District heating (less commonly called teleheating) is a system for distributing heat generated in a centralized location for residential and commercial heating requirements such as space heating and water heating. The heat is often obtained from a cogeneration plant burning fossil fuels but increasingly biomass, although heat-only boiler stations, geothermal heating and central solar heating are also used, as well as nuclear power. District heating plants can provide higher efficiencies and better pollution control than localized boilers. According to some research, District Heating with Combined Heat and Power - CHPDH is the cheapest method of cutting carbon, and has one of the lowest carbon footprints of all fossil generation plants.
The core element of a district heating system is usually a cogeneration plant (also called combined heat and power, CHP) or a heat-only boiler station. Both have in common that they are typically based on combustion of primary energy carriers. The difference between the two systems is that, in a cogeneration plant, heat and electricity are generated simultaneously, whereas in heat-only boiler stations - as the name suggests - only heat is generated.
The combination of cogeneration and district heating is very energy efficient. A thermal power station which generates only electricity can convert less than approximately 50 % of the fuel input into electricity. The major part of the energy is wasted in form of heat and dissipated to the environment. A cogeneration plant recovers that heat and can reach total energy efficiency beyond 90 %.
Other heat sources for district heating systems can be geothermal heat, solar heat, surplus heat from industrial processes, and nuclear power.
Nuclear energy can be used for district heating. The principles for a conventional combination of cogeneration and district heating applies the same for nuclear as it does for a thermal power station. One use of nuclear heat generation was with the Ågesta Nuclear Power Plant in Sweden. In Switzerland, the Beznau Nuclear Power Plant provides heat to about 20,000 people. Russia has several cogeneration nuclear plants which together provided 11.4 PJ of district heat in 2005. Russian nuclear district heating is planned to nearly triple within a decade as new plants are built.
After generation, the heat is distributed to the customer via a network of insulated pipes. District heating systems consists of feed and return lines. Usually the pipes are installed underground but there are also systems with overground pipes. Within the system heat storages may be installed to even out peak load demands.
The common medium used for heat distribution is water, but also steam is used. The advantage of steam is that in addition to heating purposes it can be used in industrial processes due to its higher temperature. The disadvantage of steam is a higher heat loss due to the high temperature. Also, the thermal efficiency of cogeneration plants is significantly lower if the cooling medium is high temperature steam, causing smaller electric power generation. Heat transfer oils are generally not used for district heating, although they have higher heat capacities than water, as they are expensive, and have environmental issues.
At customer level the heat network is connected to the central heating of the dwellings by heat exchangers (heat substations). The water (or the steam) used in the district heating system is not mixed with the water of the central heating system of the dwelling.
Typical annual loss of thermal energy through distribution is around 10%, as seen in Norway's district heating network.
District heating has various advantages compared to individual heating systems. Usually district heating is more energy efficient, due to simultaneous production of heat and electricity in combined heat and power generation plants. The larger combustion units also have a more advanced flue gas cleaning than single boiler systems. In the case of surplus heat from industries, district heating systems do not use additional fuel because they use heat (termed heat recovery) which would be disbursed to the environment.
District heating is a long-term commitment that fits poorly with a focus on short-term returns on investment. Benefits to the community include avoided costs of energy, through the use of surplus and wasted heat energy, and reduced investment in individual household or building heating equipment. District heating networks, heat-only boiler stations, and cogeneration plants require high initial capital expenditure and financing. Only if considered as long-term investments will these translate into profitable operations for the owners of district heating systems, or combined heat and power plant operators. District heating is less attractive for areas with low population densities, as the investment per household is considerably higher. Also it is less attractive in areas of many small buildings; e.g. detached houses than in areas with a few much larger buildings; e.g. blocks of flats, because each connection to a single-family house is quite expensive.
One study shows that District Heating with Combined Heat and Power has the lowest carbon footprint of any heating system, and it rapidly competes with extra insulation. 
Since conditions from city to city differ, every district heating system is uniquely constructed. In addition, nations have different access to primary energy carriers and so they have a different approach how to address the heating market within their borders. This leads not only to a different degree of diffusion but also to different district heating systems in general throughout the world.
