This dissertation has been stimulated by the potential DH has in de-carbonising the UK’s heat supply. The development of environmentally sustainable heat networks considers the use of low carbon fuels and efficient heat distribution. The energy efficiency of DH systems is dependent on the thermal demand density of the supplied urban area. It is, therefore, imperative that their development is limited to areas that have a high enough heat demand density. This relationship has been explored to determine the energy efficiency of a wood pellet LTDH system and MTDH system supplying a new, residential development with a low heat demand density. An assessment of each system’s CO2 emissions has also been undertaken. The study is comparative by nature; the results have been compared to the seasonal efficiency and carbon performance of domestic condensing boilers, connected to the central gas supply.