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The district heating and cooling sector, which accounts for more than half of total energy consumption in many industrialised countries, is experiencing new challenges with the current transformation of the energy systems. The required decarbonisation will result in a more complex energy system, as a few large plants which utilise fossil fuels will be replaced by many small production plants distributed around the system, that use renewable or waste energy sources. Many of these sources are volatile; their output is affected by weather and other factors. Furthermore, district heating and cooling systems must be operated more efficiently and flexibly to ensure a consistent and cost-effective thermal energy supply, as well as effective participation power system balancing market. Because of the necessary changes in the energy system, district heating becomes increasingly beneficial to both end users as well as other energy sectors, and the number of connections is increasing in many countries in conjunction with the phase-out of fossil fuels such as oil and gas for space heating and hot water supplies. In this changed environment, increased adoption of digital technology in the district heating and cooling sector provides a chance to make systems smarter, more flexible, efficient and reliable, hence accelerating the necessary integration of additional renewable and waste energy sources into supply systems. This change affects the entire district heating energy chain, from generation to end user usage, and supports the transformation of the overall energy system. The digitalisation of district heating systems represents a paradigm shift in the production, distribution, and consumption of heat. Sensor technology, IoT connectivity, and AI algorithms advancements provide prospects for higher energy efficiency, system stability, and increased integration of renewable energy sources. However, for successful deployment, issues such as data privacy and system