A district heating system works like a large central heating system that supplies heat to several buildings, a district or a city, through an underground network of pipes. The energy comes from a centralised energy center which produces heat locally from different energy sources: thermal, renewable (biomass, geothermal, solar), heat recovery (incineration of household waste, biogas, wood-waste, etc.). The heat is then distributed in the form of hot water and transmitted to each unit via an individual substation located between the heat network and the building's heating circuit.
There are currently some 6,000 district heating networks in Europe, covering 11 to 12% of needs, with very different situations from one country to another. District heating is by far the most widespread form of heating in Northern and Eastern European countries, whereas it is much less developed in the West, particularly in the Netherlands and the UK.