Baltic Municipal Heating Network

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Local Heat Planning - Achieving the Heat Transition in BSR Municipalities (PlanHeat)

Charlotte Pauline Winkler

Contact person

Project period:

March 2025 – February 2028

Funding programme:

Interreg Baltic Sea Region 2021-2027

Website:

https://interreg-baltic.eu/project/planheat/

The heating sector is a major source of emissions in the Baltic Sea region and its decarbonization is crucial. To encourage the transition to more sustainable heating solutions, the EU requires municipalities with more than 45,000 inhabitants to develop local heat plans. The PlanHeat project aims to assist local authoritiesin this endeavour, by creating a transnational manual on local heat planning. Involving municipalities and experts from seven countries, it will provide guidance on data use, technologies, staff training, stakeholder involvement, and financing. In the final project phase, “Ambassador Cities”, that are involved in project activities from the start, will help to promote and distribute the manual region-wide.

Lead partner: Magistrate of the city of Bremerhaven

Project partners: ECOLOG Institute for Social-Ecological Research and Education, City of Bydgoszcz, National Energy Conservation AgencyThe Association of Municipalities Polish Network „Energie Cités,Alytus City Municipality, Lithuanian Energy Institute, Smiltene Municipality, Ekodoma Ltd, Rakvere Soojus AS, EcoFellows Ltd, Energy Agency Southern Sweden, City of Konin, Tallinn University of Technology

Kohalik Soojusmajandus - soojussektori muutmine kestlikumaks Läänemere piirkonnas (PlanHeat)

Kertu Lepiksaar

Projektijuht

Projekti periood

märts 2025 – veebruar 2028

Rahastamisprogramm

Interreg Läänemere piirkond 2021–2027

Eelarve

3,61 miljonit eurot, sh ERFi panus 2,89 miljonit eurot.

Kütte- ja jahutussektor mängivad olulist rolli liikudes kliimaneutraalsuse poole. EL võttis 2023. aasta sügisel vastu uued eeskirjad ja suurendas ambitsioone läbivaadatud energiatõhususe direktiiviga (EED), mis on suunatud kütte- ja jahutussektorile mitte ainult riiklikul, vaid ka kohalikul tasandil. Praeguse seisuga on kõik liikmesriigid kohustatud tagama, et iga üle 45 000 elanikuga omavalitsus töötab välja kohaliku soojusmajanduse arengukava (artikkel 25.6). Peaaegu kõigis riikides puuduvad asjakohased kommunikatsiooniskeemid direktiivi ja selle mõju kohta Euroopa omavalitsustele ja kodanikele. Vältimaks suure hulga eraldiseisvate ja vastavalt vähem tõhusate lähenemisviiside tekkimist omavalitsuste kütte- ja jahutusplaanide väljatöötamisel ja elluviimisel kogu Läänemere piirkonnas, on projekti „PlanHeat” eesmärk algatada riikidevaheline info- ja oskusteabe vahetus. Selline lähenemine näib olevat Läänemere piirkonnas eriti väärtuslik, arvestades, et mõned piirkonna riigid kuuluvad kohalike soojuskavade koostamise kogemuse, andmete kättesaadavuse ning omavalitsustele tehnilise ja organisatsioonilise toe institutsionaliseerimise poolest Euroopa esirinnas. Sellest lähtuvalt on projekti eesmärk välja töötada ülekantavad juhised ja mehhanismid selliste soojusplaanide korraldamiseks ja elluviimiseks.

PlanHeat Project Results

Upcoming Events

Estonia

Finland

International

Lithuania

Poland

Hybrid

On-site

Online

No events found.

Past Events

Poland

On-site

12/06/2026

Event 21413513

Finland

On-site

25/05/2026

Üritus 12

Lithuania

Online

23/05/2026

Üritus 34

Estonia

Hybrid

15/05/2026

Ürituse pealkiri

International

Online

01/05/2026

Üritus 313

Decision matrix

Heating technology selector

Enter your network details to get tailored recommendations for heating technologies — with separate economic and environmental assessments.

Inputs

Annual heat consumption

GWh

Pipeline length

Heat density

City size

Find the right heating technology for your network

Compare 11 supply options across economic and environmental criteria, based on your network's scale and density.

Citizen Involvement and Good Practices

State of Art

National contact point

Kertu Lepiksaar

Project manager

Local heat planning – state of art

Read info

209 district heating networks, about 75% share of DH in heat production

Existing Heat Planning System (Pre-EED)

Municipal heat planning framework in place since 2013 (District Heating Act draft amendment)

to ensure the most efficiently organised heat supply (production+distribution);

to promote the use of renewable fuels;

to ensure a favourable price for consumers.

Focus: small-scale district heating areas (<50 GWh)

Responsibilities

Municipality planning & approval

Operators à data provision

State policy & subsidies (90% for the plan, 30-50% for investment)

Planning horizon: 10–15 years

What has already been achieved:

Strong DH-based system (~75% of heat production)

~75% renewable & waste heat share (decarbonisation)

95% of DH from “efficient systems” (EED Art. 26.1 aligned), in addition:

Share of preinsulated pipelines: 72%

New pipelines built: ~25 km per year

New customers: ~400 per year

Extensive experience with local heat planning in small systems

District Heating – state of art

Read info

The Estonian district heating (DH) sector provides approximately 60% of the nation’s heat demand. It is a mature sector transitioning from fossil fuel dependency toward local biomass and high-efficiency cogeneration.

Sector Structure and Network Scale

Total Networks: There are 209 district heating networks across Estonia.

