Referral of the proposed modified Green Heat Network Fund subsidy scheme by the Department for Energy Security and Net Zero
The Subsidy Advice Unit (SAU) has accepted a request for a report providing advice to the Department for Energy Security and Net Zero (DESNZ) concerning its proposed modified Green Heat Network Fund subsidy scheme.
Administrative timetable
| Date | Action |
|---|---|
| 10 April 2026 | SAU’s report to be published |
| 11 March 2026 | Deadline for receipt of any third-party submissions |
| 25 February 2026 | Beginning of reporting period |
Request from DESNZ
25 February 2026: The SAU has accepted a request for a report from DESNZ concerning the proposed modified Green Heat Network Fund subsidy scheme. This request relates to a Subsidy Scheme of Particular Interest.
The SAU will prepare a report, which will provide an evaluation of DESNZ’s assessment of whether the subsidy scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.
Information about the scheme provided by DESNZ
The Green Heat Network Fund (GHNF) is a capital grant fund that supports the commercialisation and construction of new low-carbon heat networks (including the supply of cooling) and the retrofitting and expansion of existing heat networks. It aims to develop and grow the heat network market and to address some of the challenges of decarbonising the UK’s heat sector. The scheme opened for applications in March 2022 and is now in its 11th funding round.
Owing to an increase in the GHNF budget of over 25%, the scheme requires referral to the SAU in accordance with the Subsidy Control Act.
The GHNF provides capital grant funding to organisations in the public, private and third sectors in England. Individuals, households and sole traders cannot apply.
GHNF funding can be drawn down up until the 2029 to 2030 financial year. Applicants may apply for a maximum allowable grant of up to, but not including, 50% of the estimated eligible commercialisation and construction costs of the project. The GHNF awards no more than 4.5p of grant per 1kWh of heat delivered to customers over the first 15 years of operation.
The scheme’s core eligibility requirements are a set of gated metrics set out in the published guidance. Any project that fails to meet these metrics would be ineligible for funding. Any project that does meet the scheme’s core eligibility requirements must also perform well in a deliverability assessment, evidence the strategic importance and potential for expansion and be able to access sufficient non-GHNF funds.
Applications are assessed by the delivery partner’s team of experts, who make recommendations to an Investment Committee. Awards made by the GHNF are discretionary. There is no automatic entitlement to an award of funding in any amount.
Information for third parties
If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning the proposed modified Green Heat Network Fund subsidy scheme, please send your comments on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, see the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit
Please send your submissions to us at sau-desnzgreenheatnetworkfund2026@cma.gov.uk, copying the public authority: ghnfcorrespondence@energysecurity.gov.uk.
Please also provide a contact address and explain in what capacity you are making the submission (for example, as an individual or a representative of a business or organisation).
Notes to third parties wishing to make a submission
The SAU will only take your submission into account if it can be shared with DESNZ. The SAU will send a copy of your submission to DESNZ together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the subsidy scheme or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with DESNZ using the email address provided above.
The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.
For further details on confidentiality of third party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.
Contacts
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SAU project team: sau-desnzgreenheatnetworkfund2026@cma.gov.uk
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CMA press team: 020 3738 6460 or press@cma.gov.uk