Increased recovery of excess heat from thermal power generation and industrial processes has great potential to reduce primary energy demands in EU27. In this study, current excess heat utilisation levels by means of district heat distribution are assessed and expressed by concepts such as recovery efficiency, heat recovery rate, and heat utilisation rate. For two chosen excess heat activities, current average EU27 heat recovery levels are compared to currently best Member State practices, whereby future potentials of European excess heat recovery and utilisation are estimated. The principle of sequential energy supply is elaborated to capture the conceptual idea of excess heat recovery in district heating systems as a structural and organisational energy efficiency measure. The general conditions discussed concerning expansion of heat recovery into district heating systems include infrastructure investments in district heating networks, collaboration agreements, maintained value chains, policy support, world market energy prices, allocation of synergy benefits, and local initiatives. The main conclusion from this study is that a future fourfold increase of current EU27 excess heat utilisation by means of district heat distribution to residential and service sectors is conceived as plausible if applying best Member State practice. This estimation is higher than the threefold increase with respect to direct feasible distribution costs estimated by the same authors in a previous study. Hence, no direct barriers appear with respect to available heat sources or feasible distribution costs for expansion of district heating within EU27. (C) 2012 Elsevier Ltd. All rights reserved.