Regulated Regions: The Estonian Competition Authority approves price ceilings for 170 distinct DH regions.

Typical Size: The market is dominated by a few large systems, while the majority are small.

137 out of 170 regions have a total annual sales volume of less than 10,000 MWh.

Tallinn is the largest single network, representing 39.4% of the country’s total DH sales volume.

Fuel Mix and Renewable Share (2023–2024)

The sector has significantly moved away from natural gas, which now serves primarily as a peak-load or backup fuel.

Renewable Share: Renewables accounted for 66.7% of final heat consumption in 2023.

Primary Fuel: Wood chips (biomass) are the dominant source for both heat-only boilers and Combined Heat and Power (CHP) plants.

Fossil Fuel Use: The share of networks relying solely on gas or shale oil has dropped to roughly 5%.

Tallinn: Natural gas share has decreased from nearly 100% in 2008 to approximately 30–34% today.

Ida-Virumaa (Narva, Kohtla-Järve): These regions remain outliers, relying predominantly on oil shale and shale gas.

Infrastructure Condition

Pipeline Technology: While renovation is ongoing, a significant portion of the infrastructure consists of older pipes housed in concrete channels.

In Tallinn’s 430 km network, approximately 40% are modern pre-insulated pipes; the remainder are older installations.

Heat Losses: Typical relative heat losses range between 10% and 16% depending on network age and density.

Examples: Tallinn (11.6%), Rapla (15.6%), and Paide (16.1%).

Network Age: Many systems date back to the 1960s–1980s, with an average network age often cited around 22–25 years.

Key Market Players

The Estonian DH market is concentrated among a few major operators that manage multiple regional networks:

Utilitas: The largest provider, serving 8 cities including Tallinn, Haapsalu, and Valga.

Gren: Manages major networks in Tartu, Pärnu, and parts of Ida-Virumaa.

Adven: Operates numerous smaller networks and gas-based systems, particularly in the Tallinn periphery.

SW Energia: operates smaller and rural networks mainly

Used Technologies

High-Efficiency CHP: Most large-scale heat is produced in cogeneration plants (CHPs), which utilize biomass to produce electricity and heat simultaneously.

Boiler Houses: Smaller regional networks typically use wood-chip-fired boiler houses.

Emerging Tech: Integration of large-scale heat pumps and thermal energy storage is beginning in major cities but is not yet the national norm.

Energy Efficiency Directive implementation – state of art

Read info

Status of EED Art. 25.6

No formal transposition yet (no draft legislation)

Discussions ongoing at ministry level

Likely adaptation to Estonian context:

Threshold potentially reduced from 45,000 → 30,000 inhabitants

Would include additional municipalities (e.g. Saaremaa, Kohtla-Järve)

EED Art 25.6 Requirement	In Estonian §10 (since 2015)	Gap/Action needed
Current heat supply & demand; network characterization	§10(2): boiler houses, networks, losses, kW/m and kWh/m	Largely covered
Future heat demand forecast; renovation scenarios	§10(3): future heat loads required	Depth varies; no standard methodology
Map of heat sources incl. waste heat & renewables	§10(5): energy source options analysis	Waste heat mapping not systematic
Cost-benefit: DH vs. local heating options	§10(5-6): feasibility and option analysis	Often simplified; no lifecycle cost standard
Energy efficiency strategy; low-T DH readiness	Not explicitly required	Low-temp DH not systematically addressed
Vulnerable households; energy poverty targeting	§10(4): affordability mentioned	No systematic targeting of energy-poor
Monitoring framework for implementation	Not required	No tracking of plan implementation
Climate neutrality trajectory (2030/2040/2050)	Not required	No alignment with EU milestone years

National contact point

Silva Vuopponen

EcoFellows Ltd

Local heat planning – state of art

Read info

Local heat planning in Finland is currently shifting from a voluntary, energy-efficiency-driven approach toward a more structured, mandatory climate-focused framework.

Legal Obligations and Responsibility

Mandatory Climate Plans: Under the Climate Act (423/2022), every Finnish municipality is now required to prepare a municipal climate plan. While not exclusively “heat plans,” these must include specific measures and targets for reducing greenhouse gas emissions within the municipality, where heating typically plays a major role.

Political Accountability: local plans must be formally adopted by the Municipal Council.

The Planning Process

Voluntary Energy Efficiency Agreements: A cornerstone of the Finnish model has been voluntary agreements between the state and municipalities. Participatingmunicipalities (over 160 currently) commit to energy-saving targets and annual reporting in exchange for government subsidies and investment aid.

Collaboration: Municipalities often draft these plans in collaboration with regional authorities or other municipalities to pool resources.

Stakeholder Input: District heating operators, many of which are municipally owned, are key stakeholders. However, private network operators are currently not legallyobliged to share detailed energy demand data with local authorities unless mandated by specific municipal ownership.

Planning Period and Timeline

Mandate-Based Review: Legally, municipal climate plans must be prepared or updated at least once per council term (every four years).

Implementation Deadline: All municipalities are required to have their first mandatory climate plans implemented between 2025 and 2029.
Strategy Cycle: The latest voluntary Energy Efficiency Agreement period runs from 2026 to 2035, guiding long-term local planning.

District Heating – state of art

Read info

Finland’s district heating (DH) sector is the largest heating model in the country, providing roughly 46% of the total space heating market and over 90% of heat in apartment buildings and urban areas.

Sector Structure and Network Scale

Total Networks: There are over 500 DH networks in Finland, ranging from large urban systems to small municipality-owned grids.

