The scheme of a BMDH system is simple. A big furnace fueled with biomass heats water that passes through a pipe grid and supplies energy to heat individual houses in a village. Austrian villages with BMDH plants usually have between 500 and 4000 inhabitants and are of predominantly rural character. Accordingly, the size of BMDH plants varies between a few hundred kW and 8 MW, with corresponding grids between 100 m and 20 km. About two-thirds of all plants have a power of less than 1500kW. Plants larger than 800 kW typically supply whole villages, while smaller plants may heat only a few larger buildings in the village center. Most plants were built in Lower Austria, Upper Austria, Salzburg and Styria. Presently, there is an obvious saturation of the market of village heating systems and a sharp increase in what is called microgrids.

During the first phase of the technology introduction and until 1984, private companies were the predominant developers and operators of BMDH plants, mostly sawmills. They were followed by municipalities and farmers’ cooperatives, which are now operating a great majority of plants. Utilities became more interested in BMDH in the 1990s but were rather cautious in setting up projects. In some cases, interesting forms of joint ventures with farmers’ cooperatives were established. The utilities took the role of developers taking advantage of their, professional, technical and management know-how, while farmers took the role of operating the plant and arranging for fuel supply. It is important to mention that the general dominance of farmers as developers and operators is related to the enhanced availability of subsidies for this group.