District heating networks in the Netherlands: a key role in the energy transition
District heating networks are collective systems that provide heat to buildings, often using residual heat from industry, waste incineration, or renewable sources such as geothermal energy. They are an important alternative to natural gas and play a major role in the Dutch energy transition. But how exactly do district heating networks work, what are the benefits and challenges, and what will change from 2026?
How does a district heating network work?
In a district heating network, heat is generated centrally and distributed to homes and businesses via pipelines. For example, a factory may produce residual heat or an installation may harness geothermal energy. This heat is transported through insulated pipes to a neighborhood or business park, where it is used for space heating and hot tap water.
New rules from 2026: the Collective Heat Act (Wcw)
Starting in 2026, the organization of district heating networks will change significantly. With the Collective Heat Act (Wcw), municipalities will take the lead. They will decide who is allowed to build and operate a heat network, and at least half of the company must be publicly owned.
In addition, tariffs will no longer be linked to natural gas prices but will instead be based on actual costs. This will provide greater predictability and reduce dependence on volatile energy prices.
Want to dive deeper? Read our detailed blog:
Pros and cons of district heating networks
Like any energy solution, district heating networks have both strengths and challenges.
Advantages:
- Sustainable: Uses residual heat and renewable sources such as geothermal energy.
- Efficient: Collective heat supply is often cheaper and more efficient than thousands of individual boilers.
- Space-saving: No need for a boiler or large installation in every building.
- Less dependent on gas prices: With the new law, tariffs will be cost-based and more predictable.
Drawbacks:
- High investment costs: Building district heating networks requires large investments and long payback periods.
- Limited choice for consumers: Once connected, residents usually cannot easily switch suppliers.
- Dependence on heat source: If a source fails, it can affect the entire network.
- Affordability and transparency: Residents must be able to trust that tariffs remain fair and transparent.
Striking the right balance depends on cooperation between municipalities, heat companies, and residents—as well as on smart monitoring and management systems that ensure efficient use.
Practical case: EcoFocus and smart energy management
A good example of the value of smart solutions in district heating is the collaboration between EcoFocus (EVE) and Aurum. EcoFocus develops and manages sustainable energy solutions, including district heating networks. To increase the reliability and efficiency of their networks, they chose EnergyGrip as an independent platform for monitoring and control.
With EnergyGrip, EcoFocus gains:
- Realtime insight into heat production and consumption per connection.
- Reliable billing through automated data collection.
- Faster detection of anomalies, making faults or energy waste immediately visible.
- Better customer communication, as residents can transparently view their consumption.
This approach shows that a district heating network is not just about delivering sustainable heat, but also about data and smart management. Monitoring and automation make the system more reliable, transparent, and future-proof.
Want to know more about this project?
Read the EcoFocus case study.
Conclusion: district heating as a building block for a sustainable future
District heating networks can make a major contribution to the energy transition—if they are designed and managed smartly. With the new legislation from 2026, there will be greater emphasis on public ownership, affordability, and reliability. This presents both opportunities and challenges for residents and businesses.
Investing in transparency, innovation, and smart energy management systems will be key to ensuring district heating is not only sustainable but also efficient and customer-focused.
Frequently asked questions about district heating in the Netherlands
What is a district heating network in the Netherlands?
A district heating network is a collective system that generates heat centrally and transports it through pipes to homes and businesses. The heat often comes from industrial residual heat, waste incineration, or renewable sources like geothermal energy. It replaces natural gas for heating and hot water.
How does a district heating network work in practice?
Heat is produced at a central location and distributed through insulated pipes to connected buildings. Each building has a heat exchanger instead of a boiler, ensuring efficient distribution without the need for local gas.
What changes in 2026 for district heating networks?
From 2026, the Collective Heat Act (Wcw) applies. Municipalities decide who can build and operate heat networks, with at least 50% public ownership required. Tariffs will also be based on actual costs instead of gas prices, making them more predictable and affordable.
How much does it cost to connect to a district heating network?
Costs vary by project and municipality. For households, connection fees typically range from €3,000 to €5,000. For businesses, costs are custom and often higher. Subsidies such as ISDE (for homeowners) and WIS (for municipalities/companies) help reduce barriers.
Which subsidies are available for district heating in 2025 and 2026?
– WIS (District Heating Investment Subsidy): covers 30–50% of investment costs for building or expanding networks.
– ISDE (Sustainable Energy Investment Subsidy): homeowners receive €3,775 for connecting to a district heating network.
What are the advantages of district heating?
– Sustainable: uses residual and renewable heat sources.
– Efficient: often cheaper and more space-efficient than individual boilers.
– More predictable energy costs thanks to cost-based tariff rules.
– Future-proof alternative to natural gas.
What are the disadvantages of district heating?
– High investment costs and long payback times.
– Limited consumer choice once connected.
– Dependence on the availability of heat sources.
– Strong need for affordability and transparency in tariffs.
Is a district heating network suitable for businesses?
Yes, especially for companies with large or continuous heat demand. A connection provides predictable energy costs and helps reduce CO₂ emissions. With smart monitoring tools such as EnergyGrip, businesses gain insight into their usage and can minimize costs and waste.