In this work, the novel concept of non-uniform temperature district heating (NUTDH) system with decentralized heat pumps and standalone heat storage units (HPHS) is proposed. In the NUTDH-HPHS system, the temperature within the transmission pipeline is always at the ultra-low level of 35-40 degrees C, which is sufficient for space heating use. The heat pumps will increase the temperature within the distribution pipes to 70 degrees C during a short period of time a day. This temperature is to provide the domestic hot water (DHW) need of the consumers. Heat pumps are sized in neighborhood scale, and as each neighborhood is supplied with a high temperature just for a short time a day, each heat pump may be assigned for a few neighborhoods. As not always high-temperature water is available, the substations are equipped with storage tanks. In this system, the rate of heat loss is minimal, legionella risk is absolutely zero, and there is a strong synergy between the power and heat sectors. The system is designed and analyzed for a case study. The results are also compared with the performance of other popular district heating (DH) schemes. It is demonstrated that the NUTDH-HPHS system shows the best performance. (C) 2018 Elsevier Ltd. All rights reserved.