The Cherokee Boiler House, a crumbling brick plant near downtown Denver, is filled with rattling pipes, hazard signs, and cockroach carcasses. Mayor Mike Johnston describes it as “a good place for a rave or potentially a horror movie.”
Yet city officials believe this decaying relic could anchor Denver’s most ambitious climate gamble: a $300 million underground thermal network designed to replace one of the world’s oldest operating steam systems — one that has heated downtown buildings since the 1800s. With a 2040 zero-emissions deadline approaching and steam bills more than doubling over the past decade, Denver is now pursuing a solution that runs, in part, on what flows through its sewers.
A century-old steam system running out of time
More than a hundred downtown Denver buildings are currently heated by what’s considered the world’s oldest continuously operating commercial steam system. When it launched in the late 1800s, newspapers called it a marvel of modern engineering. Today, it’s a liability.
The network burns natural gas and has grown leaky and inefficient over the decades. Customers’ steam bills have more than doubled over the past ten years, driven by rising maintenance costs, fossil fuel prices, and a slow exodus of customers. As fewer buildings pay in, costs spread across a shrinking base — a spiral that’s hard to reverse.
A 2021 city ordinance now requires large Denver buildings to cut greenhouse gas emissions or face potential penalties. For buildings locked into the aging steam network, meeting those targets may simply be out of reach. Buildings are Denver’s largest source of climate pollution, which puts the downtown core at the center of the city’s push to reach zero emissions by 2040.
How an ‘ambient loop’ would replace fossil fuels underground
The city’s response is a plan to build what it calls a thermal energy network — an “ambient loop” — connecting 11 city-owned buildings through underground pipes filled with circulating water. The water moves between buildings at relatively low temperatures, which is where the “ambient” label comes from.
Each building is fitted with water-source heat pumps, highly efficient appliances that transfer thermal energy from the water to either heat or cool a building’s interior. When a building runs too warm, its heat pumps pull heat from the air inside and release it into the circulating water. The process simply reverses when warmth is needed.
What makes the loop particularly efficient is that buildings share energy with each other. Excess heat from one building flows through the pipes to a neighbor that needs it — cutting down on how much energy the entire system must generate from scratch. The Cherokee Boiler House would serve as the central hub, managing and balancing the whole network. City officials call it the “brains and brawn” of the loop.
Drilling into the Earth for nearly free energy
As more buildings join the loop, it’ll need a reliable energy source to keep the circulating water at the right temperature. The city’s answer is to drill hundreds of geothermal boreholes beneath downtown parking lots.
These boreholes would reach more than 1,000 feet underground, where pipes exchange heat with the stable thermal mass of the Earth before returning to the loop. The Earth functions as a kind of battery — absorbing excess heat in summer, releasing it back in winter. Once the infrastructure is in place, that geothermal heat is essentially free to access.
The significant cost is upfront. Drilling deep into urban bedrock is expensive, and applying this model to a busy downtown core at this scale is relatively new territory for the United States — even though similar systems already operate on university campuses and in cities elsewhere around the world.
The unexpected ingredient: heat hiding in sewage
The plan also intends to capture thermal energy from Denver’s own sewage system — warm wastewater generated by showers, laundry, and everyday use that currently gets treated and discharged into the South Platte River.
The volume of heat involved is substantial. According to Dan Freedman, director of technology and innovation at Metro Water Recovery, Denver’s wastewater utility, the city’s sewage can contain roughly four times the heat used by buildings on the current steam system during peak winter demand. That heat is currently wasted.
Warm wastewater discharge also isn’t good for the river’s ecological health, and state environmental regulations will soon require the utility to cool it before release — a costly process on its own. A heat exchanger placed inside a major sewage line could siphon off that thermal energy for the loop, simultaneously solving the utility’s compliance problem and opening a potential new revenue stream. America’s largest sewer heat recovery system already operates nearby in Denver, suggesting the technology is proven.
Costs, timeline, and what success could mean nationally
The full network carries an estimated price tag of $280 million to $320 million over the next decade. Funding so far comes from city dollars and a state grant; bonds or private investment may be needed as the project scales. Despite the upfront cost, a 2025 feasibility report found the loop could be up to 75% cheaper than other decarbonization paths for the targeted buildings.
The city is starting cautiously. Within roughly two years, just two buildings and a sidewalk snowmelt system will pilot a small-scale version of the loop, with nine buildings targeted by 2030.
Mayor Johnston has said that if the pilot succeeds, the model could expand to thousands of natural gas customers near downtown — and potentially serve as a template for dense urban cores across the country. Denver’s geology, existing infrastructure, and regulatory environment are specific to this city, but the underlying technology isn’t. Other cities facing aging heating systems and looming emissions mandates will be watching closely to see if the numbers hold.
Carlos is an engineer with strong expertise in technical and industrial topics. He previously worked at international companies such as Siemens and speaks Spanish, German, English, and Italian.
