This solution has potential but is not yet available in the real world – or the technology still lacks clear effectiveness, evidence, or a reasonable cost – and is not yet ready to be deployed.
Deploying district cooling is the process of connecting multiple buildings in a dense area to a single, highly efficient source of cooling. The increased energy efficiency and reduction in use of high global warming potential refrigerants can translate into substantial emissions reductions and lower operating expenses. District cooling systems that integrate cool thermal storage have the potential to significantly reduce electricity demand during peaks when demand for cooling can strain electricity grids. However, the high upfront cost, long-term planning, and large number of stakeholders involved make this a challenging solution, especially in low- and middle-income countries where new demand for cooling is growing. Lack of publicly available data also makes this potential solution difficult to explore in greater depth. Based on our assessment, we will “Keep Watching” this potential solution.
Based on our analysis, deploying district cooling is a potentially impactful option for reducing emissions from buildings as demand for cooling continues to grow. However, upfront cost and project complexity are major barriers to deployment, and a lack of data is a barrier to deeper analysis. This potential solution is therefore classified as “Keep Watching.”
| Plausible | Could it work? | Yes |
|---|---|---|
| Ready | Is it ready? | Yes |
| Evidence | Are there data to evaluate it? | No |
| Effective | Does it consistently work? | Yes |
| Impact | Is it big enough to matter? | Yes |
| Risk | Is it risky or harmful? | No |
| Cost | Is it cheap? | No |
District cooling consists of a centralized cooling system that distributes chilled water to multiple buildings through a network of insulated underground pipes. The cooled water absorbs heat from the buildings, replacing the need for air conditioners or chillers in each building. District cooling can produce cooled water from a variety of renewable sources, such as renewable electricity, solar cooling, and natural cooling sources, including seawater, lakewater, rivers, and groundwater. It can even use waste heat from industry to generate cooling. Many systems include thermal energy storage facilities where frozen water, cold water, or phase change materials are cooled when electricity prices are low for use during peak hours to save costs and reduce strain on the electricity grid. District cooling is best applied to high-density areas and can be combined with district heating to provide year-round conditioning.
When district cooling replaces conventional standalone systems in residential and commercial buildings, it can reduce emissions through two main mechanisms. First, many district cooling systems exchange heat with natural sources of cooling such as oceans, deep lakes, and rivers, a process that can be many times more energy efficient than conventional cooling systems. This results in reduced energy use and reduced emissions from the electricity used to operate the system. Second, district cooling systems can reduce the use of refrigerants with high global warming potentials, which can leak at all stages of a cooling system’s lifespan. When replacing standalone systems, district cooling can significantly reduce the total volume of refrigerants used. In addition, some district cooling systems do not use any refrigerants at all (e.g., exchanging heat with ocean or deep lake water), and many are able to use refrigerants with low global warming potentials. For instance, the Zuidas International Business Hub in the Netherlands adopted a district cooling system that uses lake cooling combined with chillers, reducing emissions by 75% compared to conventional cooling systems.
According to the International Energy Agency (IEA), global carbon emissions from cooling buildings reached 1.02 Gt CO₂‑eq in 2022. The majority of emissions associated with cooling are from standalone systems such as window air conditioners and chillers that serve a single building. District cooling systems are relatively rare at this time, with most capacity found in the United States and the Gulf Arab States. While existing district cooling systems can be made less emitting, there may be greater potential for new systems because demand for cooling is increasing by ~4%/yr as global temperatures rise and as standards of living improve in regions that experience high temperatures. This is raising concerns about the new electricity generating capacity needed when demand peaks on very hot days. District cooling systems can reduce overall energy use for cooling relative to standalone systems, and when paired with cool thermal storage, can significantly reduce demand during peak hours and on hot days. Building owners can enjoy less maintenance costs, more reliable cooling, and increased floor space when district cooling systems replace bulkier standalone cooling systems. In dense areas with good access to natural or low-cost cooling sources, district cooling systems can cost less to operate and offer lifetime savings despite the higher upfront costs.
Deploying district cooling systems has high upfront costs and requires extensive planning and coordination among a wide range of stakeholders. These projects can face challenges in getting financing due to a lack of confidence for both investors and customers, uncertainty about future loads, and regulatory barriers. These can be especially challenging in low- and middle-income countries where demand for cooling is growing rapidly. Many buildings are likely to invest in standalone systems in the near term, locking them into alternatives and weakening the business case for district systems in the area. Meanwhile, the full potential is difficult to assess due to a lack of data on district cooling systems globally.
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