Market Scale: The sector serves approximately 2.9 to 3.0 million people.

Total Length: As of late 2024, the total network length reached 16,690 km, growing by about 230 km annually.

Fuel Mix and Decarbonization (2024–2025)

Finland is rapidly transitioning away from coal and peat toward carbon-neutral sources. By the end of 2024, the climate-neutral share of district heat reached 73%.

Biofuels (46.3%): Forest chips (30%) and industrial wood residues (11%) are the primary fuel sources.

Non-Combustion & Waste Heat (28%): This is the fastest-growing segment, including large-scale heat pumps, electric boilers, and recovery from data centers and industry.

Fossil Fuels (Remaining):
– Natural Gas: ~7.3% (used mostly for peaking).
– Peat: ~6%.
– Coal: ~5% (phasing out rapidly; coal-fired heating is legally banned as of May 1, 2029).

Infrastructure and Condition

Pipeline Technology: Modern pre-insulated bonded pipes are the standard for all new construction and renovations.

Heat Losses: Distribution losses are among the lowest globally, averaging 8–9%.

System Specs: Typically closed two-pipe systems with varying supply temperatures (70–115°C) and pressure around 1.6 MPa.

Service Reliability: The sector maintains a reliability rate of 99.98%.

Main Heating Companies

Helen: The operator for Helsinki; currently making massive investments in heat pumps and sea-water heat recovery to replace coal.

Vantaan Energia: Serves the Vantaa region and is a leader in waste-to-energy and seasonal heat storage.

Fortum: A major player in the Espoo area, focusing heavily on excess heat from data centers (Microsoft partnership).

Municipal Utilities: Companies like Tampereen Energia and Turun Energia dominate their respective regional markets.

Used Technologies

Cogeneration (CHP): Roughly 43–54% of heat is produced in CHP plants, though the share is decreasing as the sector electrifies.

Electric Boilers: Deployment is surging (over 2,500 GWh produced in 2025) to utilize low-cost wind power.

Thermal Storage: Large-scale water tank accumulators and cavern thermal energy storage (CTES) are used to balance peak loads.
Flue Gas Condensers: Standard on nearly all biomass plants to maximize efficiency.

Energy Efficiency Directive implementation – state of art

Read info

Municipalities with more than 45,000 inhabitants are required to prepare a local heating and cooling plan

The key obligation is not the plan itself, but the notification

The municipality must submit a notification to the Energy Authority

The notification is submitted via the Energy Authority’s online service

The municipality reports:

that the plan exists

key information on the plan’s content

Reporting requires:

municipality’s official Business ID

Suomi.fi authorisation

Deadline and use of existing plans

Notification deadline: 31 March 2027

Existing documents can fulfil the requirement, such as:

climate or energy plans

SECAP

energy efficiency agreements (Public Sector Energy Efficiency Agreement)

district heating strategies

No need for a new standalone plan if requirements are already covered.

National contact point

Johanna Jekel

ECOLOG Institute for Social-Ecological Research and Education

Local heat planning – state of art

Read info

Local heat planning in Germany has recently become a nationwide mandatory task under the Heat Planning Act (Wärmeplanungsgesetz – WPG), which entered into force on January 1, 2024. This law is a central pillar of Germany’s strategy to achieve climate neutrality by 2045.

Legal Obligations and Responsibility

Mandatory for All States: The federal law obliges all federal states (Länder) to ensure that local heat plans are developed. The states typically delegate this responsibilityto municipalities or associations of municipalities.

Two-Tiered Deadline System: The obligation is phased based on population size:

Large Cities (>100,000 inhabitants): Plans must be completed by June 30, 2026.

Smaller Municipalities (<100,000 inhabitants): Plans must be completed by June 30, 2028.

Simplified Procedures: States can allow a simplified planning process for very small municipalities ( those with fewer than 10,000 inhabitants) as well as joint planning across multiple municipalities (the so-called convoy procedure).

The Planning Process

Municipalities follow a standardized four-phase approach to create a roadmap for a greenhouse gas-neutral heat supply:

Inventory Analysis (Bestandsanalyse): Mapping current heat demand, building types, and existing energy infrastructure.

Potential Analysis (Potenzialanalyse): Identifying local renewable energy sources (e.g., geothermal, solar thermal) and unavoidable waste heat from industries.

Target Scenario (Zielszenario): Defining how the municipality will achieve climate neutrality by 2045, including spatial mapping of future heat supply areas (e.g., district heating vs. decentralized heat pumps).

Implementation Strategy: Outlining concrete measures and a prioritized schedule to reach the target.

Planning Period and Updates

Long-Term Horizon: Plans are designed to show a clear path to climate neutrality by 2045, often including interim milestones for 2030 and 2040.

Mandatory Updates: The body responsible for planning is legally required to review and update the heat plan every five years to monitor progress and adapt to new technological or legal developments.

Coordination with Building Laws

The heat planning process is closely linked to the Building Energy Act (GEG). In many cases, strict requirements for new heating systems (such as the “65% renewable energy” rule) only become fully applicable once the local heat plan is finalized, providing citizens with “planning security” regarding future district heating availability.

District Heating – state of art

Read info

Germany’s district heating (DH) sector is currently at the center of the country’s Energiewende (energy transition). While historically reliant on fossil fuels, the sector isundergoing a legal and technical transformation to meet strict new climate neutrality targets.

Sector Structure and Network Scale

Total Networks: There are over 4.307 district heating networks in Germany, operated by approximately 500 to 600 utilities.

