District Energy refers to both district heating and district cooling systems. The fundamental idea of district heating is to use local fuel or heat resources that would otherwise be wasted to satisfy local customer heat demands by using a heat distribution network of pipes as a local marketplace.

This idea contains the three obligatory elements of a competitive district heating system:
a) suitable low-cost heat source, 
b) the heat demand/market,
c) the pipes as a connection between source and demands. 

These three elements must all be local in order to obtain short pipes for minimizing the capital investment in the distribution network. Suitable heat demands are space heating and preparation of domestic hot water for residential, public, and commercial buildings. Low-temperature industrial heat demands are also suitable, typically defined as the industrial heat demands that require 100 degrees Celsius or less. Traditional excess heat resources are combined heat and power (CHP) plants, Waste-to-Energy (WtE) plants, and industrial processes. During recent decades, some renewable heat from geothermal wells, solar collectors, and biomass fuels have been introduced into the global district heating systems. Thus District Heating provides a substitution of ordinary primary energy supply for various societal heat demands, while achieving lower environmental impact. Established expertise of district heating has paved the way for introduction and deployment of district cooling systems, mainly for covering space cooling demands in buildings. However, this district cooling development has been more recent compared to the development of district heating. District cooling systems are therefore neither as common nor as extensive as district heating systems (Werner, 2017, 2004).

Werner, S., 2017. International review of district heating and cooling. Energy 137, 617–631. https://doi.org/10.1016/j.energy.2017.04.045

Werner, S., 2004. District Heating and Cooling, in: Cleveland, C.J. (Ed.), Encyclopedia of Energy. Elsevier, New York, pp. 841–848. https://doi.org/10.1016/B0-12-176480-X/00214-X