Abstract. In line with the Renewable Energy Directive (2009/28/EC), EU member states have intensified their efforts to increase the share of renewable energy in energy supply. Renewable energy sources will be a challenge for the current district heating concept, requiring system flexibility both in terms of heat supply and heat consumption. Besides, they are hard to accommodate in areas with high population density, as it is the case with many towns and cities. The municipalities will have to identify suitable locations, which in turn will lead to distributed heat supply. The requirement of the 2010/31/EU (EPBD) Directive that all new buildings will have to be nearzero energy buildings will result in buildings fitted with solar collectors; some buildings will produce more energy than they can use. To accommodate all these challenges, the scientists have come up with the new concept of Thermal Smart Grids. The renewable energy will then be shared with the whole district heating grid, and the network will also be used for heat storage when consumption is lower than production. Smart thermal grids are expected to be an integrated part of the future smart energy systems, integrated electricity, gas and thermal grids.