This article focuses on district hearing and especially on CHP (Combined heat and power generation) district heating. In particular, the author aims at highlighting the real technological and economic nature of this kind of energy supply. This in order to check how useful heat delivered to final consumers is priced. Three basic topics are analyzed. Firstly, the author focuses on technological issues. Secondly, he investigates the structure of CHP costs in order to understand whether this activity is a natural monopoly and/or whether inter-fuel competition is effective enough. Finally, the author discusses about the need of pricing regulation.
Keywords: District heating, inter-fuel competition, pricing regulation JEL classification: Q42, L51