Cooling in a centrifugal compressor can improve the performance and reduce the impeller temperature. In a centrifugal compressor, external walls can be cool down, which is known as the shell cooling. This method avoids undesirable effects induced by other cooling methods. Cooling can be applied on different external walls, such as the shroud, diffuser or the back plate. This paper focuses on seeking the most effective cooling place to increase the performance and reduce the impeller temperature. It is found that shroud cooling improves the compressor performance the most. Shroud cooling with 2400 W of cooling power increases the pressure ratio by 4.6% and efficiency by 1.49%. Each 500 W increase in the shroud cooling power, increases the efficiency by 0.3%. Diffuser cooling and back plate cooling have an identical effect on the polytropic efficiency. However, back plate cooling increases the pressure ratio more than diffuser cooling. Furthermore, only back plate cooling reduces the impeller temperature, and with 2400 W of cooling power, the impeller temperature reduces by 45 K.