The location determines whether to use a heat pump or the utility grid

The debate over the future of heating is often driven by ideology. Municipal heating plans in Germany now paint a much more realistic picture. Heat pumps and district heating networks are expected to collectively meet just under four-fifths of heating demand by 2045. In the target scenarios examined, the phase-out of natural gas and heating oil is thus no longer a long-term goal, but rather a matter of concrete infrastructure planning.

For the second edition of the study “Municipal Heating Planning in Germany,” Fraunhofer ISE and the Öko-Institut analyzed 377 heating plans from 938 municipalities. The data set is thus significantly broader than in the first study in 2025, which included 113 plans for 223 municipalities.

The result is clear. Heat pumps are expected to account for about 41 percent of the heat supply by 2045. District heating networks are expected to provide an additional 36 percent. Together, they form the backbone of the planned heat supply. However, there is no one-size-fits-all solution. In small and medium-sized municipalities, decentralized heat pumps dominate. Densely built-up cities rely more heavily on piped heating. Key factors include local heat sources, settlement structure, existing pipelines, and the respective development strategy.

Heating networks are growing rapidly
Already today, 71 percent of the municipalities surveyed have at least one heating network. By 2030, this share is expected to rise to 91 percent, and by 2035 to 95 percent. The share of heat supplied via district heating networks in these municipalities is expected to increase from around 15 percent today to 38 percent in 2045.

This is a key message for municipal utilities, grid operators, and the real estate sector. Heat planning is becoming the blueprint for expanding power grids, district heating pipelines, and the phased transition away from natural gas distribution networks. It plays a decisive role in determining which investments in neighborhoods, residential areas, and commercial zones make sense in the long term.

The Unresolved Issues
However, the study also highlights where many target scenarios are still not robust enough. Across all the plans examined, final energy demand for heat is projected to decrease by about 32 percent by 2045. Two-thirds of the municipalities anticipate renovation rates exceeding the historical average of about one percent per year to achieve this. Whether this higher pace can be achieved often remains unclear.

This is more than just a methodological question. If renovation proceeds more slowly than planned, heating demand will rise. In that case, power grids, heating networks, and generation facilities will need to be scaled up. Municipalities should therefore also incorporate less ambitious renovation pathways into their infrastructure planning.

Biomass Is Becoming Scarce
The role of biomass is particularly critical. In 63 percent of the municipalities analyzed, the planned consumption of biogenic energy sources for 2045 exceeds the locally reported potential. Across all plans, the expected demand exceeds the available potential by nearly 40 percent.

Many municipalities are thus implicitly counting on imports from other regions or abroad. If this happens simultaneously in many places, competition for resources will arise. Biomass remains valuable, but limited. It is not suitable as an unlimited stopgap for every heating plan.

Hydrogen Remains a Complement
Hydrogen, too, is not the universal solution. About two-thirds of the municipalities surveyed do not plan to use hydrogen by 2045. Where it is planned, this primarily concerns industrial applications and peak loads in heating networks. It plays only a minor role in the decentralized heating of buildings.

The heating transition arises from the interplay of building retrofits, heat pumps, networks, and locally available sources such as waste heat or geothermal energy. Municipal plans provide a roadmap for this. Now, networks, investments, and actual retrofits must follow.