In many regions within Austria and throughout Europe district heating is essential in providing heat for households and businesses. The further expansion of district heating is thought to be a key technology for increasing the share of renewable energy in the heating energy mix and by production of combined heat and power decrease the input of primary energy in general. This work aims at identifying and understanding factors influential to the optimal expansion of a district heating network from a microeconomic perspective.Therefore, a model had to be developed which, including the cost incurred by heat generation and taking the spatial distribution of district heating demand into account, yields the optimum network expansion or reduction. In order to facilitate this, a spatial-model was created, which combines two mixed-integer linear programs. Generation units are represented by a convex approximation of their region of production. In an optimum scheduling problem production costs are calculated and used as input for the networkflow problem. In the network-flow problem the optimum network within the street network of a model region is calculated. The model is applied to the cities of Salzburg and Klagenfurt and evaluated with respect to the influence of scenarios affecting natural gas price, electricity spot market prices and a reduction in district heating demand. Both model regions show, although not accounting for investment costs for new generation units, potential for further expansion. In case a reduction in demand occurs a network expansion can compensate for some of the reduction. The optimum network length shows, due to the high share of gas powered production units, a high dependency on the gas price. A rise in electricity spot market prices, while resulting in more combined heat and electricity generation, proves to not be as influential in the total cost of heat generation.