A three-way valve is the basis for the most common way to supply individual coils off a main hydronic loop. The valve opens on a signal from the thermostat, diverting a portion of the water through the coil. In a VAV system, the coil will be a hot-water reheat coil. During the cooling season, cold air is distributed to the branch ducts through a single duct system. The airflow and air temperature modulate to provide the proper volume and temperature of air to a space. Exterior zones will not need to warm the air, as the building envelope load places a high thermal burden on the HVAC system. Interior zones, however, will have only the heat generated by people and equipment to offset, so the air supply may need to be tempered to maintain a comfortable environment.
In the heating season, the converse occurs. Moderately warmed air is delivered to all the VAV boxes, so that no reheat is required for the interior zones. Exterior zones, which have a greater burden because of the envelope load, may need additional warming of the air supply. Ideally, the system will be configured to maximize the heat transferred to the air at the central air handler, as the efficiency of small remote coils is less, and there are losses from the hydronic loop and the branch piping.
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Excerpt from Energy Conservation Projects.