The concept comes from Patrick Mazza, research director for Climate Solutions. He writes,
"Installing advanced new energy technologies while building transit-oriented developments will yield multiple efficiencies. TODs entail construction of dense neighborhoods. Compact communities are ideally served by district plant and piping systems supplying hot water and building heat. Economies of scale make district systems significantly more energy efficient that single building systems. District energy plants can also cogenerate electricity, and be powered with renewable fuels such as biomass or ground heat.
Other renewable electrical generators are also more economically installed at a district scale – It costs less to install one large solar array to serve a neighborhood than solar panels on individual buildings. District-scale cogeneration and solar arrays might serve electric vehicle charging stations as well.
When new construction is underway is the economically optimal time to install new energy networks including district energy, smart grid and vehicle charging. Infrastructure costs less when it is built in a coordinated way, doing as much as possible at once."