Climate Change and the provision of affordable, reliable energy have become an increasingly prevalent subject of discussion. Over the past decade, the European Union has made significant efforts to decarbonize its electricity sector, while the heating and cooling sector, responsible for half of Europe¿s final energy consumption, has received less attention. District heating and cooling systems exemplify best practice approaches for delivering locally available, cost effective, and low carbon thermal energy. Furthermore, they provide interesting possibilities for the substitution of climate damaging generation technologies through greener options in the heating and cooling sector on a large scale. In particular, the exploitation of the shallow geothermal potential presents interesting opportunities, prompting intensive research into how technologies such as heat pumps and auxiliary devices like thermal energy storages can be effectively integrated into these networks. One objective of this work is to provide an understanding of the district heating and cooling sector and identify measures that can be implemented for its sustainable development, with a focus on the exploitation of geothermal energy. Therefore, the thesis first examines the functionality and historical development of district heating and cooling systems, aiming to provide an understanding of the status quo and anticipate future trends. Building up on this knowledge, relevant technologies for their retrofitting, and how these technologies can be effectively integrated into such networks, are explained. The second objective, which is the main focus of this work, is to offer a framework for designing and optimizing geothermal generation facilities in district heating and cooling networks. In the design process, a hypothetical district heating and cooling network demand from Madrid, Spain was used as a representative example. Two Python based programs were written to enable a high degree of automation in the design and optimisation process, as well as to facilitate handling large amounts of data. In order to get insights into the thermodynamic behaviour of such a system, a generation facility, which exploits the shallow geothermal potential, was modelled in the simulation environment TRNSYS. With the generated data, a sensitivity analysis concerning the power plant¿s topology was conducted to examine the impact of varying topology parameters on the levelized cost of energy, specific CO2 emissions, as well as the heating and cooling coverage achievable. The results indicate the optimal sizes for heat and cold storage systems, as well as the optimal number of reversible heat pumps.