Market Share: DH covers about 14% of the total residential heating market, serving roughly 6 million (6.8 million) households.

Network Length: The total length of the heating infrastructure is approximately 38.9k km.

Regional Concentration: District heating networks are implemented in a wide variety of settlement structures, regardless of the population density and density of heating linesin a state. Networks are heavily concentrated in major metropolitan areas (Berlin, Hamburg, Munich) and industrial clusters like the Ruhr region.

Fuel Mix and Energy Sources (2024)

The German mix is still dominated by fossil fuels, though the transition away from coal and natural gas is accelerating.

Natural Gas: The primary fuel source, accounting for approximately 45–50%51% of heat generation.

Coal (Hard coal and Lignite): Still accounts for about15 20–25%, but is being phased out rapidly under national law (final exit by 2038 at the latest).

Renewables and Waste Heat: Combined, these account for roughly 3020–25%. This includes biomass, waste-to-energy (partially counted as renewable in Germany), and industrial excess heat. (Waste: 21%, Biofuels: 10%, Geothermal: 1%, Solar thermal 0.,05%)

Waste-to-Energy: Plays a critical role in the base load of large urban systems.

Oil: 2 %

In DH networks: 33% renewable energy sources & waste heat, 67% fossil fuels (mainly coal & gas).

Infrastructure and Condition

Pipeline Technology: A vast mix of technologies exists. Large city centers often still use older steel pipes in concrete ducts, while newer expansions use modern pre-insulated bonded pipes.

Heat Losses: National average heat losses range between 10% and 15%, varying significantly between dense urban grids and more spread-out suburban networks.

Temperature Regimes: Most systems are 3rd Generation, operating at high supply temperatures (frequently above 90°C), which presents a challenge for the direct integration of low-temperature renewables like heat pumps. (24% 60-90°C; 37% 90-110°C, 33% ≥ 110°C, 6% steam)

Main Heating Companies

The market is dominated by a mix of international energy giants and powerful municipal utilities (Stadtwerke).

Vattenfall / State of Berlin: Operates one of the largest networks in Western Europe (approx. 2,000 km). The system was recently re-municipalized by the City of Berlin.

E.ON: A major private operator across various regions and industrial parks.

Stadtwerke München (SWM): The municipal utility for Munich, recognized for its massive investment in deep geothermal energy.

Local Stadtwerke: Cities like Hamburg, Cologne, and Frankfurt have strong, locally-owned utilities that manage their respective grids.

637 DH producers, 488 DH operators, 78 heat storage operators, 604 DH suppliers (companies may be operating in multiple functions)

Used Technologies

Combined Heat and Power (CHP): OverAround 850% of German district heat is produced via cogeneration, reflecting a long-standing policy of high-efficiency energyuse.

Large-Scale Heat Pumps: There is a surge in new projects utilizing river water, treated wastewater, and industrial waste heat to replace gas boilers.

Geothermal Energy: Deep geothermal is a high-priority technology, particularly in Southern Germany (the Molasse Basin) where geological conditions are ideal.

Thermal Storage: Huge water-based storage tanks are becoming standard to allow CHP plants and heat pumps to operate more flexibly against fluctuating electricity prices.

Energy Efficiency Directive implementation – state of art

Read info

As of April 2026, 16% of German municipalities have completed thier LHP, 38% are in the process and 46% have not yet started (or haven’t provided information)

A bit more than 4.000 municipalities (out of 10.754) are part of a convoy for joined LHP with multiple municipalities

Heat Planning Act (WPG)

Entered into force 1 January 2024

> 100.000 inhabitants – Local Heat Plans until 30 June 2026

< 100.000 inhabitants – Local Heat Plans until 30 June 2028

District Heating Grids > 1km – Heating Grid Expansion and Decarbonisation Plan until 31 December 2026

New District Heating Networks – min. 65% renewables/waste heat (from 2025)

Existing DH networks→ 30% RES by 2030, → 80% by 2040

 The federal government cannot directly mandate local authorities, therefore transposition into state-level legislation is required —> WPG has been implemented in 15 out of 16 federal states

Shortcomings in the implementation of the EED into German law

Requirements are largely reflected in national legislation, with a few remaining gaps

No priority for worst-performing buildings & vulnerable households (EED Art. 25.6(h))

No specific phase-out pathway for public buildings (EED Art. 25.6(k)

Additional requirements for municipalities > 45.000 inhabitants (§21)

alignment with the “Energy Efficiency First” principle,

assessment of community energy initiatives,

financing strategies,

evaluate synergies with neighboring authorities

Simplified procedure for municipalities <10.000 inhabitants (§22 + §4), if foreseen by state law

simplified procedure (reduced stakeholder consultation and streamlined assessments),

joint planning across multiple municipalities permitted (convoy procedure)

National contact point

Toms Irbe

SIA “EKODOMA”

Local heat planning – state of art

Read info

Local heat planning in Latvia is currently in a transitional state and is now establishing a comprehensive national regulatory framework specifically for mandatory local heat planning to comply with new EU mandates.

Legal Obligations and Responsibility

Decentralized Discretion: Until recently, local heat planning was largely at the discretion of individual municipalities, integrated into broader Sustainable Development Strategies rather than standalone mandates.

Ministry of Climate and Energy (KEM): Established in January 2023, this ministry now leads the systematic development of energy policy, including the transposition of EU planning requirements.

The Planning Process

Strategic vs. Project-Based: Most local heat planning progress has traditionally been driven by specific EU-funded projects rather than long-term strategic spatialplanning.

