Built in 1932 by the architect Manuel Sánchez Arcas and the engineer Eduardo Torroja Miret, it is an architectural jewel in the rationalist style and was awarded the National Architecture Prize in 1932. The purpose of the thermal power station was to generate thermal energy for the buildings of the University City, making it a pioneering example of the use of central heating. For all these reasons, under the new Cultural Heritage Law it has been declared a Site of Cultural Interest in the category of Industrial Site.
The thermal power station was part of the University City project in Madrid. Its development began in the 1920s under the orders of King Alfonso XIII, modelled on university campuses in the United States.
With the intention of distributing heat through the university buildings by means of ducts, the plant was built, influenced by buildings like the Power House at Harvard and the Heating Plant at Berkeley. Its brick exterior has a flat roof, with horizontal and vertical strips of windows. The station was later extended by Alfonso García Gordillo in 1975.
During the Civil War, it was badly damaged. When the war ended, Torroja was commissioned with its reconstruction, following the original plans so that it would look exactly as it had originally been designed. It was reopened on 12 October 1943.
Throughout its history, the heat source has been changed from coal to diesel and from 1975 to natural gas, which is still in use today.