Strategic management approaches for developing sustainable renewable heat supply in local communities: A case study

• Proposes a 7-step approach to sustainable energy sector planning. • Engages diverse stakeholders in sustainable energy planning. • Validates woodchip biomass and CHP solutions for heat supply. • Evaluates excess industrial heat for sustainable district heating. • Links local energy projects with national climate and development goals. The importance of local sustainable energy projects in the transition to a climate-neutral society is widely recognised, yet strategic planning at the local level often lacks structure and consistency. This paper presents an integrated methodology combining established strategic management tools—such as SWOT analysis, multi-criteria decision-making methods for prioritising factors and strategies, and strategic formulation matrices—to develop and implement sustainable development strategies in the energy sector. The seven-step process includes defining the national sustainable development framework, identifying strategic orientations, assessing local conditions, evaluating the relevance of key factors, formulating strategies, and determining performance indicators. The method was tested through the development of 36 strategies for a Slovenian municipality, with three top-ranked strategies implemented as pilot cases. For the proposed woodchip-based combined heat and power system, the economic analysis indicated a net present value of €144,134 and an internal rate of return of 7.2%, which exceeds the weighted average cost of capital of 5.0%. In the second case, the utilisation of excess heat from industrial processes in the district heating system suggested potential annual savings of over €2.4 million, with an estimated return on investment within five years, assuming partial public co-financing. These findings confirm the practical applicability of the proposed approach and its usefulness in supporting local authorities in the development of effective and economically viable strategies for the energy transition.