Since 1954, district heating has been promoted in Europe by Euroheat & Power. They have compiled an analysis of district heating and cooling markets in Europe within their Ecoheatcool project supported by the European Commission. The legal framework in the member states of the European Union is currently influenced by the EU-CHP Directive.
District heating in Vienna is run by Wien Energie. In the business year of 2004/2005 a total of 5.163 GWh was sold, 1.602 GWh to 251.224 private apartments and houses and 3.561 GWh to 5211 major customers.
The three large municipal waste incinerators provide 22 % of the total in producing 116 GWh electric power and 1.220 GWh heat. Waste heat from municipal power plants and large industrial plants account for 72 % of the total. The remaining 6 % is produced by peak heating boilers from fossil fuel.
In Denmark, district heating covers more than 60% of space heating and water heating. In 2007, 80.5% of this heat was produced on combined heat and power plants. Heat recovered from waste incineration accounted for 20.4% of the total Danish district heat production. Most major cities in Denmark have big district heating networks including transmission networks operation with up to 125°C and 25 bar pressure and distribution networks operating with up to 95°C and between 6 and 10 bar pressure. The largest district heating system in Denmark is in the Copenhagen area operated by CTR I/S and VEKS I/S. In central Copenhagen, the CTR network serves 275,000 households (90-95% of the area's population) through one network of 54-kilometer double district heating distribution pipes providing a peak capacity of 663 MW. The consumer price of heat from CTR is approximately €49 per MWh plus taxes (2009).
In Finland district heating accounts for about 50 per cent of the total heating market , 4/5 of which being produced from combined heat and power plants. Over 90 per cent of apartment blocks, more than half of all terraced houses, and the bulk of public buildings and business premises are connected to a district heating network. Natural Gas is mostly used in areas to the south east gas pipeline network, imported coal is used in areas close to ports, and peat is used in northern areas where peat is a natural resource. However, other renewables such as wood chips and other paper industry combustible by-products are also used, as is the energy recovered by the incineration of municipal solid waste. Industrial units which generate heat as an industrial by-product may sell otherwise waste heat to the network rather than release it to the environment. In some towns, waste incineration can contribute as much as 8% of the district heating heat requirement. Availability is 99.98% and disruptions when they do occur usually reduce temperatures by only a few degrees.
In Germany district heating has a market share of around 14 % in the residential buildings sector. The connected heat load is around 52.729 MW. The heat comes mainly from cogeneration plants (83 %). Heat-only boilers supply 16 % and 1 % is surplus heat from industry. The cogeneration plants use natural gas (42 %), coal (39 %), lignite (12 %) and waste/others (7 %) as fuel.
District heating has rather little legal framework in Germany. There is no law on it as most elements of district heating are regulated in governmental or regional orders. There is no governmental support for district heating networks but a law to support cogeneration plants. As in the European Union the CHP Directive will come effective, this law probably needs some adjustment.
With 95% of all housing (mostly in the capital of Reykjavik) enjoying district heating services - mainly from geothermal energy, Iceland is the country with the highest penetration of district heating.
Most of the district heating in Iceland comes from three main geothermal power plants, producing over 800 MWth:
In Norway district heating only constitutes approx. 2 % of energy needs for heating. This is a very low number compared to similar countries. One of the main reasons district heating has a low penetration in Norway is access to cheap hydro based electricity. However, there is district heating in the major cities.
In most Russian cities, district-level combined heat and power plants (Russian: ТЭЦ, теплоэлектроцентраль) produce more than 50 % of the nation's electricity and simultaneously provide hot water for neighbouring city blocks. They mostly use coal and oil-powered steam turbines for cogeneration of heat. Now, gas turbines and combined cycle designs are beginning to be widely used as well. A Soviet-era approach of using very large central stations to heat large districts of a big city or entire small cities is fading away as due to inefficiency, much heat is lost in the piping network because of leakages and lack of proper thermal insulation .
