Cooling demand is set to soar, driven by urbanisation, economic growth, and climate change. To minimise environmental impacts, it is essential to both adapt building standards to reduce cooling needs and ensure that remaining demand is met as efficiently and sustainably as possible. District cooling – centralised, scalable, and adaptable – stands out as a mature solution proven over decades, yet its full potential depends on focused regulation, long-term planning, and a shift in urban cooling mindsets.

Achieving near-zero emissions in cooling

The vision of near-zero emission cooling by 2050 is ambitious but within reach. Achieving this goal depends on a holistic approach: reducing the need for cooling through better building design and urban planning, maximising the efficiency of cooling technologies, phasing out high-global warming potential refrigerants, and decarbonising the electricity that powers these systems.

District cooling is integral to this transition. By aggregating demand, DC systems can deploy high-efficiency equipment, leverage free or waste cooling sources such as sea water, lakes or LNG gas terminals, and facilitate the adoption of low-GWP refrigerants at scale. However, realising this vision requires robust policy frameworks and significant investment to overcome market and regulatory barriers.

The basics and symbiotic nature of district cooling

District cooling is transforming how cities keep their buildings comfortable, offering a sustainable, efficient, and future-ready solution to the growing challenge of urban heat. At its core, district cooling is the centralized production and distribution of chilled water, which is then piped through an insulated underground network to multiple buildings across a district or city. Instead of each building operating its own energy-intensive cooling system, a district cooling plant generates cooling energy at scale and delivers it as a service to end-users.

The system itself is a sophisticated integration of several main components. The heart of the operation is the district cooling plant – often called the central chiller plant – where chillers, cooling towers or alternative heat sinks such as rivers, lakes or the sea, work together to produce chilled water, typically at temperatures around 4-5°C. Such alternative, natural heat sinks are particularly interesting given that 60% of global cities with a population over 1 million are located on or near coastlines. Pumps circulate this chilled water through a network of pre-insulated pipes buried beneath city streets, ensuring minimal energy loss during distribution. At each connected building, an energy transfer station acts as the interface, using heat exchangers to transfer cooling energy from the district system to the building’s internal air conditioning network, while also providing precise metering and hydraulic separation for operational reliability.

This centralised approach brings a host of benefits that extend well beyond energy savings. By aggregating demand from many buildings, district cooling achieves significant economies of scale. Central plants can deploy industrial-grade equipment that operates more efficiently and with greater reliability than smaller, building-level systems. Maintenance and oversight are professionalised, reducing the risk of breakdowns and ensuring a consistently high level of service. Building owners benefit from lower upfront capital costs, as they no longer need to invest in their own chiller plants, cooling towers, or complex electrical systems. This not only frees up valuable building space for other uses but also streamlines construction and reduces ongoing operational expenses.

District cooling also delivers substantial environmental advantages. Centralised systems are easier to monitor and maintain, resulting in lower refrigerant leakage rates and supporting the safe use of environmentally friendly refrigerants such as ammonia or hydrocarbons. By shifting cooling production away from individual rooftops and basements, district cooling reduces urban noise and visual clutter, improving the cityscape and quality of life. Most importantly, its superior energy efficiency translates directly into lower greenhouse gas emissions and a smaller carbon footprint for the city as a whole.

Another key strength of district cooling lies in its ability to integrate with renewable energy sources and advanced energy management strategies. Thermal energy storage – often in the form of large, chilled water tanks – acts as a kind of thermal battery, allowing the system to produce and store cooling energy during periods of low electricity demand or when renewable electricity is abundant. This stored cooling can then be deployed during peak hours, shaving the city’s peak electricity demand and reducing the need for additional power generation capacity and grid enhancements. Such flexibility not only strengthens the resilience of the electricity system but also makes it easier to incorporate variable renewable energy sources, such as solar or wind, into the urban energy mix.

