In this study, the optimum insulation thickness of pipes used in district heating pipeline networks, energy savings over a lifetime of 10 years, and payback periods are calculated for the five different pipe sizes and four different fuel types in the city of Afyonkarahisar/Turkey. For this reason, an optimization model is performed depending on Life Cycle Cost (LCC) analysis via P-1-P-2 method. Rock wool as insulation material and a system of pipelines (50-200 mm nominal sizes) with flow of hot water are considered. The results show that optimum insulation thicknesses vary between 0.085 and 0.228 m, energy savings vary between 10.041 $/m and 175.171 $/m, and payback periods vary between 0.442 and 0.808 years depending on the nominal pipe sizes and the fuel types. The highest value of energy savings is reached in 250 mm nominal pipe size for fuel-oil fuel type, while the lowest value is obtained in 50 mm for geothermal energy. Considering the economical and environmental advantages, the geothermal energy is a better choice and then natural gas. Crown Copyright (C) 2011 Published by Elsevier Ltd. All rights reserved.