net Zero GHG emissions. These systems have less impact and life cycle cost compared to building-by-building systems.
  •  DHC systems can increase Energy flexibility and resilience.  They use multiple energy sources in parallel, improving energy security and reducing fossil fuel dependence.
  • District heating enables economies of scale, optimized production and distribution, Lower energy costs, and avoids fossil fuel price volatility.

How Dillon Can Help

Dillon assists clients in developing solutions that use renewable energy sources to deliver alternative heating and cooling systems. We work to optimize the district energy system’s design to lower energy costs, greenhouse gas emissions, and dependence on fossil fuels.

Our interdisciplinary team has significant experience in GHG-reduction, energy efficiency, and circular economy projects and understands business case-building and funding opportunities. Our experience includes utilizing renewable resources such as solar, wind, hydro, biomass, geothermal, and energy storage for electricity generation and heating, as well as Combined Heat and Power (CHP) systems for commercial and institutional complexes.

In May 2023, Dillon acquired Internat Energy Solutions Canada (IESC), an engineering consulting firm promoting sustainability in the economy, government, and society. For over 15 years, Internat has supported energy transition, electrification, and decarbonization by focusing on energy conservation, efficiency, GHG reduction, and renewable energy integration.

Final Thoughts

District energy system promote local economies by generating employment opportunities in various areas such as design, construction, equipment manufacturing, operation, and maintenance. District heating energy efficiency projects can also contribute to the growth of local economies and seamlessly integrate with sustainable construction practices. To achieve a successful implementation of the Net Zero future in our residential, industrial, and institutional sectors, DHC is essential. I have reservations about the effectiveness of DHC in addressing all decarbonization challenges. However, it is vital for decarbonization. Tackling the issue of greenhouse gas emissions in large buildings. Small-scale efforts can be challenging due to cost and efficiency considerations. Many renewable heating methods have limitations when it comes to low ambient and hot water temperatures. As a result, a secondary peaking system is often necessary, which adds complexity to the setup, control, and maintenance of the system. On the other hand, local municipal or governmental institutions typically handle the implementation of large DHC systems, ensuring adequate funding and expertise in design and service. These improvements enhance the performance of renewable heating and cooling systems, making them more effective, durable, and capable of lowering greenhouse gas emissions and energy expenses.

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