This paper elaborates the concept of the renewable district heating system (DHS) in Municipality of Visoko, Bosnia and Herzegovina, as part of the CoolHeating project funded by the EU's Horizon 2020 programme, which is going to be integrated into the planned DHS supplied by a combined heat and power facility (CHP). Forecast of the demand, type and capacities of the production units, as well as optimization of the production plan, was performed by the software EnergyPRO. Calculations are based on inputs such as climate conditions, connection rate for housing facilities, prices of all energy sources, energy efficiency performance of the facilities, temperature level of DHS, heat losses, investment costs, operating costs such as maintenance costs, fuel and electricity prices, taxes, subsidies and finally operating time, while the period for the optimization was calculated per hour throughout the year. The overall approach leads to a flexible modular DHS solution based on RES and CHP. Much better economic and environmental sustainability indicators, demonstrated on real inputs of the Visoko project, have been noticed as opposed to the existing heating solution. Similar concepts can be developed for other communities to ensure replication and thus multiply the effects and contribution to sustainable development. (C) 2019 Elsevier Ltd. All rights reserved.