Understanding District Heating: Benefits and Efficiency Explained

May 21, 2024

What is District Heating anyway?

Read about the District Heating project that generated cost savings of €165,000 to the management company, through energy savings and reduced maintenance costs.

Custom House Square, a mixed-use development in Dublin's IFSC, has seen major benefits from upgrading its district energy system. Built in 2000, the complex includes 588 apartments and commercial spaces. Since 2013, the management company has secured €200,000 for dilapidations and an €80,000 refund for gas overcharges. The €750,000 project, partly funded by SEAI’s Better Energy Communities grant and the Irish Energy Efficiency Fund, required no upfront costs from the management company. In its first year, the new system saved €165,000 through energy efficiency and lower maintenance costs, showing how landlords can benefit from similar projects.

District heating  is a way to distribute heat from a central location to several buildings through insulated pipes. It provides heating, hot water, and sometimes cooling. This system is usually more energy-efficient than having separate heating and cooling systems in each building.

How It Works:

  • Heat Generation: Heat is produced from a variety of potential energy sources including fossil fuels, biomass, geothermal, or waste heat.
  • Heat Distribution: The generated heat is then transported through insulated pipes that maintain the temperature as it moves.
  • Heat Exchange: At each building, the heat is transferred via heat exchangers into the internal heating and hot water systems.
  • Return Path: Finally, the water, now cooled, returns to the central plant to be reheated and recirculated.

Suitable Developments:

District heating is particularly suited to densely populated urban areas or developments where many buildings are in close proximity, such as:

  • Residential complexes
  • University campuses
  • Hospital complexes
  • Municipal or mixed-use developments
Custom House Square, Dublin

Custom House Square, Dublin - In the 1st year since project completion the project has generated cost savings of €165,000 to the management company.


  • Efficiency and Cost-Effectiveness: Centralising the heat production leads to higher efficiency and lower operating costs compared to individual solutions.
  • Reliability and Safety: Systems are highly reliable and eliminate the need for onsite combustion, enhancing safety.
  • Flexibility in Fuel Use: These systems can switch between different energy sources as they become available or economical.
  • Reduced Carbon Emissions: By using renewable energy sources or capturing waste heat, district heating can significantly reduce greenhouse gas emissions.

Sustainability and Carbon Gains: Utilising district heating can lead to substantial sustainability benefits:

  • Lower Carbon Footprint: Centralised systems can efficiently use low-carbon and renewable energy sources, reducing overall carbon emissions.
  • Energy Conservation: The high efficiency of these systems means less energy is wasted, conserving resources and lowering environmental impact.
  • Air Quality: Reduced onsite combustion lowers emissions of pollutants, improving air quality.

Ideal Environment for District Energy Schemes: For district heating to be most effective and to optimise its benefits, certain conditions are ideal:

  • High Density: Areas with high building density ensure that the heat loss during transmission is minimised and the infrastructure costs are justified.
  • Mixed Use Developments: Combining residential, commercial, and institutional buildings can help balance the thermal load throughout the day, making the system more efficient.
  • Proximity to Heat Sources: Being close to renewable energy sources or industrial areas where waste heat can be captured enhances the feasibility and efficiency of the system.

In summary, district heating is an efficient, safe, and sustainable method of providing heat to multiple buildings, especially suited to dense and mixed-use developments. It offers significant benefits in terms of cost, energy efficiency, and reduction in carbon emissions, making it a preferred choice in modern urban planning and development.

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