In order for economically viable distributed generation systems for local community to spread, it is essential to develop an efficient and low-cost heat supply system. We propose a new heat supply system called DREAMS (Distributed Residential Energy with Advanced Management System). The key technology for the system is to connect compact heat supply units installed in all the households of the local community, such as a condominium, by a single loop of hot water piping. Two methods to decrease the heat supply rate through the single loop are proposed in this paper. The one is an utilization of a compact heat supply unit with heat storage in each house. The momentary heat demand can be covered by the heat storage. The other is a tap water preheating. A new CO2 regenerative heat pump cycle was proposed for the recover of the low temperature heat from the generator. A new heat supply unit with a practical capacity was manufactured, and the heat supply performance was evaluated by some experiments. Furthermore, an advanced energy management system has been under consideration to realize the effective system operation by utilizing IT. In this paper, experimental results on the performance of the new heat supply unit, the new CO2 heat pump system and evaluation of the energy-saving effect of our DREAMS are presented.

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