The operators of the decades-old energy systems that heat and cool buildings in downtown Minneapolis and St. Paul have ambitious plans underway to reduce emissions.

The mostly hidden networks of insulated pipes connected to centralized heating and cooling equipment are known as district energy systems. They’ve long been championed as an energy efficient way to heat and cool campuses or downtowns, especially in cooler climates.

Many, though, are connected to fossil fuel facilities, and the systems’ high efficiency alone won’t be enough to help schools, cities, and companies meet their goals of eliminating greenhouse gas emissions by midcentury or sooner. Climate pledges by these institutional customers are now driving efforts to repower district energy systems with clean energy.

University district energy systems began initiatives to reduce emissions years ago and “now in the last five years we’re seeing a lot of emphasis on this from cities and towns,” said Rob Thornton, president and CEO of the International District Energy Association. 

In Minneapolis, Cordia Energy, the private company that operates the largest downtown district energy system, is replacing natural gas boilers with electric models. And in downtown St. Paul, officials are seeking federal funding for a project to recover heat from a wastewater treatment plant and reduce energy use for a system currently powered by electricity and biomass.

“We’re doing decarbonization at the rate that our customer base is asking for and we can economically withstand,” said Jacob Graff, Cordia Energy’s north region president. Customers connected to its downtown Minneapolis system range from stadiums and high rises to apartments and medical facilities.

From ancient Rome to skyscrapers

The concept of district heating has been around for centuries, with its roots in the networks of hot water pipes built in ancient Rome. Some of the first modern steam-based systems were built in New York in the 1880s. Today, the United States has more than 700 district energy systems heating and cooling buildings in downtowns, universities, medical campuses, towns and communities.

Cordia Energy’s Minneapolis system opened in 1972 to serve the 57-story IDS Center, still the tallest building in Minneapolis. Today, the steam and chilled water system manages seven plants that heat and cool the IDS and more than 100 other buildings, including U.S. Bank Stadium, Target Center, and the convention center.

Hennepin County owns and operates a much smaller district energy system, connected to a downtown trash incinerator, that primarily serves county buildings and Minneapolis City Hall.

District Energy St. Paul began in the early 1980s after then-Mayor George Latimer hired Swedish engineer Hans Nyman to replace the aging steam system with a hot-water central heating system. Latimer wanted to create a national model of district energy and he largely succeeded. District Energy St. Paul has the largest hot water system in the country, with more than 200 buildings.

Together, the two systems serve some of the state’s biggest buildings, which have emerged as the largest source of greenhouse gas emissions in both cities. In Minneapolis, 65% of the emissions are from commercial, multifamily and industrial buildings. St. Paul’s data is similar.

Tapping clean electricity in Minneapolis

Cordia plans to reduce emissions from its Minneapolis system by 30% by 2030 before reaching net zero by 2050. Xcel Energy’s green tariff program will offset around half the electricity Cordia uses this year, and it wants to buy more credits if they become available.  

The company is replacing older engine-driven chillers with electric models at the former Dayton’s department store, where it has operations. Chillers modulate the temperature inside buildings and can be powered by electricity or natural gas. Geothermal is another potential solution being studied.

A potential geothermal project “hasn’t cleared the economic hurdles yet,” Graff said. “I think we’ll eventually get there.”

Minneapolis customers are not alone in seeking to reduce emissions from district energy systems, Graff said. San Francisco will be Cordia’s first system to decarbonize using hydropower from a dam the company owns in Yosemite National Park.

St. Paul looks to waste heat recovery

Downtown St. Paul’s district heating system is owned and operated by a company called District Energy, which recently worked with the city and the regional planning agency on a $152 million U.S. EPA grant application to tap heat from a regional wastewater plant for the city’s system. It would include a project with Xcel Energy to pay for an electric boiler and hot water storage. 

District Energy president and CEO Ken Smith said half the system already has been decarbonized through biomass, solar thermal and renewable energy credits. An analysis showed that recovering heat from the Metro Wastewater Treatment Plant, which manages 170 million gallons of water daily, could produce 60 megawatts of thermal energy, and heat pumps could lift the temperature up to the system average.

If District Energy receives the Climate Pollution Reduction Grant, the system would go live in 2028 and allow District Energy to provide 92% of energy from carbon-free or carbon-neutral sources, far ahead of its goal of net zero by 2050.

“This certainly would be able to accelerate that by 30 years,” Smith said. “From everything we’ve seen, there’s nothing like this, certainly not in the United States, and I don’t believe there’s anything like it at this scale in Canada, either.”

St. Paul Resilience Officer Russ Stark said District Energy’s emissions represent a small portion of the total greenhouse gases in the city. Still, around 50,000 tons of carbon would be eliminated annually, and that’s “very impactful,” he said.

The wastewater project would allow District Energy St. Paul to expand to more buildings, decarbonizing them in the process, Stark said. Adding clients “is not a simple process but we’ve been talking a lot about that being an exciting part of the project,” he said. “I don’t know how many major city downtowns there are where there’s an opportunity to largely decarbonize most of the downtown in the way that we can.”

Systems face unique, local challenges

A one-size-fits-all solution for decarbonizing district energy systems doesn’t exist, as most are unique based on customers and geography. Not all can be inexpensively retrofitted for electricity, and the ongoing office and commercial real estate fallout from the Covid-19 pandemic adds risk to financing projects.

Thornton, of the district energy association, said electricity pricing can escalate quickly, especially in summer, creating uncertainty in the market. New technology may require more space, different controls and significant staff training. Federal policy remains unclear about what parts of a district energy system would qualify for tax incentives, he said.

Graff ticks off many challenges in decarbonizing Cordia’s Minneapolis operations. Geothermal works well on campuses and in low-slung neighborhoods where the problem of sending steam to the 50th floor of a skyscraper does not exist, Graff said.

There’s not a simple clean power source like natural gas that has the energy density to create and push steam through a network, he said. To illustrate the point during a tour of Cordia’s downtown plant, he pointed to a pipe with a modest circumference and said the natural gas flowing through it provided the heating for much of the system.

Electrification may be a goal of heating and cooling, but offsetting it with clean power is daunting. Cordia would have to install heat pumps capable of drawing more than 400 megawatts from a clean energy source, which would be no small feat, Graff said.

Hydrogen sounds promising but has no track record yet for supplying an entire downtown district energy system, Graff said. Biomass has potential, too, but sourcing enough it to service a sprawling district energy system reliably remains difficult.

Battery storage, microgrids and other technologies could all play a role, but each brings issues ranging from cost to a lack of testing in a district energy environment, at least at the size of the downtown Minneapolis system.

“We have the economy of Minneapolis in our hands, and regional economics depend on downtown Minneapolis,” Graff said “We need a reliable infrastructure that people can count on that can be delivered economically, and it’s our responsibility to do that.”

In Twin Cities and beyond, district energy systems see pressure to cut carbon emissions is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.