Stakeholder Consultation: Strategic documents, such as the recently developed Riga City District Heating Development Strategy for 2025–2032, involve mandatorypublic consultation phases to incorporate feedback from citizens and industry.

Data Access: Latvia currently lacks a centralized geodata platform for energy planning, though Riga has pioneered its own geospatial platform, Geo Riga, for thispurpose.

Planning Period and Goals

Strategy Horizon: While no universal mandate existed for smaller towns, larger strategic plans (like Riga’s) typically cover 7-to-8-year periods.

Fossil Fuel Phase-Out: New regulations include strict limits on gas boilers. From January 1, 2026, permits for new gas boilers will only be issued in rare, economicallyjustified cases.

District Heating Priority: Planning rules increasingly prioritize connection to centralized district heating or high-efficiency renewable sources for new or renovated buildings.

District Heating – state of art

Read info

The Latvian district heating (DH) sector is one of the most developed in Europe, with high penetration among the urban population. Like Estonia, it is undergoing a transition from natural gas to biomass, though it remains significantly influenced by the energy needs of its capital, Riga.

Sector Structure and Network Scale

Total Networks: Latvia has approximately 68 to 70 distinct DH systems serving its cities and towns.

Market Concentration: Riga dominates the sector, accounting for roughly 50% of the entire national district heating market.

Service Reach: Approximately 68% to 70% of all heat consumption in Latvia is provided by DH systems, ranking it among the highest in Europe for customer connectivity

Fuel Mix and Renewable Share (2022–2024)

Latvia has rapidly increased its use of biomass to reduce reliance on imported natural gas.

Renewable Share: In 2023, renewable energy reached 61.4% in the heating and cooling sector, the third-highest figure in the EU.

Dominant Fuel: Wood biomass (wood chips) is the most significant local fuel.

Natural Gas Decline: Natural gas historically dominated, but its share in district heat generation fell to approximately 33% by 2022, down from 79% in 2005.

Riga’s Profile: In the capital, Rīgas Siltums now sources about half of its energy from wood chips, with the remainder primarily from natural gas.

Infrastructure and Condition

Pipeline Technology: Investment in modernizing networks is ongoing. Between 2007 and 2020, over 238 km of DH pipelines were built or reconstructed using EU funds.

Heat Losses: National average heat losses in transmission and distribution networks were approximately 11.3% in 2020.

Network Condition: While systems in major cities are approaching Western European standards, some regional networks have historically faced challenges with aginginfrastructure and maintenance lags.

Main Heating Companies

Rīgas Siltums: The primary provider in Riga, managing production, transmission, and building-level maintenance.

Gren: Operates major networks in cities like Jelgava and Gulbene, focusing heavily on biomass CHP plants.

Adven: Manages regional networks (e.g., Valmiera, Cēsis) with a focus on efficiency upgrades.

Municipal Operators: Most other large cities (Daugavpils, Liepāja, Ventspils) are served by municipality-owned utility companies.

Technologies

Combined Heat and Power (CHP): Latvia operates roughly 160 CHP plants and over 630 boiler houses.

Solar DH: Latvia has begun integrating solar thermal energy into its DH systems, such as the major solar collector field in Salaspils.

Regulation: The Public Utilities Commission (SPRK) regulates approximately 100 heat supply companies whose annual volume exceeds 5,000 MWh.

Energy Efficiency Directive implementation – state of art

Read info

Current situation: preparation

A comprehensive  assessment  of the  heating  and cooling  potential  is a  strategic  document that  Latvia  is developing to meet the requirements of the Energy Efficiency Directive of the European Parliament and of the Council.  The main  objective  of this  assessment  is to  identify  the most  energy-efficient  and economically viable solutions for the provision of heat and cold on a national scale. It has been prepared by the Ministry of Climate and Energy and KPMG Baltics.

Analysis of current demand and supply: A detailed overview of how much heat and cold is currently consumed by households, industry and the service sector.

Creation of heat and cold maps: Geographic visualization of data that helps to identify places with high heat density where it would be useful to develop district heating.

Waste heat potential: Analysis of the possibilities of using excess heat generated in industrial processes or data centers.

Integration of renewable energy sources (RES): Evaluation of the increased use of biomass, solar energy, geothermal energy: Economic rationale for different scenarios, comparing investments with long-term savings and achieving environmental goals

Next steps: Local assessment

Preparation of municipal assesments

Will apply on all State city municipalities (all in all 10 Latvian largest cities);

The criteria for selection of cities differ from criteria in EED Directive, as not all State city municipalities have population of more than 45 000, however, it will be  possible  to not  apply  the requirement  to  distant and  sparsely populated areas with relevant municipalities•The provisional deadline (to be consulted) – by end of 2027;

Municipalities will be encouraged to use existing national assesment as a reference and benchmark, as well as use existing development plans

Support steps for municipalities

Support expected from stakeholders among NGOs, peer-to-peer assistance and experience sharing will be encouraged;

Additional   assistance    from    the   Public    Utilities    Commission    with methodological guidelines for, for example, assesement of waste heat potential and sustainability  assesment  of existing  centralised  heating systems  in  line with proposed policy steps from State Auditor.

Additional  consultations   between   Ministry  of   Climate   and  Energy   and stakeholders during legislative phase and in implementation phase

National contact point

Rimantas Bakas

Lithuanian Energy Institute

Local heat planning – state of art

Read info

Started in 2010-2011, first plans were produced in 2012.

Local heat sector were planned under Spatial planning of municipal infrastructure.

