Domestic Hot Water (DHW) is the water used for hand washing, dish washing, showers and other similar purposes. DHW is separate from the main heating system water (if present) in a building as the water must be potable and once used it leaves the buildings via the drainage systems, typically returning to municipal sewer systems.
Several aspects of the DHW system design impact the energy used to heat this water, Distribution System being one. The configuration of the distribution system determines the heat losses from the water between the point of generation and use. These losses must be counter acted by the generation system, using more energy.
cove.tool refers the standard NEN 2916 Energy Performance of Non-Residential Buildings Determination Method for the calculation of DHW distribution system impact on energy use. This allows three inputs types described here:
Taps within 3 meter (10 ft) of Heat Generation
This is the best case where distance from generation to use is minimized and so are energy losses.
System Efficiency input is 1.0
Taps further than 3 meters (10 ft) of Heat Generation
This is most typical is small to medium buildings and has some losses increasing energy use
System Efficiency input is 0.8
Circulation System or Unknown
This is typical for large buildings and is the most conservative input with the highest losses.
System Efficiency input is 0.6
For information on the Domestic Hot Water Demand see this article