Urban heating and the green transition: a path to net-zero cities

Urban heating lies at the heart of climate action and the drive toward net-zero cities.

Several factors make urban heating networks a critical battleground for the coming years. On one hand, the steady trend of global urbanization means that many climate challenges will need to be solved within cities. On the other, the climate impact of heating is already recognized as a major contributor to emissions, and therefore a crucial lever for achieving decarbonization.

In this context, strategies like sustainable district heating networks are hailed by experts and institutions as an important step towards achieving net-zero cities. Capable of incorporating a variety of renewable and clean energy sources, they emerge as a key solution to face some of the challenges urban heating will need to overcome in the next decades.

But what exactly are these challenges and how is urban heating technology evolving to face them today and in the near future? Here, we explore these questions, including a close look at urban heating networks successfully moving away from decarbonization.

Why urban heating is crucial for net-zero goals

Heating in cities: the hidden carbon footprint

A look at data on urban heating’s carbon footprint provides an accurate picture on its contributions to cities’ emissions. 

In fact, the World Economic Forum cites heat as “the elephant in the room for decarbonization”: while half of heating demand is related to industrial processes, domestic heat also plays a key role, with 60% of home energy demand in the United States and 80% in Europe being used for heating.

Meanwhile, the International Energy Agency recognizes space and water heating as accounting “for almost half of global energy use in buildings.” 

Urban heating as a decarbonization lever

These figures highlight urban heating as a key lever in the path toward decarbonization.

For example, Eurostat data shows that 70% of the energy consumed for heating in European countries still comes from fossil fuels. While this underscores the current challenges for climate action, it also reveals the significant potential of transforming urban heating networks into sustainable, clean systems to achieve net-zero cities.

As explored further in this article, heating technologies such as district heating already offer viable alternatives that reduce reliance on carbon-intensive processes. As such, district energy networks have been described as “a key stepping stone to meeting zero-carbon heating and cooling” by the IEA.

At the heart of this potential lies the ability of these systems to accommodate a wide range of energy sources, including heat pumps, which the European Commission has noted could reduce Europe’s gas demand for heating in buildings “by at least 21 billion cubic meters in 2030, as published by the European Commission. 

As such, existing technologies and current fast advancements in thermal engineering are offering alternatives today for eco-friendly heating in cities. 

Shifts in urban heating moving towards the green transition

Developments in using renewable and recovered heat

Major shifts are already taking place as urban heating networks increasingly harness the potential of renewable and recovered heat, with heat pumps emerging as the cornerstone technology in this transition.

Renewable sources such as geothermal, solar thermal, or seawater heating systems, together with recovered heat from industrial processes, data centers, or wastewater, are becoming critical contributors to sustainable urban heating. At the center of this transformation are heat pumps, which enable these diverse sources to be efficiently upgraded and integrated into district heating networks.

Meanwhile, recovered heat is grounded in circular economy models: heat that would otherwise be wasted away (from industrial processes, data centers or wastewater) is treated and employed to provide urban heating. 

These two approaches are allowing urban heating networks to move away from relying on fossil fuels and lower their greenhouse gas emissions, while also fundamentally shifting notions of local energy production and resilience.

Figures by the IEA provide a more detailed picture of what energy sources in particular are playing a lead role in heat decarbonization. Their report cites how low-temperature district heating, heat pumps, solar thermal and other sources such as deep geothermal are set to be crucial in achieving net-zero cities. 

Additionally, technological advances in the fields of carbon capture and Power-to-X fields are also cited as capable of great contributions to decarbonizing urban heating in the coming years.

Policy support and climate goals

The move towards decarbonized economies is showing how critical alignment between climate goals and policy support is.

On the one hand, national policies and international treaties are responsible for setting emissions targets, generating urgency and direction. 

Meanwhile, actual policies and financial incentives are capable of prompting action, so that planning and investments towards decarbonized technologies remain solid choices for stakeholders.

In the case of district heating, close alignment between public entities, energy providers and stakeholders is proving critical to ensure successful implementation that balances consumer needs, climate goals and corporate interests. 

For instance, some cities are legislating to make connection to district heating mandatory, ban carbon-intensive heating technologies or make renewable heating mandatory in new or retrofitted projects. These are accompanied by relevant subsidies and efforts on educating consumers about the benefits of district heating, while also regulating heating tariffs to be transparent and competitive.

The technologies powering sustainable urban heating

4th and 5th generation urban heating networks

Urban heating networks are undergoing a major transformation towards low-carbon solutions.

The new generations of district heating (4th and 5th) rely on lower supply temperatures, which makes them inherently more efficient and suitable for integrating a wide mix of energy sources. In this context, heat pumps stand out as the technology that bridges renewable and recovered heat with urban demand, providing the flexibility to connect sources such as wastewater, industrial excess heat, or geothermal energy to district systems.

