District heating could reach 20 million homes

June 18, 2026

Source: E & M powernews

The heating transition could rely more heavily on district heating than it has in the past. This is shown by the new District Heating Atlas from Prognos for Germany’s counties and cities.

The new district heating atlas from Prognos AG reveals significant potential for expanding district heating. For the study, the Basel-based consulting and research firm analyzed the framework conditions in all 401 counties and independent cities in Germany.

According to Prognos, by 2045, nearly one in two homes in Germany could, in principle, be supplied with district heating. Currently, district heating covers only about 10 percent of the heating demand for all homes. If all suitable areas were developed, this share could rise to as much as 48 percent. The number of homes that are fundamentally suitable for district heating would thus grow from 6.4 million today to around 20 million.

For the analysis, Prognos modeled the residential building stock, heating demand, and local conditions across the entire territory of Germany. The results show significant regional differences. In nearly half of all districts, the conditions for the expansion and decarbonization of district heating are good or very good. Prognos identifies particularly favorable conditions in Berlin, Hamburg, as well as in Brandenburg, Mecklenburg-Western Pomerania, and Saxony. In many of these areas, heating networks already exist that operators could densify and expand.

“Hidden Champions” Uncovered

Study director Noha Saad points to major regional differences in the conditions for district heating. The atlas illustrates the current situation for district heating across a spectrum ranging from metropolitan regions to rural areas. Municipalities that have not yet finalized their heating plans, in particular, could use the data as a guide.

Another finding is likely to be relevant for many municipal utilities: The study identifies several regions that currently have only a small share of district heating but simultaneously offer favorable conditions for expansion. Among the counties and cities designated by Prognos as “hidden champions” are Konstanz, Memmingen, and Worms.

Greater Challenges in Rural Regions

While cities often offer good conditions for district heating, Prognos sees greater hurdles in many rural regions. According to the District Heating Atlas, about seven percent of districts face very difficult conditions for expanding district heating. This primarily affects smaller cities and municipalities without existing district heating infrastructure. Unlike many large cities, they cannot expand existing networks but would first have to build new district heating systems from scratch.

According to Prognos, the difference between urban and rural areas is particularly evident in current supply levels. In cities not part of a county, the share of district heating is already four to five times higher than in rural districts. In 55 cities, this share could rise to more than 75 percent in the future. The study cites Flensburg, Kiel, Wolfsburg, Mannheim, and Rostock as examples, where district heating already covers more than half of the heating demand in some cases.

In many rural regions, however, low heat densities make it difficult to establish economically viable heating networks. In other words, heat demand there is not concentrated in densely built-up neighborhoods but is spread over larger areas. As a result, long pipelines must be laid for a comparatively small number of customers. According to Prognos’ assessment, other technologies—such as heat pumps or pellet heating systems—will play an important role in the heat transition in these areas.

Focus on Renewable Heat Sources

Whether district heating networks are expanded also depends on how climate-friendly the heat generation process is. Today, a large portion of district heating comes from power plants that produce both electricity and heat, as well as from waste-to-energy plants. In the future, heat generation is expected to rely more heavily on renewable sources. Against this backdrop, Prognos analyzed the regional potential of geothermal energy, water-based heat, industrial waste heat, wastewater treatment plants, and solar thermal energy. According to the company’s assessment, many district heating systems could rely predominantly on local renewable heat sources in the future.

Even with district heating accounting for 48 percent of the total, more than half of the heat generated in ten federal states could come from local renewable sources. For Hamburg and Bremen, the analysis even identifies a potential of up to 100 percent. Prognos also sees significant potential in Mecklenburg-Western Pomerania and Brandenburg.

Industrial waste heat could make a contribution in cities such as Karlsruhe and Ludwigshafen, as well as in Gelsenkirchen, Duisburg, and Bottrop. Where local potential is lower, Prognos suggests that air-source heat pumps, among other measures, could contribute to decarbonization.

The District Heating Atlas is available on the Prognos website. Municipalities and municipal utilities can use it to view the expansion and decarbonization potential in their region.

Author: Davina Spohn