There definitely are economies of scale for heating and cooling, and doubly so when you're generating electrical power as well; this is known as "cogeneration"

There definitely are economies of scale for heating and cooling, and doubly so when you're generating electrical power as well; this is known as "cogeneration" or "combined heat and power". Generating electrical power inherently generates waste heat as well, and a perfect use for this heat is generating steam and/or running an absorption chiller. The canonical example is the combined heat/power/chilled-water plants often found in university campuses. There's a gas turbine, usually running on natural gas, and its hot exhaust gas is used to make steam. The chilled water is usually generated by variable-speed centrifugal chillers, which are remarkably efficient machines compared to smaller-scale refrigeration systems. Nowadays, there's centrifugal chillers that don't even need oil in the refrigerant to lubricate the bearings because the bearings are active magnetic bearings (like in turbomolecular vacuum pumps and uranium enrichment centrifuges): the shaft with the turbine/motor is made to levitate and a computer actively controls its position to micrometer accuracy. Oil-free magnetic bearings not only eliminate a source of frictional loss but also allow for more efficient heat transfer in the heat exchangers (https://mnashrae.org/downloads/Presentations/magnetic_bearing_oil_free_technology_mn_ashrae.pdf https://mnashrae.org/downloads/Presentations/magnetic_bearin...) because there's no oil to provide unwanted insulation between the copper surface and the refrigerant inside. Since a single entity controls the buildings and the utility tunnels alike, there are steam and chilled water pipes going to every building. In each building the steam is passed through heat exchangers to heat potable/domestic hot water and also heat hot water that'll be used for heating air. (It's also possible to have a single-phase system where no steam is generated at the central plant -- just hot water; apparently there are efficiency gains from doing so). The chilled water is directly used for cooling air. Equipment that needs heating or cooling can be plumbed into the facility's heating hot water or chilled water systems, rather than requiring their own (smaller and less efficient) heating or vapor-compression refrigeration systems. The electricity generated on-site might be somewhat more expensive than grid rates since your utility's large-scale generation facilities are hopefully more efficient. In exchange, the waste heat from the generation process -- which would otherwise be discarded -- will keep your buildings and equipment warm for free (well, for the cost of moving steam / hot water around and maintaining the system). You can be clever and throttle your gas turbine based on the facility's instantaneous electrical / chilled-water / steam requirements (and even import power from the grid if it's economical); or run the chillers a bit more than necessary overnight (and store the chilled water in tanks) so during the day there's less load required on the system.