The variable-speed chiller has variable speed control and capacity control function of a compressor to minimize the mechanical loss in all operating ranges. Thus, the variable-speed chiller has a high COP feature in accordance with the thermodynamic property. The COP characteristic of the variable-speed chiller is different with that of the fixed-speed chiller. So, it has been considered that the conventional operating method is not appropriate to design and operate the heat source system with variable-speed chiller for business use. There also have been few reports about the heat source system with the variable-speed chiller, which uses the urban unutilized heat source. This report describes the validity and energy reduction effect of the variable-speed chiller by comparison of the energy consumption, which is calculated by numeric simulation, in case of urban unutilized heat source method (groundwater, swage water, river water, sea water) and general cooling tower method as cooling heat source in a heat source system with the latest fixed-speed chiller and a heat source system with the latest variable-speed chiller. The urban unutilized heat source method with the variable-speed chiller is more effect to reduce energy consumption than the cooling tower method with the fixed-speed chiller. Especially, effect of groundwater use is remarkable and the energy consumption is reduced by 50%. Even when energy reduction is not expected by the urban unutilized heat source method with the conventional chiller, the urban unutilized heat source method with the variable-speed chiller shows the reduction of energy consumption. These noteworthy results indicate that the variable-speed chiller is more effective in using urban unutilized heat source than the fixed-speed chiller due to the extremely low mechanical loss and the high COP characteristic in the small temperature difference between the evaporating temperature (the chilled water leaving temperature) and the condensing temperature (the cooling water entering temperature). In addition, by comparison of year-round energy consumption, the urban unutilized heat source usage is effective in summer and middle season, especially high reduction effect by groundwater, and cooling tower usage is effective in winter season by low wet-valve temperature and proper cooling tower control. In other words, when there is the cooling load throughout the year, it is suggested to use the urban unutilized heat source system in summer and middle season and cooling tower system in winter season. Consequently, the combination of the latest variable-speed chiller and the urban unutilized heat source is equivalent or more effective than the combination of the latest inverter chiller and the cooling tower regardless type of the urban unutilized heat source.