Modernizing District

Energy Systems Could

Reduce Heating and
Cooling Primary
Energy Consumption
by up to 50% finds New
Report
Nairobi, 25 February 2015 - A transition to modern district
energy systems could contribute to 60 per cent of required
energy sector emissions reductions by 2050, and reduce
primary energy consumption by up to 50 per cent, according to
a new report launched today by the United Nations
Environment Programme (UNEP) in collaboration with the
Copenhagen Centre on Energy Efficiency (C2E2), ICLEI - Local
Governments for Sustainability, and UN-Habitat.

With cities accounting for 70 per cent of global energy use and
for 40-50 per cent of greenhouse gas emissions
worldwide, District Energy in Cities: Unlocking the Potential of
Energy Efficiency and Renewable Energy, reveals how local
authorities and national governments can develop energy-
efficient, climate-resilient and affordable district energy systems
as one of the most cost-effective and efficient solutions for
reducing greenhouse gas emissions and primary energy
demand, and for helping to keep global temperature rise to two
degrees Celsius above pre-industrial levels.

District energy systems can also contribute to the green

economy transition through cost savings from avoided or
deferred investment in power-generation infrastructure and
peak capacity; wealth creation through reduced fossil fuel
expenditure, local tax revenue; and employment.

"Our response and our ability to keep the world within a 2°C
scenario, has led us to focus on district energy in cities. These
are practical, reliable, bring benefits to consumers and they
generate benefits in terms of our response to climate change,"
said Achim Steiner, United Nations Under-Secretary-General
and Executive Director of UNEP.

"In launching this report, we want to draw attention of the

world's decision makers, mayors, leaders at the community
level, to the importance of district energy systems and hopefully
through the lessons learnt in many parts of the world, ensure
that this is yet one more element of our response that will allow
us to practice and draw upon solutions already in place, proven
and part of the transition to a green economy."

Currently, heating and cooling, of space and water, account for

half of the energy consumption in some cities, with systemic
inefficiencies incurring massive economic and social costs, and
acting as a major barrier to universal access to modern energy.

Cooling demand in particular is growing worldwide, spending

on energy services is increasing. According to the International
Energy Agency, energy consumption for space cooling
increased 60 per cent globally from 2000 to 2010, and is set to
expand by 625 per cent by 2050 in selected regions of Asia and
Latin America.
District energy systems - which pipe steam, hot water or cold
water around a city from a central location for use in buildings -
are being used in a variety of cities worldwide because of their
higher energy efficiency which can significantly reduce the
greenhouse gas emissions of cooling and heating. This can
result in improved air quality, and, where district systems use
renewable power sources, reduce reliance on fossil fuels and
energy imports, increasing the resilience of cities to fuel price
shocks.

The city of St Paul, Minnesota, USA, for example, uses district

energy fuelled by municipal wood waste to displace 275,000
tons of coal annually and to keep US$12 million in energy
expenses circulating in the local economy. And in Toronto,
Canada, the extraction of lake water for district cooling reduces
electricity use for cooling by 90 per cent, earning the city
US$89 million from selling a 43 per cent share in its district
energy systems, which it could use to fund other sustainable
infrastructure development. Paris, France, is providing cheaper,
more renewable heat through district heating and, by owning a
third of its district heating company, also benefits from an
annual dividend of $US 2.6 million and an annual concession
fee of $US 9.1 million.

"Cities are crucial partners in making Sustainable Energy for All

a reality. With their help we can change the environment,
change the way we produce and use energy and at the same
time significantly mitigate climate change, accelerate economic
development, reduce environmental pollution and alleviate
extreme poverty and thereby making cities a lot more resilient,"
said Kandeh Yumkella, UN Under-Secretary-General, Special
Representative of the Secretary-General and CEO of the
Sustainable Energy for All initiative.

Through an analysis of the 45 'champion cities', which have

collectively installed more than 36 GW of district heating
capacity (equivalent to 3.6 million households), 6 GW of district
cooling capacity (equivalent to 600,000 households) and
12,000 km of district energy networks, the report finds that
while contributions of district energy are significant and
growing, the full potential of these systems remains largely
untapped, with significant opportunities existing for growth,
refurbishment and new development.

Gujarat International Finance Tec-City, known as GIFT City,

India, is developing the country's first district cooling system,
which could reduce electricity demand for cooling by 65-80 per
cent. Yerevan, Armenia, is retrofitting and modernizing its
district heating systems, which historically had losses as high
as 50 per cent. After the first phase of refurbishment, 10,000
residents were reconnected, reducing energy consumption by
50.2 GWh annually and providing heat at cheaper rates than
with residential gas boilers. While a Booz & Company 2012
study of the Gulf countries found that district cooling could
provide 30 per cent of forecasted cooling needs by 2030,
avoiding 20 GW of new power capacity and 200,000 barrels of
oil equivalent per day in fuel.

Local governments are uniquely positioned to advance district

energy systems in their various capacities as planners and
regulators, as facilitators of finance, as role models and
advocates, and as large consumers of energy and providers of
infrastructure and services (e.g., energy, transport, housing,
waste collection, and wastewater treatment). For example, in
2012 alone, the Greater London Authority's integrated energy
and land-use planning policy resulted in US$213 million of
investment in heat network infrastructure.

The policy options available to cities often are influenced by

national frameworks and the extent of devolved authority. This
publication outlines the policy best practices that local
governments can use within these four broad capacities,
accounting for diverse national frameworks.

To facilitate the transition to modern district energy systems,

UNEP has launched a new initiative on District Energy in Cities,
as the implementing mechanism for the Sustainable Energy for
All (SE4ALL) District Energy accelerator. As part of this
initiative UNEP has developed a policy and investment road
map comprising 10 key steps to accelerate the development,
modernization and scale-up of district energy in cities.

