The aim of the task is to modernise district heating sections with low energy transmission efficiency (high heat loss). The project is a continuation of the project BC. “Reconstruction of the heat distribution system in Olsztyn through the use of energy-saving solutions”, implemented in the years 2007-2015 under Measure 9.2 Efficient Distribution of Energy of POIiŚ. The tasks planned to be carried out by the company between 2017 and 2020 were divided into two stages due to the very large scope and financial scope. These are stages independent of each other in terms of both financial and technical and organisational feasibility. The first stage is on the basic list of ITIs and in the third quarter of 2016 an application was submitted for co-financing its implementation under the non-competitive procedure of Measure 1.5 of the OPI. This project is the second stage of the project. When analysing the investment needs of the Municipal Enterprise Energetyki Cieplna Spółka z o.o. in Olsztyn, account was taken of both deficiencies resulting from the technical condition of the heat distribution system, investment needs in relation to the planned demand for the company’s services, as well as investment needs related to ordering, rationalising and minimising the negative environmental impact on the functioning of the existing system. The scope of the planned investment phases was mainly influenced by the two factors mentioned above: the technical status of the district heating network and the minimisation of environmental impacts. Both of these factors are closely linked, as the efficiency of the heat distribution system directly affects the amount of energy losses arising from the heat distribution process in the urban distribution system Olsztyn, and consequently on the consumption of coal fuel used in the two existing sources supplying the district heating network.