Since the 70s of last century, precisely in 1973th when the first oil crisis happened due to a sudden increase in the price of oil, and 1979th when the second oil crisis happened, energy has become one of the priority themes of the European Union. In terms of the common electricity and natural gas market through the Directivesof the European Union (2009/72/EC and 2009/731EC),large progress has been made. Transmission/transportation and distribution networks have become associated entity which provides access to all producers and customers within a single market of the European Union, with the aim of competitive production and supply of energy. Increased number of bidders has forced companies to be more competitive in production and to offer more innovative solutions. Due to the liberalization of the market,it is necessary to protect end users as well as companies that have network (regulated) activity.In this case the national regulator has the essential role to ensure safe and inexpensive transmission and distribution of energy to end users through optimal investment costs, and in the same time to ensure return of investments for energy operators. There is a large number of examples of bad praxiswhich influenced on the lack of competitiveness of individual energy systems, and it is the reason why the national regulator is so important in protection of both participants. The European Union did not deal with the district heating through the Directives, due to the fact that the transfer of thermal energy among Member States is not expected because of the large loss of the thermal energy over a long distances.Therefore, the district heating is left at the legislation of the Member States, so that the intensity of development district heating, especially liberalization, depends on the strategic development and knowledge of the country. Most transitionment of the country, so they had bad experiences.However, district heating with a well defined legal framework and of course, with a good awareness of the citizens themselves, has great advantages. The most important thing is that one network can receive thermal energy from different energy sources enabling diversification of sourceswhich may have an impact onthe price of primary energy, and consequently the price of thermal energy. In Croatia, as well as in the most transition countries, there are huge problems related to district heating.Almost all companies dealing with district heating and central supply of thermal energy have had a loss in the amount of over 200 million in last six years. On the other hand, consumers are dissatisfied with the price of the service. Because of that, most of themhave disconnected from the central production system and switched to use combi boilers that caused significant investment costs. The aim of this study is to investigate the causes that have led to difficulties in the business of energy operators and to point out the deficiencies of the existing district heating systems. Also, we wantedtomake an overview of new measures needed to be done in order to give encouragement to the development of district heating systems as a competitive, safe and efficient system.
