Heat pumps in district in energy systems: A winning mix

By Keith Bate


The North American heat pump market is experiencing unprecedented growth. The majority of these are air source heat pumps for single-family homes and multi-family residential buildings. Growth is being driven by increasing awareness of carbon emissions, government policy and incentives, and the increasing need for cooling in our homes.

Heat pumps with much larger capacities also have a significant role to play in the decarbonization of new and existing district energy (DE) systems. Integrating heat pumps with district energy can offer many benefits when compared to individual building systems.


What is a heat pump?

At the most basic level, a heat pump moves heat, or thermal energy, from one place to another using a refrigeration cycle. The residential heat pumps mentioned have an indoor unit connected with refrigerant piping to an outdoor unit. The compressor is generally located in the outdoor unit. The heat pump is reversible, moving heat from inside to outside in cooling mode and moving heat from outside to inside in heating mode.

DE systems use a network of water piping, usually but not always buried, to transfer heating and/or cooling from a centralized location, usually referred to as an energy centre, to individual buildings. Heat pumps for DE applications all therefore transfer thermal energy to or from a water loop and fall into three categories:

Air Source Heat Pumps

Most air source heat pumps (ASHPs) have two-pipe connections and can produce either chilled water or heating water, rejecting heat to the outside air or extracting heat from the outside air respectively. Think of a two-pipe ASHP as a reversible air-cooled chiller.

Four-pipe ASHPs are also available and can produce both at the same time and recover heat between the systems.

Water To Water Heat Pumps

Water to water heat pumps (W2WHPs) cool one water loop and use that thermal energy to heat another water loop. A W2WHP is very similar to a water-cooled chiller but operates with a larger supply temperature difference between the two loops, referred to as the lift.

Water Source Heat Pumps

Water source heat pumps (WSHPs) heat or cool air, extracting heat from or rejecting heat to a water loop respectively. Small WSHPs are a widely used solution for heating and cooling of commercial and residential buildings where the piping system is usually referred to as a condenser loop.

The efficiency of a heat pump is quantified by the coefficient of performance (CoP). The CoP is the ratio of the heating or cooling energy produced to the electrical energy used. CoPs are generally in the range of 2 to 6, and if a heat pump is producing both useful heating and cooling CoPs can start to approach 10. A larger difference in temperature between the two sides of the heat pump generally results in lower CoP as the heat pump works harder to move the energy. Each heat pump has a maximum lift, as well as limits on operating temperature on both sides.


Generations described

The evolution of district heating (DH) has gone through three generations since its introduction. It is characterized by the type of transport media and the network temperature levels: the 1st generation DH system is a steam-based system; the 2nd generation DH uses high network supply temperature above 100°C; and the 3rd generation DH represents the current DH system with medium network supply temperature between 80°C to 100°C. Up until now, the 4th generation DH as the low temperature district heating (LTDH) is emerging as a new system, which is going to replace the existing 3rd generation DH system.


DE system generations

DE systems are often categorized by generations. While heat pumps can be integrated with 3rd generation DE systems, they are most widely used for 4th generation systems. There are two types of 4th generation DE systems that use heat pumps. The first has the heat pumps located in a centralized energy centre from where heating water and, if cooling is provided, chilled water is distributed to customer buildings. The second is what is referred to by the International Energy Agency (IEA) document as a thermal source network (TSN), also known as an ambient network system.


DE systems with centralized

As defined in the IEA document, 4th generation systems operate below 70°C. This is hot enough to heat domestic water to the 60°C temperature needed to prevent legionella growth, yet low enough that heat pumps can be used to produce heat. Many new DE systems in North America provide both heating and cooling. Heat pumps are a perfect fit for this type of system. W2WHPs can be used to simultaneously produce both heating and chilled water and recover energy between the two systems. W2WHPs can also be used to capture low grade sources of heat to produce useful heating water. Sewer heat recovery is an example of this, which is seeing increasing adoption for DE applications. Sewer temperatures are generally in the range of 15°C to 25°C all year, allowing for W2WHP CoPs of three to four when providing heating water at 60°C to 70°C.

Large bodies of water, including rivers, lakes and the sea, can also be a source of thermal energy for a W2WHP. These same heat sources can be used as a heat sink for cooling, resulting in very high heat pump CoPs in cooling mode. Most commercially available air source heat pumps cannot provide heating water above 60°C, at lower outdoor air temperatures heating water temperatures are generally limited to around 40°C. This is a result of the maximum lift described above. For centralized heat pump DE systems, ASHPs can be used to produce low temperature water at around 30°C as the heat source for a W2WHP, which would then produce the higher temperature water needed by the DE system.



From 2025, under the Montreal Protocol, only heat pumps using refrigerants with a Global Warming Potential (GWP) below 750 will be available in North America. Most equipment suppliers are currently using HFO refrigerants but as regulations are further tightened in the future, we can expect to see equipment using natural refrigerants such as CO2, propane and ammonia, which are currently mainly used for industrial and process applications.

  • Have a lower risk of refrigerant leaks, which are a source of chemical pollution and GHG emissions.
  • Will be professionally maintained and operated, which is critical to achieve effective and efficient long-term operation.


Source low-grade heat

There are many benefits to integrating heat pumps with district energy systems rather than having individual heat pumps for each building.


Heat pumps integrated with DE systems:

  • Can access and negotiate agreements with sources of low-grade heat, which are not generally viable for individual buildings, such as municipal sewers or data centres.
  • Are able to share energy between buildings, so that heat rejected from cooling in one building can be a heat source for another.
  • Can achieve economies of scale, both by using less but larger equipment, and by reducing total plant capacity by accounting for diversity between individual building peak demands


Thermal Source Network

A TSN has a single set of distribution piping operating with  a wide temperature range which is generally close to the external air temperature, hence the term ambient. Each building connected to a TSN utilizes heat pumps, which either extract heat from the loop to provide heating or reject heat to the loop to provide cooling. Heat pumps can be either W2WHPs, providing heating and chilled water to serve terminal units such as fan coils, or WSHPs, providing conditioned air directly to occupied spaces.

One of the benefits of a TSN is that several different solutions can be used to maintain the temperature of the network within the design range. Low-grade heat sources, such as geo-exchange, sewer heat recovery, and waste heat from industrial processes or data centres, are all viable options.

With thanks to our sponsors