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Supplying several buildings, blocks of flats or even entire cities with cost-effective and environmentally friendly heat for heating and hot water – this is made possible by district heating. With this type of heat generation, hot water is not produced on site in the building itself, but in a central power or heating plant nearby.
In this blog, you’ll find out how district heating works, what advantages and challenges it presents, and what role it may play in the future of heat supply. The following chapters will give you a comprehensive overview:
District heating refers to the centralised generation of heat, which is distributed to numerous buildings via an extensive, well-insulated pipework system. In contrast to the local provision of heat – for example, by individual boilers in each house – the energy required for district heating is produced in large combined heat and power plants or energy centres. From there, the heat generated is transported directly to connected consumers in the form of hot water or steam via thermally insulated pipes. The pipe system is usually laid underground, although in some cases – for example, due to structural obstacles – it may be installed above ground.
District heating therefore differs fundamentally from decentralised heating solutions: while the energy for local systems is generated on site, district heating relies on a bundled, efficient supply for entire neighbourhoods, districts, or even cities. The technical basis is a closed network that enables a continuous and reliable supply of space heating and hot water.
Compared to local heating, which typically supplies smaller areas or individual settlements, district heating is characterised by a larger spatial range and greater network complexity. However, both systems follow the same principle of centralised heat generation and distribution.
As part of modern heating networks, district heating is a central component of urban energy infrastructure. It enables the integration of various energy sources – from fossil fuels to industrial waste heat and renewable energies – and plays an important role in delivering a sustainable, future-proof heat supply in densely populated regions.
The district heating supply is based on a clearly structured technical process that extends from centralised heat generation to heat transfer in the building. The focus is on efficiency, reliability, and safe transmission of the energy generated.
Core components of a district heating network at a glance
With this technical infrastructure, district heating ensures an efficient, safe and convenient supply of space heating and hot water to buildings - especially in urban areas and larger properties.
The heat is mainly generated in large combined heat and power plants or cogeneration units. Typically, combined heat and power (CHP) is used, in which the combustion of fuels - such as natural gas and biomass - produces electricity and usable heat at the same time. Waste incineration plants and industrial waste heat are also utilised as sources. The resulting heat is provided in the form of hot water or steam, which is used for transport to the district heating network.
The hot water or steam is transported to connected buildings via a widely branched, underground pipework system – the so-called primary network. The pipes are highly insulated to minimise energy losses during transmission to the consumer. The distance between producer and consumer can span several kilometres, with modern pipe systems ensuring particularly efficient transport.
Modern district heating networks are increasingly relying on pre-insulated plastic pipe systems made of polypropylene (PP-R and PP-RCT). These pipes offer a number of technical advantages:
The building is connected to the district heating network via a house connection pipe. The central component within the building is the district heating transfer station. It is responsible for transferring the supplied heat to the in-house heating system, usually through heat exchangers that hydraulically separate the district heating circuit from the internal heating circuit. The transfer station regulates the pressure, temperature, and flow rate, and measures the amount of heat supplied for billing purposes. Safety and control devices ensure trouble-free and safe operation. The cooled water in the district heating pipe is then transported back to the CHP plant via the return pipe to be reheated.
District heating can be categorised according to the energy source used. The choice of energy source plays a significant role in determining the economic and ecological balance of each district heating network.
Traditionally, the majority of district heating supplies have been based on fossil fuels such as natural gas and coal. These fuels are burnt in centralised combined heat and power (CHP) plants to generate heat and often electricity as well. Fossil fuel-based district heating is widely used but is increasingly targeted for decarbonisation due to its significant CO₂ emissions.
The proportion of renewable energies in district heating networks is growing continuously. The most important renewable sources include:
The integration of industrial waste heat offers further significant potential. Many industrial processes generate surplus heat that cannot be fully utilised on site. If this waste heat is fed into the district heating network, the demand for primary energy is reduced and the overall efficiency of the system increases. The utilisation of industrial waste heat is an important building block for the sustainable transformation of the heat supply.
District heating is a central component of modern heating networks and plays a key role in the transformation of the energy supply. The technology offers numerous advantages, but also faces specific challenges that should be taken into account when making decisions.
District heating offers an impressive combination of technical efficiency, sustainability, and user comfort. At a glance:
Despite all the advantages, there are also relevant challenges that should be considered when deciding in favour of district heating:
The international district heating market is growing dynamically and is a key building block for the decarbonisation of urban infrastructures. According to Fortune Business Insights, the global market volume was around USD 168 billion in 2023 and is expected to rise to over USD 241 billion by 2032. Future Market Insights even forecasts an increase to around USD 340 billion by 2033, which corresponds to an annual growth rate of around 5.6 %. This growth will be driven primarily by urbanisation, rising energy prices and global political pressure to reduce CO₂ emissions. While Europe is currently leading the way, the Asia-Pacific region - particularly China and Japan - and North America are also recording significant growth. In countries such as Denmark, Sweden and Iceland, district heating already covers a large proportion of urban heating requirements. In China, millions of new households are connected to centralised heating networks every year in order to increase energy efficiency and improve air quality in urban areas.
