To answer the challenges presented by climate change, all aspects of our energy systems have to carry out a rapid transition towards decarbonisation. This is especially true for the European heating sector that still relies heavily on fossil fuels. District heating systems have been traditionally praised for their efficiency, but replacing old fossil fuel based combined heat and power (CHP) plants is an ongoing challenge, and also the sustainability of biomass as a large-scale option can be considered questionable. Small modular nuclear reactors are one of the potential sources of future CO2-free district heat production. We evaluate the suitability and cost-effectiveness of these plants for district heating through literature review and scenario modelling. The technical aspects of small modular reactors seem promising but there is still a significant amount of uncertainty around both their costs and deployability. The scenario modelling assesses the investment in 300 MWdh of new district heating capacity in the Helsinki Metropolitan area in 2030 either as a CHP plant or as a heat-only boiler. The results indicate that a modular nuclear heat-only boiler could be profitable, while profitable investment in a modular nuclear CHP plant relies heavily on future electricity market price levels.