Global applicability: Innovative case studies

 District cooling’s adaptability is demonstrated in diverse climates and contexts, as can be seen with the following examples:

The promise of district cooling is clear, but it still faces barriers

While the promise of district cooling is clear, its widespread adoption still faces a series of significant hurdles. The most immediate challenge is the high upfront capital investment required to develop the infrastructure – central plants, insulated distribution networks, and energy transfer stations – that forms the backbone of any district cooling system. Unlike conventional building-level cooling, which can be installed incrementally, district cooling demands a coordinated, large-scale approach and substantial financing from the outset. This often makes investors and city planners wary, especially in markets where the long-term benefits are not yet fully recognised or valued.

Complicating matters further is the complex regulatory and stakeholder environment that surrounds urban infrastructure projects. District cooling systems are, by their nature, deeply embedded in the fabric of the city, interfacing with utilities, municipal authorities, private developers, and building owners. In many cases, the absence of clear, supportive regulations and long-term urban energy planning introduces uncertainty, slows down project initiation, and makes it harder to attract the necessary capital. The lack of standardised frameworks for integrating district cooling into city planning can also lead to missed opportunities for synergies with other sectors, such as heating, power, and water.

Another persistent barrier is the limited awareness and expertise among key decision-makers, from policymakers and urban planners to architects and engineers. Many stakeholders are unfamiliar with the technical and economic advantages of district cooling, or they may underestimate the system-level benefits it offers compared to conventional cooling. This knowledge gap can result in conservative choices that favour the status quo, even when district cooling would be more sustainable and cost-effective in the long run.

Integration with existing buildings presents its own set of challenges. Retrofitting older structures with individual cooling systems to be compatible with district cooling can require significant modifications, and building owners may be hesitant to undertake such changes without clear incentives or regulatory mandates. In cities with fragmented property ownership or rapidly changing urban landscapes, coordinating among multiple stakeholders to achieve the necessary scale can be especially daunting.

Massive opportunities to overcome challenges

Despite these challenges, the opportunities to overcome them are both practical and promising, especially from a political and regulatory perspective. Indeed, the most effective way to unlock the potential of district cooling is through focused, forward-thinking regulation and strategic urban energy planning. When governments establish clear policies that recognise district cooling as critical infrastructure, they reduce perceived risks for investors and utilities, making it easier to mobilise the capital needed for large-scale projects.

Long-term planning is equally vital. By integrating district cooling into master plans for urban development and aligning it with broader sustainability goals, cities can ensure that new neighbourhoods and business districts are designed to be “district cooling ready.” This proactive approach not only streamlines future expansions but also maximises opportunities for sector integration-leveraging waste heat, renewable energy, wastewater, and thermal energy storage to further boost efficiency and resilience.

Financial incentives and innovative funding mechanisms can play a decisive role in bridging the gap between initial costs and long-term benefits. Subsidies, tax breaks, concessional loans, and public-private partnerships have all proven effective in accelerating district cooling deployment in cities around the world. These measures can be particularly impactful when combined with requirements or incentives for new developments to connect to district cooling networks, ensuring a critical mass of users from the outset.

Raising awareness and building technical capacity are also essential. Governments and industry leaders can support targeted campaigns and training programs for urban planners, engineers, and policymakers, helping to demystify district cooling and highlight its advantages. As more professionals become familiar with the technology and its business models, the path to adoption becomes smoother and more predictable.

Ultimately, the transition to district cooling is not just a technical challenge but a question of vision and leadership. With the right mix of regulation, planning, incentives, and education, cities can overcome the barriers that have held back district cooling in the past. In doing so, they will unlock a powerful tool for sustainable urban growth- one that delivers economic, environmental, and social benefits for decades to come.

Conclusions 

District cooling is a proven, adaptable, and future-ready solution for urban cooling. By aggregating demand, leveraging local and renewable resources, and integrating across sectors, DC systems deliver unmatched energy, cost, and environmental benefits. Achieving near-zero emission cooling by 2050 is within reach-provided that policymakers, investors, and urban planners embrace DC as a key pillar of sustainable city development.