The system operates by using a chiller to cool water to a desired temperature, usually between 4-7°C. The chilled water is then distributed through a network of pipes to air handling units (AHUs) or fan coil units (FCUs) that are responsible for air conditioning spaces within the building. The water absorbs heat from the air, thus cooling the environment. The warmed water is then returned to the chiller to be cooled again, creating a continuous cycle.