Residential development with centralised district heating system

Location: Temuco, Chile

Population: 262,530 [Metropolitan area]

Climate: Mediterranean

Duration: 2010-N/A (completed)

Sector: Building

Funding sources: Private

City networks: N/A

Savings: Energy consumption for heating supply reduced by 90%.

Solutions: Centralised district heating system using geothermal energy installed.

Multiple benefits: Residents’ heating expenses and air pollution reduced.

In a district of Temuco, Southern Chile, a private real estate agency developed a series of residential buildings with energy-efficient technologies, which resulted in a significant reduction of energy consumption.

Objective – To construct a district composed of buildings, which align with European standards of energy efficiency.

Solutions – During the project 34 residential buildings were constructed, each with a floor area between 156 and 235 m2 following high standards of energy efficiency (e.g. heating consumption at the level of 27 kW h/m2 per year).  Buildings were connected to a centralised district heating system using geothermal energy for the supply of heat and hot water.

Funding – The total budget for the project was 180mln Chilean Pesos (equivalent to USD 352,706[1]). The private real estate agency Frankfurt Inmobiliaria provided the funds for the project.

Innovation – The mainstream energy source for heating in Temuco is wood fuel, while the buildings part of this project use centralised district heating system powered by geothermal sources. Thus, Barrio Frankfurt leads a shift from mainstream heating sources to district heating with integrated renewable energy sources. This is the first project to use this type of technology in South America.

Success factors –The growing prices of wood, liquid gas and kerosene have a potential impact on the choices of consumers. As the wood fuel is the cheapest energy source available in the area, it is also the most popular one among the residents. Consequently, the air quality is compromised, as utilisation of wood fuel causes 93% of the air pollution during winter months in Temuco [source]. As the plans and actions of the municipality target air pollution, the development of the project profited from the local political commitment towards sustainable energy solutions.

Significant outcomes:

  • Energy consumption for heating purposes reduced by 90% in comparison to the residential buildings in other districts of Temuco;
  • Heating expenses for the users reduced in comparison to the residential buildings in other districts of Temuco;
  • Long-term air pollution reduced;
  • Safety and privacy for the users increased.

Synergies with local policies:

  • Local Energy Strategy (Estrategia Energética Local) (EEL) for Temuco regarding public, private and housing sectors has as main priority the development of other districts using energy-efficient technologies. The strategy specifically targets energy efficiency with 3 objectives:
    • To have a maximum consumption of 80 kWh/m2 by 2020;
    • To improve the energy systems of at least 20% of current buildings by 2020 (baseline: year 2016);
    • To reduce 10% of the projected energy consumption by 2020 (baseline: year 2016).

Political alignment:

  • NDCs state the national Chilean goals of reducing 20% of energy consumption by 2025 and of designing of a long-term energy development strategy (in comparison to Business as Usual). The Ministry of Energy supported these goals by releasing the Energy Agenda for Chile. It also aims at creating a favorable market for energy NAMAs;
  • Energy Label for Buildings labels residential buildings in energy categories according to their efficiency to inform the consumers and to encourage the building sector to implement more efficient technologies;
  • Energy Efficiency Guarantee Fund – FOGAEE (Fondo de Garantía de Eficiencia Energética), by the Chilean Agency for Energy Efficiency with financial instruments from Global Environment Facility and Inter-American Development Bank, supports energy-efficient projects in various sectors, including buildings;
  • Law 20.365 (Ley 20.365) guarantees financial support for the development of sustainable housing projects.


  • Other two residential housing projects with the same innovation implemented by Frankfurt Inmobiliaria;

Potential for implementation of other energy efficiency projects for residential housing according to the priorities stated in the EEL.

[1] Exchange rate based on the average conversion rate between CLP-USD of 2010, available at:

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Sectors: Buildings, District energy

Country / Region: Chile

In 1 user collection: Good practices of cities

Knowledge Object: User generated Initiative

Published by: Casas Rucantu