In Serbia, district heating was used throughout the main cities, particularly in the capital, Belgrade. NATO targeted one of the main DH plants, the District Heating Plant of New Belgrade (JKP "Beogradske elektrane") during the Kosovo War . This plant was deemed the beginning of the centralized heating supply to Belgrade, built in 1961 as a means to provide effective heating to the newly built suburbs of Novi Beograd. The district heating system of Belgrade possesses 112 heat sources of 2,454 MW capacity and by way of the pipelines more than 500 km long and 4365 connection stations, providing district heating to 240,000 apartments and 7,500 office/commercial buildings of the total floor area exceeding 17,000,000 square meters.
Sweden has a long tradition for using district heating in urban areas. The city of Växjö has reduced its fossil fuel consumption by 30% in 1993-2006 and aims at 50% reduction in 2010. This is to a large extent to be achieved by way of biomass fired district heating
90% of the energy in Swedish district heating system are usually produced with renewable sources. The remaining 10 % are only used when the weather is really cold and there is a very high energy demand. Because of the law forbidding landfill, waste is commonly used as a fuel.
In the United Kingdom, district heating also became popular after World War II, but on a restricted scale, to heat the large residential estates that replaced areas devastated by the Blitz. The photo (right) shows the accumulator at the Pimlico District Heating Undertaking (PDHU), just north of the River Thames. The PDHU first became operational in 1950 and continued to expand up till about 1960. The PDHU once relied on waste heat from the now-disused Battersea Power Station on the South side of the River Thames. It is still in operation, the water now being heated locally by a new energy centre which incorporates 3.1 MWe /4.0 MWTh of CHP engines and 3 x 8 MW gas fired boilers.
One of the United Kingdom's largest district heating schemes is EnviroEnergy in Nottingham. Plant initially built by Boots is now used to heat 4,600 homes, and a wide variety of business premises, including the Concert Hall, the Nottingham Arena, the Victoria Baths, the Broadmarsh Shopping Centre, the Victoria Centre and others. The heat source is a Waste-to-energy incinerator. Scotland has several district heating systems with the first in the UK being installed at Aviemore and others following at Lochgilphead, Fort William and Forfar.
Many other such heating plants still operate on estates across Britain. Though they are said to be efficient, a frequent complaint of residents is that the heating levels are often set too high - the original designs did not allow for individual users to have their own thermostats.
The largest District Heating System in Spain is located in Barcelona. The company that runs it is Districlima S.A. and more than 50 buildings (around 500 000 m2) are connected to the network.
In North America, district heating systems fall into two general categories. Those that are owned by and serve the buildings of a single entity are considered institutional systems. All others fall into the commercial category.
District Heating is becoming a growing industry in Canadian cities, with many new systems being built in the last ten years. Some of the major systems in Canada include:
Many Canadian universities operate central campus heating plants.
Consolidated Edison of New York (Con Ed) operates the New York City steam system, the largest commercial district heating system in the world. The system has operated continuously since March 1882 and serves Manhattan Island from the Battery through 96th Street. While operating smoothly for most of its time in service, incidents have occurred, On July 18, 2007, one person was killed and numerous others injured when a steam pipe exploded on 41st Street and Lexington. In 1989 also, three people were killed in a similar event. In addition to providing space and water heating, steam from the system is used in numerous restaurants for food preparation, process heat in laundries and dry cleaners, as well as to power absorption chillers for air conditioning. NRG Energy also operates district systems in major cities of San Francisco, Harrisburg, Minneapolis, Pittsburgh and San Diego. Seattle Steam Company operates a district system in Seattle. Detroit Edison operates a district system in Detroit that started operation at the Willis Avenue Station in 1903.
District heating is also used on many college campuses most notably the University of Notre Dame and the University of Maryland, College Park produce over half their own electricity and all of their heating needs from the same plant on their respective campuses.
Many companies operate district cogeneration facilities that provide steam and/or hot water to many of the office buildings. Also, most operators in the Greater Tokyo serve district cooling.
District heating traces its roots to the hot water-heated baths and greenhouses of the ancient Roman Empire. District systems gained prominence in Europe during the Middle Ages and Renaissance, with one system in France in continuous operation since the 14th century. The U.S. Naval Academy in Annapolis began steam district heating service in 1853.
Although these and numerous other systems have operated over the centuries, the first commercially successful district heating system was launched in Lockport, New York, in 1877 by American hydraulic engineer Birdsill Holly, considered the founder of modern district heating.
