This paper presents comparative analysis of two different heat sources for the existing district heating system in Sarajevo. Analyzed alternatives include: (i) cogeneration in the Kakanj thermal power plant combined with the construction of a hot water pipeline, and (ii) the integration of water-to-water heat pumps. The paper analyzes the required primary energy and the cost of heat energy at the entry point to the district heating system starting from the base load of 300 MWth. The results showed that the primary energy consumption is lower in the case of heat pumps compared to the case of Kakanj thermal power plant. Further, the cost of heat at the entry point to the district heating system is also lower for heat pumps. This research gives insights into the technical and economic aspects of the analyzed technologies and underlines the role of heat pumps as a promising alternative for district heating systems in the decarbonization process.