A transition to modern district energy systems could contribute to 60 per cent of required energy sector emissions reductions by 2050, and reduce primary energy consumption by up to 50 per cent, according to a new report launched today by the United Nations Environment Programme (UNEP) in collaboration with the Copenhagen Centre on Energy Efficiency (C2E2), ICLEI - Local Governments for Sustainability, and UN-Habitat.

With cities accounting for 70 per cent of global energy use and for 40-50 per cent of greenhouse gas emissions worldwide, District Energy in Cities: Unlocking the Potential of Energy Efficiency and Renewable Energy, reveals how local authorities and national governments can develop energy-efficient, and climate-resilient district energy systems as one of the most cost-effective solutions for reducing greenhouse gas emissions and primary energy demand, and for helping to keep global temperature rise to two degrees Celsius above pre-industrial levels.

District energy systems can also contribute to the green economy transition through cost savings from avoided or deferred investment in power-generation infrastructure and peak capacity wealth creation through reduced fossil fuel expenditure, local tax revenue and employment. District energy systems - which pipe steam, hot water or cold water around a city from a central location for use in buildings - are being used in a variety of cities worldwide because of their higher energy efficiency which can significantly reduce the greenhouse gas emissions of cooling and heating. This can result in improved air quality, and, where district systems use renewable power sources, reduce reliance on fossil fuels and energy imports, increasing the resilience of cities to fuel price shocks.

The city of St Paul, Minnesota, USA, for example, uses district energy fuelled by municipal wood waste to displace 275,000 tonnes of coal annually and to keep US$12 million in energy expenses circulating in the local economy. And in Toronto, Canada, the extraction of lake water for district cooling reduces electricity use for cooling by 90 per cent, earning the city US$89 million from selling a 43 per cent share in its district energy systems, which it could use to fund other sustainable infrastructure development.

To facilitate the transition to modern district energy systems, UNEP has launched a new initiative on District Energy in Cities, as the implementing mechanism for the SE4ALL District Energy accelerator. As part of this initiative UNEP has developed a policy and investment road map comprising of 10 key steps to accelerate the development, modernization and scale-up of district energy in cities.

A decision tree, developed as an outcome of this publication and of the exchanges with the 45 champion cities, will guide cities through these various stages and highlight tools and best practices that could be available to local governments in their roles as planners and regulators, facilitators, providers and consumers, coordinators and advocates. Twinning between cities - matching champion ones with learning ones - will be a key component of the new district energy initiative led by UNEP.