UK financing for greener heat network projects

Energy efficiency

United KingdomLow-carbon energy is now at the core of the newest round of financing for heat network projects across England, making homes and businesses greener.

The government’s new £270 million Green Heat Network Fund, announced on September 07, will only support low-carbon technologies such as heat pumps, solar, and geothermal energy in the rollout of the next generation of heat networks, allowing more towns and cities to adopt this tried and tested technology beginning in 2022.

Heat networks provide heat to buildings from a common source, eliminating the need for separate, energy-intensive heating systems such as gas boilers in homes and businesses. Currently, over 14,000 heat networks in the UK provide heating and hot water to about 480,000 customers.

Heat networks have the potential to be a low-cost approach to reduce carbon emissions from heating. They are the sole means to use larger-scale renewable and recovered heat sources, such as heat from huge rivers and urban recovered heat from the London Underground.

Green Heat Network Fund plan

Since 2018, the previous Heat Networks Investment Project (HNIP) has awarded over £165 million in funding for schemes across England and Wales. The new Green Heat Network Fund (GHNF) replacement plan will go even farther, with proposals only supported provided they integrate low-carbon heat-generating technology including heat pumps, waste heat, and geothermal energy.

The successor plan is expected to play an important part in launching market demand for heat pumps, lowering consumer costs and delivering a mix of low-carbon heating alternatives as we encourage people to progressively shift away from fossil fuel boilers over the next 15 years.

With heat in buildings accounting for 21% of total UK carbon emissions, there is an urgent need to deploy a mix of new, low-carbon heating solutions to reach our legally binding aim of reducing the UK’s contribution to climate change by 2050.

Although heat networks presently fulfill just 2% of total UK heating demand, the independent Committee on Climate Change (CCC) estimates that with continuous support, they might deliver 18% by 2050, which is why the government is supporting investment through the Green Heat Network Fund.

The Heat Networks Investment Project aimed to accelerate the expansion of the heat network sector by allowing fossil fuel sources of heat as long as they offer carbon reductions and are gradually replaced by low-carbon alternatives.

Significant carbon savings by 2050

The Green Heat Network Fund is expected to fund the delivery of 10.3Mt of total carbon savings by 2050, which is the equivalent of taking 4.5 million cars off the road in England for a year.

An study of the possibility for future heat networks to be sited across England, Scotland, Wales, and Northern Ireland was also published. The study identifies opportunity regions that could be best-positioned to support future heat network initiatives, as well as how much heat they could supply.

It identifies sites for district heating in each of the UK’s four nations independently by combining heat demand statistics and prospective waste heat sources to identify where heat networks could be commercially viable.