Press release

£6 million funding for local authority heat networks

£6 million grant funding programme launched to help Local Authorities (LAs) in England and Wales develop new heating and cooling networks.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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A new £6 million grant funding programme has been launched to help Local Authorities (LAs) in England and Wales to develop new heating and cooling networks, and expand existing networks.

To win a share of the funding, local authorities must bring forward ambitious and innovative proposals to develop and deliver heat networks that - as much as possible - draw their heat energy from renewable, sustainable or recoverable sources.

This could include any system in which heat is generated off-site by renewable or recovered sources such as waste heat from industry, energy from waste plants and biomass combined heat and power. Many university campuses, new mixed commercial and residential developments and high rise flats draw their heat from these systems.

Energy and Climate Change Minister Greg Barker said:

“Increasing the use of low carbon heating in our buildings is helping to reduce our dependency on costly, imported oil and gas.

“Thanks to the Coalition Government’s support, many UK buildings have already made the switch from traditional fuels to low carbon heat sources. This new grant funding programme builds on these successes by helping Local Authorities develop more commercially viable low carbon heat networks.”

The bidding process to apply for grant funding starts today (20 September 2013) and will continue for 18 months through a series of six bidding rounds. Bids will be assessed against transparent and robust criteria. These include the potential for commercial development, contribution towards low carbon and energy reduction objectives, compatibility with wider low carbon and growth agendas (where applicable) and a demonstrable commitment to robust project management and governance.

Where applications are submitted that are considered to be realistic commercial propositions, but fall short of the threshold for funding, DECC will offer advice to local authorities on how to improve their applications within that or subsequent rounds.

Recent successful heat network projects include the Olympic Park District Heating and District Cooling Network. This comprises 18 km of distribution pipes that provided the London 2012 Olympic and Paralympic Games with efficient heating and cooling using gas and biomass boilers. This amounts to 100 MW of heating and cooling capacity, could expand to 200 MW in the future and is projected to save 11,000 tonnes of CO2 each year by 2015.

Notes for editors

  1. Details on how to apply for the competition can be found on the Heat Network page of GOV.UK
  2. The fund will be managed by the Heat Networks Delivery Unit (HNDU) within the Department of Energy and Climate Change. The HNDU has been established to help LAs in England and Wales to achieve urban decarbonisation, local growth, improved energy efficiency and reduced fuel poverty through increased use of heat networks.
  3. The primary purpose of the grant funding is to help develop business plans that are sufficiently robust to attract a range of finance options, including commercial investment. HNDU will favour those projects looking at more innovative heat sources, which will complement more traditional sources like gas combined heat and power.
  4. The fund will meet 67% of the estimated eligible costs of specialist consultants used to develop technical proposals and financial evaluations and applicants will need to contribute the remaining 33%.
Published 20 September 2013