Also following requirements of EU Directives:

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources (RED I), which setsa legally binding target for Lithuania that by 2020, the share of renewable energy sources should account for at least 23% of the country’s total final energy consumption, and the share of renewable energy sources should account for at least 10% of the transport sector’s final energy consumption;

Directive 2010/75/EU of the European Parliament and of the Council of November 10, 2010 on industrial emissions (integrated pollution prevention and control), which tightens emission standards for large combustion plants (LCPs) after 2016.

Plans should be updated at least every 10 years.

Local heat planning is based on the following regulatory documents:

Law on Spatial Planning

LAW OF THE REPUBLIC OF LITHUANIA ON HEAT SECTOR MANAGEMENT, No. IX-1565, 20 May 2003 (last revised 2025)

RULES FOR THE PREPARATION OF SPECIAL PLANS FOR HEAT MANAGEMENT, 25 September 2015, by order No 1-226/D1-683 of Ministries of Energy and Environment, which defines regulations for elaborating rules

Law on Environmental Air Protection

Law on the Assessment of the Impact of Planned Economic Activities on the Environment regarding air pollution and urban criteria (building density, building height, building specifics),

Law on Energy Efficiency

Regulations on Public Participation in the Spatial Planning Process (March 14, 2007, No. 247

District Heating – state of art

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Lithuania’s district heating (DH) sector is often cited in the Baltics for its aggressive and early shift from natural gas to biomass. It provides heat to approximately 57% of all households and about 80% of those in urban areas.

Sector Structure and Network Scale ‘

Total Networks: There are 49 licensed District heating companies operating in 60 municipalities, some of them are regional (operating in several municipalities) and managing in total approximately 300 DH systems, starting from the largest like Vilnius, Kaunas, Klaipėda down to microsystems, supplying centralised heating to several buildings.

Market Scale: The three largest cities—Vilnius, Kaunas, and Klaipėda—account for the vast majority of the heat market.

Regulatory Framework: The sector is regulated by the National Energy Regulatory Council (VERT), which sets price caps for approximately 50 heat supply companies.

Fuel Mix and Renewable Share

Lithuania underwent a massive “fuel switch” over the last decade, moving from 80% natural gas dependency to a biomass-dominated system.

Renewable Share: As of 2024, approximately 78% of the fuel used in district heating comes from renewable sources (primarily biomass and renewable share of MSW) and nearly 85% from indinuous sources, including RES and non-renewable waste-to-energy.

Primary Fuel: Wood chips are the dominant fuel source.

Natural Gas: Now used mainly for peak demand during extreme cold or as a backup, accounting for roughly 13% of the total mix (varying by year and city).

Waste-to-Energy: A significant portion of heat in Vilnius, Kaunas and Klaipėda is provided by three large-scale waste-to-energy plants (e.g., the Fortum/Gren plant in Klaipėda and the Kaunas Cogeneration Plant, as well as Vilnius Cogeneration Plant).

Infrastructure and Condition

Pipeline Technology: Lithuania has one of the highest rates of renovated pipelines in the region.

Pre-insulated Pipes: It is estimated that over 50–60% of the total network (approx. 2,900 km nationwide) has been replaced with modern pre-insulated piping.

Heat Losses: Due to intensive modernization, national average heat losses have dropped significantly, typically ranging between 12% and 15%. In highly modernizednetworks like Kaunas, losses can be as low as 10%.

Main Heating Companies

Gijos – Vilnius DH&C company: The municipality-owned operator for Vilnius, currently finalizing its transition away from gas with the new Vilnius CHP plant.

Kauno Energija: Serves the Kaunas region and has one of the highest shares of renewable energy among large cities.

Gren: A major private player operating in Klaipėda, Jelgava, and other municipalities, focusing on biomass and waste-to-energy.

Klaipėdos Energija: The primary operator in the port city of Klaipėda.

Panevežio energija: The largest regional DH operator, serving 6 municipalities in the nothern part of Lithuania.

Used Technologies

Biomass CHP: The backbone of the system. All large cities utilize high-efficiency cogeneration.

Flue Gas Condensers: Almost all biomass plants in Lithuania are equipped with flue gas condensers, which increase boiler efficiency by 15–20% by recovering latent heat from smoke.

Absorption Heat Pumps: Increasingly used in combination with biomass boilers to further squeeze efficiency out of the combustion process.

Energy Efficiency Directive implementation – state of art

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EED III is transposed into two basic ones:

(The following input is not only from EED III, but from revised RED III as well)

LAW OF THE REPUBLIC OF LITHUANIA ON HEAT SECTOR MANAGEMENT, No. IX-1565, 20 May 2003 (last revised 2025)

RULES FOR THE PREPARATION OF SPECIAL PLANS FOR HEAT MANAGEMENT, 25 September 2015, by order No 1-226/D1-683 of Ministries of Energy and Environment, which defines regulations for elaborating rules

No limitation of population over 45,000. Plans are obligatory for all municipalities!

National contact point

Katarzyna Rajkiewicz

Narodowa Agencja Poszanowania Energii S.A.

Local heat planning – state of art

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Local heat planning in Poland is primarily governed by the Energy Law Act of April 10, 1997 (Ustawa Prawo energetyczne). While Polish municipalities have had legal planning obligations for decades, the framework is currently being overhauled to align with more stringent EU decarbonization requirements.

Legal Obligations and Responsibility

Mandatory Municipal Task: Every municipality (gmina) is legally responsible for the “planning and organization of the supply of heat, electricity, and gaseous fuels” within its territory.

