Beneath Punggol in northeastern Singapore, the world's second-richest country by GDP per capita in 2025 according to The Economist, a five-kilometer network of pipes circulates chilled water to cool buildings above ground.

Known as district cooling, the system uses centralized plants to produce chilled water that is distributed through underground pipelines. The approach consumes less electricity than conventional air-conditioning systems, an important advantage for Singapore, which imports most of its energy, according to Bloomberg.

The city-state has installed district cooling networks in at least eight districts. Its Marina Bay facility, which began operating in 2006, is the world's largest underground district cooling system. Additional buildings are being connected to the network, while new projects are being developed elsewhere in the city.

The technology is attracting growing interest as Singapore seeks to improve energy efficiency and adapt to a warming climate. Temperatures in the city-state are rising about twice as fast as the global average, increasing demand for cooling in homes, offices and commercial buildings.

A distrist cooling system. Photo courtesy of Singapore Institute of Technology

Engie, one of the world's largest district cooling operators, runs two cooling systems in Punggol that serve around 8,000 public housing units. It estimates Singapore's district cooling market could double over the next decade from its current capacity of about 323,000 refrigeration tons.

It also expects district cooling capacity across Singapore, Malaysia and the Philippines to double over the same period.

Singapore has one of the highest rates of air-conditioner use per capita in the Asia-Pacific region. While air conditioning helps residents cope with rising temperatures, it also increases electricity demand and contributes to greenhouse gas emissions, creating a cycle of growing energy consumption.

To encourage more efficient cooling, authorities have recently advised maintaining indoor temperatures at 25 degrees Celsius in government facilities, offices and homes, according to The Straits Times.

The government has also committed around SGD100 billion ($77 billion) to long-term measures aimed at protecting the city-state from rising temperatures and sea levels. District cooling is part of that broader climate adaptation strategy.

The system works by cooling water at a central facility and circulating it through underground pipes to buildings, where it helps cool indoor air. The water is then returned to the facility to be chilled again and reused. The concept dates back more than a century. According to academic research, one of the first district cooling systems was installed in Denver, Colorado, U.S., in 1889 using ammonia or brine solutions.

Brian Vad Mathiesen, a professor specializing in energy systems at Aalborg University in Denmark, told Bloomberg that district cooling systems can reduce electricity consumption by 30% to 50%. However, he noted that building the networks can cost hundreds of millions of dollars depending on their scale.

The systems also face challenges. District cooling requires substantial water resources, potentially increasing competition for supplies as data centers expand and water scarcity becomes a growing concern in many parts of the world.