Governments around the world are setting ambitious targets for the expansion of climate-neutral heating networks. In Europe and North America, programmes such as the EU Green Deal and national support funds are ensuring the modernisation and decarbonisation of existing networks and the construction of new district heating systems. In China, centralised heating networks are being massively expanded in order to reduce dependence on coal and combat air pollution. Centralised heating solutions are also being promoted in Japan and South Korea in response to high import dependency and urbanisation pressure. The regulatory framework specifically promotes the integration of renewable energies and the utilisation of waste heat.
The USA and Canada are investing in pilot projects for hybrid grids with solar, biomass, and geothermal energy. In Denmark, large solar thermal plants with seasonal storage are being built. In China, heating networks are increasingly being combined with industrial waste heat and renewable sources. These examples illustrate this: The transition to climate-neutral heating networks is a key international goal. According to Euroheat & Power, around 43% of district heating in Europe already comes from renewable and waste heat sources, while in Scandinavia and Iceland the figure is over 50%. The integration of solar thermal energy, geothermal energy, biomass, and industrial waste heat is increasing worldwide. Solar district heating (SDH) in particular is growing strongly: according to Future Market Insights, the market volume will increase from USD 3.06 billion (2025) to USD 5.5 billion (2035) - an annual growth rate of over 6%. Technological innovations such as large heat pumps, seasonal heat storage, digital networks, and intelligent control systems are accelerating the transformation and increasing efficiency.
The transformation requires considerable investment: According to Global Market Insights, over €40 billion will be needed to expand and decarbonise district heating networks in Europe alone by 2032. The business research company confirms that high initial investments, regulatory uncertainties and the need to modernise existing infrastructures represent key challenges. At the same time, the market offers considerable opportunities: energy efficiency, security of supply, CO₂ reduction, and the flexible integration of various renewable sources make district heating a key technology in the heating transition. It is therefore developing into a mainstay of sustainable heat supply worldwide. With a clear political commitment, massive investment and technological innovation, district heating networks can make a decisive contribution to achieving global climate targets by 2050. Europe remains a pioneer, but Asia and North America are also rapidly catching up.
In Veksoe, north of Copenhagen (Denmark), around 400 houses are being connected to the local district heating plant. The distribution of the tempered water via the pipe system plays a major role in this project. This is because pipe network has a total length of over 15 kilometres. The better the thermal insulation of the underground pipes, the less energy the heating plant needs to supply the housing estate. The operators therefore decided in favour of aquatherm energy blue. The pre-insulated PP- pipe system impresses with its high insulation performance, high flow rate, and long-lasting corrosion resistance. In contrast to metal pipes, this creates greater efficiency, more safety, and a better ecological balance for the project. Veksoe is part of a nationwide strategy to significantly increase the share of district heating – and geothermal energy in particular – in Denmark. Today, 64% of all Danish households are already connected to a district heating network - a top figure by European standards.
District heating has established itself internationally as a strategic response to the challenges of urban energy supply and decarbonisation. The technology combines efficiency, flexibility, and scalability - characteristics that make it attractive to a wide range of decision-makers. District heating projects address a broad spectrum of stakeholders and decision-makers.
The successful realisation of district heating projects requires close cooperation between public and private players, forward-looking municipal heating planning, and the early involvement of all relevant stakeholders. District heating is particularly sustainable where it is conceived and implemented as part of integrated, sustainable urban development. For decision-makers in local authorities, energy suppliers and the property industry, it offers a robust, scalable and climate-friendly solution - provided that the regulatory, economic and technical framework conditions are consistently addressed.
Municipal and regional administrations
They are key players in strategic heat planning, define political goals, and create regulatory framework conditions. Municipalities decide on the designation of district heating areas, coordinate stakeholders, and manage integration into urban development.
Municipal utilities, energy suppliers and grid operators
These players are responsible for the planning, construction, operation and financing of the grids. They make investment decisions, develop business models, and are the central point of contact for major customers and the property industry.
Owners and operators of large property portfolios
Housing companies, commercial property operators, hospitals, educational establishments, and industrial companies are often the first to be connected to district heating networks. They benefit from predictability, security of supply and the opportunity to achieve sustainability targets.
Industry and commerce
Companies with high heat requirements or utilisable waste heat are relevant both as large consumers and as potential feeders into the grid. By integrating waste heat, they can contribute to increasing the efficiency of the overall system.
Political decision-makers and regulatory authorities
They set the framework conditions, monitor compliance with climate targets, and ensure transparency and consumer protection.
District heating is more than just an alternative to traditional heating systems - it is a strategic instrument for the decarbonisation, energy efficiency and security of supply of modern cities and neighbourhoods. Thanks to the flexible integration of renewable energy sources and industrial waste heat, high operational reliability, and low space requirements within buildings, district heating offers clear advantages for a wide range of stakeholders – from municipal decision-makers and energy suppliers to property operators and companies with large heating demands. At the same time, successful implementation requires foresighted planning, a willingness to invest, and the selection of reliable system partners.
The experts at aquatherm will support you from planning to implementation - with innovative, durable and efficient PP pipe systems for district heating supply.
Contact us for a personalised consultation!
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