Approval Body: The planning documents must be formally adopted by the Municipal Council.

Dual Responsibility: While the municipality plans, the local energy enterprises (often owned by the municipality) are responsible for the actual implementation and secure supply.

The Planning Process

Draft Assumptions: The process starts with a “Draft Assumption” document (known as Założenia). This outlines the current energy state and forecasts for the municipality.

Collaboration with Utilities: Municipalities are required to obtain data from energy companies. However, this has historically been a challenge as companies provideddata on a voluntary basis, leading to information gaps.

Public Consultation: Before adoption, draft assumptions must be made available for public review for at least 21 days, allowing citizens and businesses to submitremarks.

Voivodeship Oversight: The final document is sent to the regional Governor (Wojewoda) to ensure consistency with the State Energy Policy.

Planning Period and Updates

15-Year Horizon: Municipalities must prepare assumptions that forecast supply and demand for at least a 15-year period.

Triennial Review: Legally, these assumptions must be updated at least every three years to reflect changing market conditions and technologies

Transitioning to EU Standards (EED Article 25.6)

Poland is currently modernizing its local planning to meet the EU Energy Efficiency Directive (EED):

Decarbonization Focus: The traditional focus was on “security of supply.” New rules shift this toward strategic heating and cooling plans with a clear roadmap for eliminating fossil fuels (mainly coal) by 2040.

Improved Data Access: To address previous planning failures, the government launched the Central Emission Register of Buildings (CEEB) in 2021. This gives local planners access to mandatory declarations from homeowners about their heating sources.

Low Compliance Rates: Despite the mandate, as of 2020, only about 20% to 22% of Polish municipalities had current, valid energy plans.

District Heating – state of art

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Poland’s district heating (DH) sector is one of the largest in Europe, but unlike its Nordic and Baltic neighbors, it remains heavily dependent on coal. The sector is currently facing an immense investment challenge to comply with EU decarbonization requirements.

Sector Structure and Network Scale

Total Networks: There are approximately 400 licensed heating companies operating across the country.

Market Share: DH systems provide heat to about 42% of Polish households (nearly 15 million people), mostly in urban areas.

Network Length: The total length of the heating network in Poland is roughly 22,000 km.

Fragmentation: While large cities have massive systems, the majority of companies are small-to-medium municipal utilities serving local towns.

Fuel Mix and Energy Sources

The Polish DH sector is a significant outlier in Northern Europe due to its fossil fuel reliance.

Coal Dominance: Hard coal remains the primary fuel, accounting for approximately 66–68% of the energy input.

Renewables (RES): The share of renewable energy is growing but remains low, at around 13–15% (mostly biomass).

Natural Gas: Accounts for roughly 10–12% and has been the primary “transition fuel” for companies moving away from coal.

Waste-to-Energy: A growing sector with several major incinerators (e.g., Krakow, Poznań) contributing to municipal grids.

Infrastructure and Condition

Pipeline Technology: The infrastructure is a mix of modern and Soviet-era technology.

Pre-insulated Pipes: Approximately 55–60% of the national network consists of modern pre-insulated pipes. The remainder consists of older channel-style pipelines, many of which are in poor technical condition.

Heat Losses: National average heat losses are roughly 11–12%, but in smaller, unmodernized networks, losses can exceed 15%.

System Status: More than 80% of Polish DH systems are currently classified as “inefficient” according to EU criteria (meaning they do not yet use enough cogenerationor renewable energy).

Main Heating Companies

PGE Energia Ciepła: The largest producer in Poland, operating in major cities like Kraków, Gdańsk, and Wrocław.

Veolia Energia Polska: A major private player managing the systems in Warsaw (the largest DH network in the EU) and Łódź.

PGNiG Termika: Focuses heavily on the Warsaw metropolitan area, primarily using gas and coal CHP.

Municipal Companies (MPEC): Hundreds of cities own their own local utility companies (e.g., MPEC Kraków).

Used Technologies

Combined Heat and Power (CHP): Roughly 60% of heat is produced through cogeneration, which is high, but the fuel used is still largely coal.

Gas Turbines and Engines: Many smaller plants are replacing coal boilers with gas-fired units to meet emission standards quickly.

Biomass Boilers: Being introduced in smaller municipalities as a primary renewable source.

Geothermal: Poland has significant potential; small-scale systems exist in Podhale and central Poland, with several new projects currently under drilling.

Energy Efficiency Directive implementation – state of art

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Key Legal Acts: Draft amendments to the Energy Efficiency Act and the Energy Law Act (government register numbers: UC77 and UC121).

The process is gaining momentum, although the original EU deadline (October 2025) has been missed.

Main Requirements of Draft Acts UC77&UC121

In accordance with the new legal provisions currently being introduced into the Polish legal order, cities booave 45 thousands are required to prepare Local Heating and Cooling Plans. Here is what must be included in them:

Waste Heat Inventory: This is the most significant novelty. Cities must identify nearby sewage treatment plants, data centers, or industrial facilities that “waste” heat and create a roadmap for integrating this heat into the municipal grid.

Grid Decarbonization Strategy: The plan must clearly demonstrate how the municipal heating network will transform into an “efficient district heating and cooling system” (defined as one utilizing, among other things, at least 50% renewable energy or 50% waste heat).

“Energy Efficiency First” Principle: The city must prove in the plan that before deciding to build a new boiler house, it first considered deep thermal renovation of buildings in the given district to reduce demand.

