District heating can provide cost-effective and low-carbon energy to local populations. Although this is rare in the UK, Sheffield already has an award-winning district energy network. It has been previously determined that this could be expanded to incorporate new heat sources and sinks. This paper determines the environmental and socio-economic impacts, focussing on various fuels. Combined-heat-and-power generation in Sheffield coupled with sustainable/renewable fuels, like waste, offer high efficiencies (>77%) and consistently lower carbon emission factors (0.04-0.14 kg/MJ) than conventional energy generation using fossil fuels, since up to 80% of the fuel-carbon is biogenic (CO2-neutral). Processing municipal waste into a refuse-derived fuel prior to combustion or lowering the return-water temperature by 35 degrees C in the district heating network could further improve efficiencies (81-93%) and reduce CO2 emission rates by 4 t/h for the Sheffield plant, increasing avoided emissions from 69,000 t/a to 80,000-91,000 t/a. Moreover, ways in which the energy supply could be further decarbonised were identified, as well as methods to minimise the impacts of responding to changes in demand. Though initial costs of such schemes are high, they can be economically-viable for the investor/operator and consequently offer competitive rates for customers. Financial support is also available through government-backed schemes. (C) 2012 Elsevier Ltd. All rights reserved.