Drinking water distribution networks (DWDNs) have a huge potential for cold thermal energy recovery (TED). TED can provide cooling for buildings and spaces with high cooling requirements as an alternative for traditional cooling, reduce usage of electricity or fossil fuel, and thus TED helps reduce greenhouse gas (GHG) emissions. There is no research on the environmental assessment of TED systems, and no standards are available for the maximum temperature limit (Tmax) after recovery of cold. During cold recovery, the water temperature increases, and water at the customer’s tap may be warmer as a result. Previous research showed that increasing Tmax up to 30 °C is safe in terms of microbiological risks. The present research was carried out to determine what raising Tmax would entail in terms of energy savings, GHG emission reduction and water temperature dynamics during transport. For this purpose, a full-scale TED system in Amsterdam was used as a benchmark, where Tmax is currently set at 15 °C. Tmax was theoretically set at 20, 25 and 30 °C to calculate energy savings and CO2 emission reduction and for water temperature modeling during transport after cold recovery. Results showed that by raising Tmax from the current 15 °C to 20, 25 and 30 °C, the retrievable cooling energy and GHG emission reduction could be increased by 250, 425 and 600%, respectively. The drinking water temperature model predicted that within a distance of 4 km after TED, water temperature resembles that of the surrounding subsurface soil. Hence, a higher Tmax will substantially increase the TED potential of DWDN while keeping the same comfort level at the customer’s tap.