Legislation in 2026

Draft UC121 is scheduled for adoption by the Council of Ministers in Q2 2026

A “fast track” in the Sejm is expected to avoid EU financial penalties

Next steps for cities with more than 45 000 inhabitants

Identify waste heat sources: Locate large data centers and industrial plants within their territory.

Revise energy strategies: Avoid investing in infrastructure that may not meet the new “efficient system” criteria after 2026.

Build competence base: Prepare local government employees, as the new technical and operational requirements will be high.

National contact point

Göran Gustavsson

Energikontor Syd

Local heat planning – state of art

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Local heat planning in Sweden is legally governed by the Municipal Energy Planning Act (Lag 1977:439 om kommunal energiplanering), which establishes the framework for local heat planning

Legal Obligations and Responsibility

Mandatory Requirement: Every Swedish municipality is legally obligated to have an updated energy plan for the supply, distribution, and use of energy within its territory.

Broad Scope: The term “municipality” in this context refers to the entire geographical area, not just the municipal organization’s internal operations.

Political Approval: The final plan must be formally decided and approved by the Municipal Council (kommunfullmäktige).

The Planning Process

Collaboration: Municipalities are required to collaborate with other municipalities and “significant stakeholders” such as power companies, process industries, and local energy utilities.

Data Access: Under the law, energy producers and large energy users must provide the municipality with necessary data for the planning process upon request.

Environmental Impact: The plan must include a strategic assessment of how the proposed activities impact health, environment, and land/water use.

Planning Period and Updates

Mandate-Based Review: Legally, the plan must be tested every mandate period (every four years) to determine if it remains current or requires revision.

Flexibility: While the law mandates “currentness,” it has historically been considered a “soft regulation” because it lacks strict national enforcement mechanisms or rigid standardized timelines for the actual planning horizon. Most municipalities aim for a 5-to-10-year outlook aligned with their broader Comprehensive Plan (översiktsplan).

Emerging Changes (EU Alignment)

Sweden is currently modernizing this framework to align with the EU Energy Efficiency Directive (EED). It accounts for one of the options to implement the EED in Sweden.

District Heating – state of art

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Sweden’s district heating (DH) sector is one of the most mature in the world, covering more than 50% of the total heating demand for all buildings and approximately 90% of all multi-dwelling apartment blocks.

Sector Structure and Network Scale

Total Networks: District heating is available in 275 of Sweden’s 290 municipalities. There are over 500 distinct DH networks operating across the country.

Market Share: The sector provides about 50–60% of all space heating and domestic hot water.

Typical Size: While major cities like Stockholm and Gothenburg have vast, interconnected networks, the majority of systems are medium-to-small municipal grids.

Fuel Mix and Resource Recovery (2023–2024)

Sweden’s fuel mix is characterized by high levels of “recycled” heat and biomass, with fossil fuels relegated to a negligible role.

Biofuels: Wood chips, forest residues, and processed wood pellets account for approximately 45–50% of the energy input.

Waste-to-Energy: Combustible household and industrial waste contributes about 25–30% of the heat supply.

Large-scaled heat pumps: 8-10%.

Excess Heat: Industrial waste heat (from refineries, steel mills, and data centers) accounts for 5–8% of the national supply.

Flue gas condensation: 3-5%.

Black liquor and tall oil: 3-5% (by-products from the pulping process, which is used in the forest industry to make paper pulp from wood.)

Fossil Fuels: Natural gas, oil, and coal products together account for 2-4% of the total DH energy supply, used almost exclusively for peak loads during extreme cold.

Infrastructure and Condition

Pipeline Technology: Most Swedish systems were built or significantly expanded between 1970 and 1990.

Pre-insulated Pipes: Sweden was a pioneer in pre-insulated bonded pipe systems. Because of continuous reinvestment, a high majority of the network (estimated appox. 90%) utilizes pre-insulated technology, though older systems in city centers still feature pipes in concrete ducts.

Heat Losses: National average heat losses in distribution networks are relatively low, typically around 10%.

Temperature Regimes: Most systems are “3rd Generation” (supply temperatures of 70–90°C), though modern areas are increasingly designed for lower temperatures.

Main Heating Companies

The market is a mix of large international energy groups and municipality-owned utilities.

Stockholm Exergi: The largest operator, serving the Stockholm region.

Vattenfall: A state-owned giant with major networks in Uppsala and other regions.

E.ON: Operates several large systems, notably in Malmö and Örebro.

Göteborg Energi: The municipal utility for Gothenburg, the second-largest network in the country.

Used Technologies

Combined Heat and Power (CHP): Approximately 50% of district heat is produced in plants that simultaneously generate electricity.

Large-Scale Heat Pumps: Sweden has a long tradition of using massive heat pumps (often over 100 MW) to extract heat from treated wastewater or seawater.

Flue Gas Condensation: Nearly all biomass and waste-to-energy plants use condensation technology to recover heat from exhaust gases, often increasing efficiency by 20%.

Energy Efficiency Directive implementation – state of art

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The implementation is in delay, expected to enter into force later on this year, 2026.

It is supposed to be implemented via targeted amendments rather than a single large framework law.

Parts of the directive are somehow already in place via other programmes, e.g.

3% annual renovation of public buildings: Sweden has implemented building renovation programmes

Local heating and cooling plans: National law, since 1977, which covers all Swedish municipalities (Very broad perspective, with no focus on heating and cooling)

Two various scenarios for the implementation of 25.6

Regional plans instead of local plans (in accordance with the Swedish pilot)

Extension (or amendment) of the Swedish law for local energy planning

Low implementation gap because of the law for local energy planning