The twin challenges of a lower-carbon future and national energy security are focusing attention on the most effective means of energy generation in the built environment. Efficiency gains are offered by the distribution of heat from community heating and combined heat and power (CHP) plant, which is presently underdeveloped in the UK by comparison with continental Europe. Natural gas is the preferred fuel for most of today's district energy systems which are technically developed, but proposed schemes must be tested against CHP 'quality' Criteria to ensure there is not an increase in primary energy use compared to larger-scale central generation. Future district energy systems must aim to exploit local energy resources, such as biomass, wind and micro-hydro, and local thermal resources, such as solar collectors and ground source heat pumping. They may also incorporate novel forms of heat and power storage and load management. District energy schemes must be planned within a context of increasingly efficient buildings requiring less heat while the demand for electricity increases. In addition, local power schemes will have to meet future environmental requirements, for example for air quality where waste or biomass is combusted. (c) 2008 Queen's Printer and Controller of HMSO. Published by Elsevier Ltd. All rights reserved.