Municipal heating plans are based on two pillars

August 6, 2026

Source: E & M powernews

Municipal heating plans rely primarily on heat pumps and district heating networks. At the same time, key questions remain unanswered regarding building retrofits, biomass, and process heat.

Municipalities are focusing their future heating supply primarily on heat pumps and district heatingnetworks. This is shown in the second edition of the study “Municipal Heating Planning in Germany” by the Öko-Institut and the Fraunhofer Institute for Solar Energy Systems (Fraunhofer ISE). The Öko-Institut conducts research and provides consulting on environmental and climate issues. The Fraunhofer ISE, headquartered in [location], studies energy systems based on renewable energy sources.

For the new analysis, the researchers examined approximately 380 heating plans for about 940 municipalities. As a result, the study draws on a significantly broader data set than the first edition from May 2025. Most of the newly included plans were already developed in accordance with the Heating Planning Act.

According to the targets set out in the municipal heating plans, heat pumps are expected to account for about 42 percent of the heat supply by 2045. District heating networks will account for an additional 37 percent. Together, these two technologies will cover just under four-fifths of the projected heat demand. Smaller and medium-sized municipalities rely particularly often on decentralized heat pumps. Larger and more densely built-up cities are planning more heavily with district heating networks.

“The significantly broader data set confirms that heat pumps and district heating networks form the backbone of the municipal heating transition,” says Marc Stobbe, an energy expert at the Öko-Institut. To ensure more robust planning, he calls for more transparent assumptions regarding process heat and more specific guidelines for the use of biomass.

District Heating Networks Are Expanding

Already today, 71 percent of the municipalities surveyed have at least one district heating network. By 2030, this share is expected to rise to 91 percent, and by 2035 to 95 percent. At the same time, the municipalities aim to increase the share of heat supplied via district heating networks from around 15 percent to 38 percent by 2045.

However, many plans regarding future heat generation remain vague. More than half of the plans lack details on the intended energy sources. Where municipalities make specific assumptions, they often combine heat pumps with biogenic energy sources. Depending on the location, industrial waste heat and geothermal energy supplement this mix.

Jessica Thomsen, project manager at Fraunhofer ISE, points to varying local transformation pathways. Local heat sources, existing infrastructure, population density, and strategic decisions determine which solutions are appropriate in each case. She does not see a one-size-fits-all approach for all municipalities.

Assumptions regarding building retrofits also influence infrastructure planning. Across all heating plans, the assumed final energy demand for heating is projected to decrease by approximately 32 percent by 2045. Two-thirds of municipalities expect an annual retrofit rate above the historical benchmark of about one percent. It often remains unclear under what conditions they intend to achieve these targets. The institutes therefore recommend transparently disclosing demand assumptions and also factoring in less ambitious trajectories.

Biomass and process heat remain uncertain

In 63 percent of the municipalities examined, the planned biomass consumption for 2045 exceeds the locally reported potential. Across all plans, the projected consumption exceeds the potential by nearly 40 percent. Many municipalities are therefore counting on biomass from other regions or from abroad. According to the study, if numerous heating plans make the same assumption, competition for resources may arise.

Furthermore, differing terms and definitions make comparisons difficult. The plans do not always specify which residual materials, land areas, or wood types they include, nor do they clarify which sustainability requirements apply. In the institutes’ view, more standardized definitions could improve planning.

Two-thirds do not plan to use hydrogen

The researchers also identify gaps regarding industrial process heat. About two-thirds of municipalities provide data on the heat demand of industry, as well as commerce, trade, and services. On average, these sectors account for about 27 percent of heat demand; in heavily industrialized municipalities, they account for more than half. Nevertheless, the plans rarely distinguish between space heating, hot water, and process heat. As a result, required temperature levels and future energy sources remain unclear.

This distinction also plays a role in determining potential hydrogen demand. About two-thirds of municipalities do not plan to use hydrogen by 2045. Where they do consider hydrogen, it is primarily intended to cover industrial applications and peak loads in heating networks. For the decentralized heating of buildings, it appears only sporadically and with reservations.

The study “Municipal Heat Planning in Germany—Evaluation of Completed Heat Plans in the KOMpare Project,” dated July 2026, can be downloaded from the Fraunhofer ISE website.

Author: Davina Spohn