In the 1980s Southampton began utilising combined heat and power district heating, taking advantage of geothermal heat "trapped" in the area. The geothermal heat provided by the well works in conjunction with the Combined Heat and Power scheme. Geothermal energy provides 15-20 %, fuel oil 10 %, and natural gas 70 % of the total heat input for this scheme and the combined heat and power generators use conventional fuels to make electricity. "Waste heat" from this process is recovered for distribution through the 11 km mains network.
The future of many of these systems are in doubt. The same kind of problems many district heating operations in former Soviet Union and Eastern Europe have today, many North American steam district heating systems began to experience in the 1960s and 1970s. In North America, the owners (in many cases power utilities) lost interest in the district heating business and provided insufficient funding for maintenance, and the systems and service to customers started to deteriorate. The result was that the systems started losing customers. The reliability decreased and finally the whole system closed down. For example, in Minnesota in the 1950s there were about 40 district steam systems, but today only a few remain.
Penetration of district heating (DH) into the heat market varies by country. Penetration is influenced by different factors, including environmental conditions, availability of heat sources and economic and legal framework.
In the year 2000 the percentage of houses supplied by district heat in some European countries was as follows:
In Iceland the prevailing positive influence on DH is availability of easily captured geothermal heat. In most East European countries energy planning included development of cogeneration and district heating. Negative influence in The Netherlands and UK can be attributed partially to milder climate and also competition from natural gas supply.
According to Helsingin Energia, consumption of energy by district heating in Helsinki since 1970 peaked in 1971, at 67 kWh/m³/year, falling to 43 kWh/m³/year in 1997, since when it has not fluctuated greatly.
Figures for Sweden suggest that the average Swede using district heating receives 4500 kWh/year from the system.
The opposite of district heating is district cooling. Working on broadly similar principles to district heating, district cooling delivers chilled water to buildings like offices and factories needing cooling. In winter, the source for the cooling can often be sea water, so it is a cheaper resource than using electricity to run compressors for cooling.
The Helsinki district cooling system uses otherwise wasted heat from summer time CHP power generation units to run absorption refrigerators for cooling during summer time, greatly reducing electricity usage. In winter time, cooling is achieved more directly using sea water. The adoption of district cooling is estimated to reduce the consumption of electricity for cooling purposes by as much as 90 per cent and an exponential growth in usage is forecast. The idea is now being adopted in other Finnish cities. The use of district cooling grow also rapidly in Sweden in a similar way.
Cornell University's Lake Source Cooling System uses Cayuga Lake as a heat sink to operate the central chilled water system for its campus and to also provide cooling to the Ithaca City School District. The system has operated since the summer of 2000 and was built at a cost of $55–60 million. It cools a 14,500 tons load.
In August 2004, Enwave Energy Corporation, a district energy company based in Toronto, Canada, started operating a system that uses water from Lake Ontario to cool downtown buildings, including office towers, the Metro Toronto Convention Centre, a small brewery and a telecommunications centre. The process has become known as Deep Lake Water Cooling (DLWC). It will provide for over 40,000 tons (140 megawatts) of cooling—a significantly larger system than has been installed elsewhere. Another feature of the Enwave system is that it is integrated with Toronto’s drinking water supply. The Toronto drinking water supply required a new intake location that would be further from shore and deeper in the lake. This posed two problems for the utility that managed the city's drinking water supply: 1. the capital cost of moving the water intake location and additionally, the new location would supply water that was so cold it would require heating before it could be distributed. The cooperation of the district cooling agency, Enwave, solved both problems: Enwave paid for the cost of moving the water intake and also supplied the heat to warm the drinking water supply to acceptable levels by effectively extracting the heat from the buildings it served. Contact between drinking water and the Enwave cooling system is restricted to thermal contact in a heat exchanger. Drinking does not circulate through the Enwave cooling systems.
In January 2006, PAL technology is one of the emerging project management companies in UAE involved in the diversified business of desalination plant, sewerage plant to district cooling system. More than 400,000 Tons of district cooling projects are already in the pipe line whilst negotiating other key projects in the region.