There are several benefits to district heating systems. The system design requires knowledge of community peak heating load and annual heating energy requirements. For this purpose, a residential energy model was developed using several energy usage databases. Hourly, peak, and annual heating demands were estimated by simulating 15 archetype houses using an hour-by-hour building simulation program, ENERPASS. Estimated heating profiles from model houses were used to design a district heating system for a hypothetical rural community in Nova Scotia. The findings show that building simulation is a very flexible and valuable tool in identifying the required peak and hourly energy demand of a community for the design of district energy system, and biomass district heating system can reduce community greenhouse gas emissions.