Beyond decarbonization, these networks are paving the way for innovative heating models. By combining large-scale heat pumps with digital control and advanced system design, district heating can evolve into distributed and highly resilient infrastructures, capable of balancing efficiency, sustainability, and energy security in cities.

Smart grids and digital optimization

The integration of smart digital technologies into urban heating systems is allowing for crucial optimizations that improve this model’s reliability and efficiency.

Among the key technological innovations are smart systems that use real-time data to balance supply and demand; predictive maintenance programs that lower operational costs; and technology that allows better user control and transparency around energy use.

Thermal storage and sector coupling

Technologies for thermal storage such as TES tanks are also involved in decarbonizing urban heating networks. Capable of storing heat energy, they are able to optimize heating systems and reduce energy demand by shifting heat production to off-peak hours. As such, the technology is crucial for the next generation of urban heating, balancing supply and demand fluctuations, while also enabling the integration of intermittent renewable energy sources, such as wind or solar.

Meanwhile, sector coupling initiatives aim at avoiding energy waste and generate flow between sectors, thus continuing working towards greater efficiency and decarbonization. This involves scenarios where excess heat from industrial processes can be redirected to urban heating, while also receiving extra energy as required.

Case studies: cities leading in urban heating transformation

With district energy representing a key solution for sustainable urban heating, a look at its development across the globe provides a detailed picture of relevant trends for this model.

Today, district heating represents 10% of global heat demand in buildings, while some countries have escalated its implementation to reach more than 60% of their heating demand. By 2030, it’s expected to cover 20% of global demand, with 350 million buildings connected to district energy networks, according to IEA figures. 

Some innovative examples of transformation and movement in urban heating include: 

• Oslo’s scheme for employing various sources of heat (including waste, excess heat from data centres and from sewage, among others) as part of their district heating network. This was accompanied by a ban on employing fossil fuels for heating purposes.
• Stockholm drives its district heating by excess heat from industrial processes, including data center operations.
• Excess heat from the London Underground is being harnessed to heat homes.
• An array of energy sources (from wood chips to biomethane, among others) have replaced coal in driving Heidelberg’s district heating network. The system is expected to stop using fossil fuels entirely by 2030.
• In Tallinn, 70% of their 520-kilometers long district heating system is decarbonised. It is expected to decouple from gas by 2030, by focusing on sources like solar thermal and seawater heat pumps.

In our ebook District energy in cities  you can discover the present and future of district energy systems and how cities like Tokyo, Paris or Copenhagen have improved their performance with these systems.

h3: Copenhagen: world leader in district energy

With 65% of heat demand in the country being covered by district heating, Denmark stands out as one of the most mature and extended sustainable urban heating networks in the world today.

In the case of Copenhagen, district heating supplies 98% of urban heating networks. Largely producing heat from cogeneration systems based on waste and sustainable biomass, it also incorporates heat pumps as well as heat accumulators to optimize efficiency.

Challenges and considerations in scaling urban heating

Infrastructure investment and legacy systems

While great advancements are taking place worldwide in moving urban heating towards sustainable options, infrastructure investment requirements are often cited as challenges.

Although it represents a cost-effective approach in the long term, new projects are costly and logistically complex. Meanwhile, modernizing and decarbonizing district heating legacy systems also represents a capital-intensive initiative, requiring dedicated expertise and organizational knowledge. 

These two realities are capable of slowing down district heating initiatives, as stakeholders navigate the intricate realities of each project’s needs. In this context, alignment between favourable public policies from authorities, thermal engineering experts and companies has proven key to overcoming this challenge.

Equity, governance and user acceptance

As urban heating networks directly affect citizens’ comfort and economic well-being, public acceptance of these initiatives is crucial.

District heating projects therefore benefit from being developed within frameworks guided by principles of equity and good governance. This entails designing systems that provide sustainable access to heating while ensuring affordability, reliability, and inclusivity, with transparency and user information placed at the center.

Denmark’s success in implementing district heating offers valuable lessons, including the establishment of elected consumer advisory boards and the creation of consumer cooperatives.

Future outlook: urban heating networks in 2030 and beyond

As noted above, the IEA predicts that district heating will meet 20% of global space heating demand, connecting some 350 million buildings to district energy networks.

Current trends in the most advanced urban heating systems point to the shape of next-generation heating: integrated systems that combine multiple energy sources, move away from carbon-intensive processes, leverage technologies to maximize efficiency, and are tailored to the local resources and potential of each location.

In this context, lessons from successful implementations show that success often depends on building strong alliances among policymakers, thermal engineering experts, financing actors, and urban communities—all working together toward the decarbonization of urban heating.

At ARANER, we put our thermal engineering expertise to work through our cutting-edge district heating solutions. Experts in designing ad-hoc solutions based on each project’s needs and potential, we’re committed to devising and implementing reliable, cost-efficient urban heating networks that help cities advance towards net-zero goals.

Get in touch with us to learn how we help district heating developments succeed.