District Energy (or Cogeneration) is the simultaneous generation of two or more types of energy from a single fuel source.

District heating systems distribute steam or hot water to multiple buildings. The heat can be provided from a variety of sources, including geothermal, cogeneration plants, waste heat from industry, and purpose-built heating plants. 

District cooling systems distribute chilled water or other media to multiple buildings for air conditioning or other uses. The cooling (actually heat rejection) is usually provided from a dedicated cooling plant. 

The district energy industry is growing because district systems offer building managers a viable alternative to operating their own on-site boilers and chiller systems. Among the advantages of district energy systems are:

Efficiency: A central plant has a few large boilers that are more efficient than the operation of hundreds of small boilers in a district.

Air quality: Large central plants are better equipped to operate to air quality regulations than smaller plants, and cleaner air is the result. 

Fuel purchasing :District energy operators are central purchasing agents and negotiate lower fuel prices based on larger volumes. 

Multiple fuels: Most district energy facilities have two or more fuels available, offering more flexibility than on-site building managers can afford.

Reliability: District plants typically have standby energy capacity that can be used in cases of emergencies. This fosters greater reliability.

Building design: Building designers can offer more rentable space if they eliminate the space dedicated to boiler rooms, chimneys, cooling towers and chiller mechanical areas.

Hassle-free operations: Building managers who buy energy from a community system avoid the labor, maintenance, capital, regulatory and chemical-disposal costs related to managing on-site systems.