EHPC 2026 reflections: The heat transition is gathering pace - next challenge is commercial execution

The Euroheat & Power Congress in Kraków was a reminder of just how quickly the district energy sector is evolving. One of the clearest messages from the conference was that heat decarbonisation has moved beyond pilot projects and into large-scale delivery programmes. 

Across Europe, governments and municipalities are committing significant funding to support network modernisation, fuel switching and low-carbon heat generation. The business case for decarbonisation is strengthening, supported by policy direction, energy security objectives and growing pressure to reduce emissions. 

From a commercial perspective, however, public funding is only part of the story. 

The challenge now is attracting private capital at the scale required to deliver the transition. That means developing credible, bankable structures that can effectively blend grants, debt and equity while providing investors with appropriate risk-adjusted returns. 

The conversation is increasingly shifting from "How do we fund this project?" to "How do we structure it so institutional capital can participate?" 

From technology selection to investable energy systems 

One of the strongest themes throughout the Congress was the growing recognition that no single technology will replace coal. 

Decarbonisation pathways are becoming increasingly technology-diverse, combining electrification, thermal storage, waste heat utilisation, biomethane from sustainable sources and, in some markets, emerging technologies such as small modular reactors (SMRs). 

As a result, value creation is increasingly moving beyond individual assets and towards integrated energy systems. 

A standout moment came when a speaker described data centres as "electric boilers for future heat networks". While deliberately provocative, it neatly captured the changing mindset. The opportunity is no longer simply about building new generation assets. It is about identifying, capturing and monetising heat sources that already exist. 

The commercial challenge is creating business models where value comes from system optimisation, flexibility and integration rather than the performance of individual assets alone. 

CHP is evolving, not disappearing 

While decarbonisation strategies are changing the role of CHP, there was little indication at the Congress that the technology is disappearing. 

Instead, CHP is evolving from a generation asset into a flexibility asset. 

Power market participation, balancing services and flexibility revenues are becoming increasingly important alongside traditional heat sales. For operators and investors, this creates opportunities to diversify revenues and improve project economics. 

The challenge will be developing commercial frameworks that appropriately value flexibility, resilience and system support services, rather than relying solely on heat demand to underpin investment returns. 

Different markets, different risk-return profiles 

The Congress highlighted the diversity of district heating markets across Europe. 

In Central and Eastern Europe, extensive existing networks provide a strong platform for decarbonisation and infrastructure modernisation. In the Nordics, more mature systems are demonstrating how integrated low-carbon heat networks can create value through flexibility, waste heat utilisation and participation in power markets. 

For investors, these are fundamentally different opportunities. 

Each market presents a distinct combination of regulatory risk, construction risk, operational complexity and revenue certainty. The challenge is not simply raising capital, but matching the right capital to the right opportunity and aligning investor expectations with project risk profiles. 

Cities remain where the opportunity lies 

Cities continue to offer some of the strongest foundations for heat decarbonisation, combining dense demand, existing infrastructure and access to untapped waste heat sources. 

However, many projects remain embedded within municipally owned structures. 

As a result, ownership models, governance arrangements and risk allocation are becoming increasingly important considerations. Attracting private capital while maintaining public objectives requires carefully structured partnerships that align incentives across municipalities, utilities, developers and investors. 

Getting those commercial structures right is often just as important as the technology itself. 

Funding is available, but projects still need to be investable 

A recurring theme throughout the Congress was that funding opportunities continue to grow. 

EU and national programmes are providing significant support for project development and delivery. Yet funding availability does not automatically create investment-ready projects. 

The challenge remains translating technically sound concepts into bankable opportunities with robust financial models, clear contractual frameworks and transparent risk allocation. 

For many projects, the limiting factor is no longer technology or funding availability. It is the ability to demonstrate investable economics and a credible pathway to delivery. 

Looking ahead 

My overall outlook after attending EHPC 2026 is positive. 

Technology is advancing. Policy direction is becoming clearer. Capital is available. 

The real challenge now is commercial execution. 

Success will depend on structuring projects, partnerships and financing models that can deliver the heat transition at scale while remaining investable over multi-decade time horizons. The projects that succeed will be those that can align public objectives, private capital and long-term operational performance within commercially sustainable delivery models. 

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EHPC 2026 highlighted that the opportunity in heat transition is growing. The challenge now is translating that potential into projects that can be delivered and financed successfully. 

We're looking forward to continuing many of the conversations started in Kraków. If you're developing district heating or heat decarbonisation projects and are facing financing, commercial, regulatory or delivery challenges, we'd be happy to discuss how Amberside Advisors can help. Our team supports clients in creating robust commercial structures, securing funding and developing bankable, investable propositions that can attract capital and deliver long-term value.