Danish municipal heat planning empowers municipalities to implement locally appropriate energy solutions that are the best fit for the locality as a whole and the individual consumers served. Supportive policies and actions at the national and local levels have encouraged heat planning that confers significant autonomy to local governments. By examining how power is distributed and shared by different levels of governments in the planning process, this paper investigates how comprehensive energy planning in Denmark has supported the development of highly cost-effective district heating systems. Lessons from the Danish approach to heat planning are considered for their relevance to the United States, where significant technical district heating potential exists, yet remains well outside the typical energy policy discussions. While the specific Danish political context may not be transferable to other locations, the practical aspects of power sharing, socio-economic cost–benefit analyses, and communal decision-making may inform approaches to local heat planning around the world.