Network temperatures in district heating systems are important operational factors for obtaining efficient performance. A low network return temperature allows for the recovery of low-grade heat from assets such as condensing boilers, waste incineration, geothermal sources and industrial waste heat. Fluctuations in heating and cooling demands affect the return temperatures of the building substations and in the network. This variability impacts the economic viability and environmental sustainability of the entire system. This paper presents a nonlinear optimization strategy to maintain sufficient energy flows in the network's primary and secondary circuits to achieve low return temperatures from all substations in the network. The defined optimization strategy incorporates the thermodynamic model of the substation and building heating system as opposed to traditional weather-based supply temperature adjustments. The estimated heat demands and tariffs, CO2 penalties are inputs used by the optimizer to find theoptimal solution. The total operational expenditure for electricity and gas consumption shows an 18% reduction with 8% reduction in emissions and 6% efficiency improvement when compared with the measured weather-based approach. The developed strategy will aid the network operators in the economic dispatch of heat generation while ensuring the user's thermal comfort.