This paper deals with the establishment of a grey-box model of plate heat exchangers. First, a second-order state space model of plate heat exchangers is developed. Then, the model is solved by the white-box method and grey-box method, respectively. In the white-box method, the linearization of the state space model is carried out by implicit difference scheme and the overall heat transfer coefficient was calculated with empirical correlation of the Nusselt number. In the grey-box method, a newly developed parameter identification method was established. The simulation results of two outlet temperatures by the grey-box and white-box method, respectively, are compared with the test data. It is shown that the grey-box method is more suitable and accurate for the simulations of outlet temperatures than the white-box method. Thus, it can provide practitioners and heating engineers with tools to design controllers for district heating systems.