In the cold Estonian climate, homes consume more heat than electricity, as buildings need to be heated for approximately two-thirds of the year. To meet this need, most Estonians use district heating, thanks to over 200 district heating systems spread across the country. District heating is simple and reliable: consumers do not have to worry about buying fuel, installing a boiler, or maintaining it.

Today, about 70% of district heating in Estonia relies on renewable energy or excess heat. In some cities such as Tartu, Pärnu, Keila, Kärdla, Rapla and Paide, the share of renewable energy use already exceeds 95% of the total. The main energy source is local biomass (wood chips), which is derived mainly from timber and logging industry residues. The sustainability of bioenergy in larger production units has been certified and the supply chain is fully traceable.

The way heat is produced has changed consistently through the years. While 15 years ago most of the district heat was produced in boiler houses, now it is mainly produced in heat and power cogeneration plants (CHPs). The efficiency of energy production in these plants can reach almost 100%, meaning there are almost no energy losses.

The shift to renewable energy and modern technologies has also benefited consumers. In district heating areas where renewable energy and other environmental technologies have been introduced, the price of heat is also in general more affordable than in other areas. The future-oriented investments of heat producers, along with stable government support, in renewable energy but also in the modernization of heat pipelines, cogeneration plants and boiler houses have helped keep the prices down.

In addition, the use of local bioenergy helps to increase security of supply, reduce energy dependence, promote circular economy, create jobs in rural areas and mitigate climate change. Estonia sets an example for the rest of Europe in the sustainable development of the heating sector by utilising local renewable energy, efficient heat and power cogeneration and widespread and affordable district heating.