Heating and cooling includes a wide range of end-use applications and technologies. In the buildings sector, it includes cooking, water heating, ambient heating, ambient cooling and refrigeration. In industry, besides ambient heating and cooling, it also includes process heating — from low temperature applications (e.g. in the food industry) to high temperature applications (e.g. in the cement, iron and steel industries). Heating and cooling for residential, commercial and industrial purposes accounts for a large share of total final energy demand. For example, in the EU, heating and cooling in buildings and industry accounts for half of energy consumption (figure estimated by the European Commission)

Currently, demand for heating in buildings and industry outweighs demand for cooling. However, the latter is gradually catching up, especially due to increasing demand for air conditioning or refrigeration of food and medical supplies. For example, according to the EU, by 2030 the energy used to cool buildings across Europe is likely to increase by 72%, while the energy used for heating buildings will fall by 30% (Cited in The Guardian, 2015, 26 October, World set to use more energy for cooling than heating). Globally, energy demand for heating is projected to increase until 2030 and then stabilise. It is estimated that by about 2060 the amount of energy used worldwide in cooling will overtake that used in heating (Source: Isaac, M., van Vuuren, D.P., 2009. "Modeling global residential sector energy demand for heating and air conditioning in the context of climate change". Energy Policy 37, 507–521).

A recent IRENA report assesses district heating and cooling (DHC). DHC is defined as the centralised heating or cooling of water, which is then distributed to multiple buildings through a pipe network. DHC systems are primarily based on fossil fuels, with coal and natural gas meeting the bulk of demand. In 2014, renewable district heating represented just 1% of renewable energy use worldwide, while the contribution of renewable district cooling was insignificant. IRENA’s REmap analysis shows that the contribution of renewable district heat to total renewables use could increase to 3% by 2030 (3.4 exajoules); more than 90% of this potential is from bioenergy.

In addition to increased use of renewable energy, energy efficiency measures can contribute to more sustainable energy use by reducing the demand for heating and cooling. In buildings, efficiency measures include advanced construction and design techniques, enhanced insulation and better information and control of energy use with intelligent thermostats. In industry, energy for heating and cooling can be saved with energy-efficient technologies such as combined heat and power (CHP) units, and via energy management solutions and technologies. Sector coupling can allow surplus electricity to provide heating and cooling for buildings and industry.