This paper reports energy conservation of a heat source system equipped with the latest variable-speed controlled centrifugal chiller Inverter turbo) when the heat source system applies to air conditioning system, which removes sensible and latent heat of cooling load in different processes. When the chilled water is supplied only to remove the sensible heat of cooling load, the chilled water supply temperature can be set higher than that of the conventional air conditioning system. Consequently, the energy conservation effect of heat source system is evaluated quantitatively for the case of higher chilled water temperature using the dynamic simulation method which can calculate the load of sensible and latent heat separately.