A decision tree, developed as an outcome of this publication

and of the exchanges with the 45 champion cities, will guide
cities through these various stages and highlight tools and best
practices that could be available to local governments in their
roles as planner and regulator, facilitator, provider and
consumer, coordinator and advocate. Twinning between cities -
matching champion ones with learning ones - will be a key
component of the new district energy initiative led by UNEP.

Notes to Editors

One of the three objectives of the Sustainable Energy for All

initiative is the doubling of the global rate of improvement in
energy efficiency by 2030. The Global Energy Efficiency
Accelerator Platform was established to help reach this
objective, by supporting accelerated action to improve energy
efficiency in specific sectors, such as district energy, lighting,
appliances, vehicle efficiency, buildings or industry. The Global
Initiative on District Energy in Cities is the implementation
mechanism for the SE4ALL District Energy Accelerator.

Additional quotes

"Today, cities account for over 70 per cent of global energy

consumption. This asks for a swift and sustainable transition in
urban heating, cooling and electricity.With the publication
of District Energy in Cities: Unlocking the Potential of Energy
Efficiency and Renewable Energy cities get practical guidance
on how to achieve this transition while increasing reliability of
energy supply, saving money, creating jobs and decreasing
emissions. Being a lead partner of the initiative, ICLEI offers
support to cities interested in successfully managing their
versatile and crucial role for delivery on the ground - from
integrated urban and energy planning to bringing stakeholders
together- to harness the multiple benefits of district energy in
cities," Gino Van Begin, Secretary General, ICLEI - Local
Governments for Sustainability.

"The District Energy in Cities: Unlocking the Potential of Energy

Efficiency and Renewable Energy publication offers essential
information and practical guidance to any city interested in a
local low-emission energy supply mix. The City of Seoul is
honoured to be a contributor to this handbook as well as the
Accelerator platform, hoping for other local governments to also
start applying district energy in their communities," Park Won-
soon,Mayor of Seoul, South Korea.

"It is an honour for Sonderborg with our ProjectZero transition

project to be featured as district heating champion city in the
UNEP publication. Green district heating is the backbone for
our ZEROcarbon goal and we are grateful to inspire other
cities. The publication is a great tool for every city that wants to
meet ambitious carbon targets and they are all welcome to visit
Sonderborg - as seeing is believing," Erik Lauritzen, Mayor of
Sonderborg, Denmark.

"The need for cities and towns to become more sustainable

and to reduce their carbon emissions is imperative as urban
populations grow rapidly. Leaders of many municipalities are
already showing strong initiative to improve the lifestyles and
livelihoods of their citizens while improving the environment,
both locally and globally. District Energy in Cities: Unlocking the
Potential of Energy Efficiency and Renewable Energy highlights
key technology options available to communities to provide
heating and cooling services in a cost-effective manner and
with low environmental impacts. The findings of this report
should be studied carefully by all policymakers and private
developers who are endeavouring to achieve a more
sustainable future," Ralph Sims, professor at Massey
University, New Zealand, and member of the Scientific and
Technical Advisory Panel of the Global Environment Facility.

"District Energy in Cities: Unlocking the Potential of Energy

Efficiency and Renewable Energy is a timely, comprehensive
and useful knowledge tool. An essential part of the agenda for
sustainable cities, district heating and cooling offer a
tremendous, cost-effective opportunity to reduce greenhouse
gas emissions while improving energy security and providing
affordable energy solutions for residents. This publication
provides a pragmatic, high-level analysis of major issues -
including technological solutions, costs, business models, and
the roles and capacities of the public and private sectors - and
offers the way forward. It includes an extremely useful set of
nearly 40 specific, practical examples of best practices from
around the world. Overall, the District Energy in Cities Initiative
offers a great platform for cooperation among cities, the private
sector and multilateral development institutions," Alexander
Sharabaroff, Operations Officer (Energy), International Finance
Corporation.

"With the publication of District Energy in Cities: Unlocking the

Potential of Energy Efficiency and Renewable Energy, UNEP
has made a hugely valuable contribution to the climate and
energy debate. Not only does it rightly identify the specific
challenge of supplying low carbon heat to the urban
environment as a necessary element of the general energy
transition, it provides highly practical advice and analysis for
policy-makers on how this can be achieved. An elegant
demonstration of the value of thinking globally while acting
locally, UNEP's effort to drive emergence of District Energy as
a solution for cities is the right initiative at the right moment!" -
Paul Voss, Managing Director, Euroheat & Power.

"District Energy in Cities: Unlocking the Potential of Energy

Efficiency and Renewable Energy provides a critical set of
information to cities as they develop action plans to meet
sustainability, energy and climate goals. By providing thoughtful
analysis of both key barriers and successful best practices, this
handbook helps decision makers quickly identify important
issues and successful tactics from peer cities as they move
forward with district energy. The District Energy Accelerator is a
valuable platform to advance district energy through resources
such as this and by connecting stakeholders for greater
collaboration," Katrina Pielli, Senior Policy Advisor, Office of
Energy Efficiency and Renewable Energy, U.S. Department of
Energy.

"We very much support UNEP's work on District Energy in

Cities - this publication shows that energy-efficient district
energy systems as basis for climate mitigation and socio-
economic benefits are not a question of technology. It is a
question of forward-looking and sustainable city planning. It is a
question of always looking for solutions. And cities show that
they are already today the pragmatic implementers of this
technology. This publication is clearly a guide for all mayors
that want their city to be at the forefront of low-carbon
development for healthy and liveable cities. Danfoss invites all
interested private sector actors to join the District Energy in
Cities Initiative and support the dissemination of this knowledge
and transfer of technical expertise in cities and countries
worldwide," Niels B. Christiansen, Danfoss CEO.