Policy

Increasing the use of low-carbon technologies

Supporting detail:

Heat networks

Heat networks, often referred to as district heating schemes, supply heat from a central source directly to homes and businesses through a network of pipes carrying hot water. This means that individual homes and business do not need to generate their own heat on site.

Find out more about how heat networks operate on the Combined Heat and Power Association website and the UK District Energy Association website.

Heat networks are firmly established in other countries but currently provide less than 2% of the UK’s heat demand. In April 2009 the Department of Energy & Climate Change commissioned an assessment of the technical potential and costs of district heating in the UK. This showed that in the right conditions heat networks could:

  • supply up to 14% of the UK’s heat demand
  • be a cost-effective and viable alternative to individual renewable technologies while reducing the cost of energy for consumers

We have also published a heat map for England, which will assist local authorities in planning. It shows that nearly 50% of heat demand in England is concentrated with enough density to make heat networks worth investigating.

In 2012 DECC commissioned Databuild to compile a database of heat networks in the UK. Summary evidence on district heating networks in the UK from this database have been published.

On 26 March 2013 the Department set out the next steps to ensure affordable, secure, low carbon heating plays an important role in the nation’s energy mix in the publication: “The Future of Heating: Meeting the challenge”.

The actions identified for heat networks were:

  • Support local authorities in developing heat networks by establishing a Heat Networks Delivery Unit (HNDU) within the Department that will work closely with individual authorities’ project teams in England and Wales.

  • Provide funding over two financial years to contribute to local authorities’ costs in carrying out early stage heat network development. This will enable local authorities to bring forward projects to the stage where they are suitable for investment including loan finance from the Green Investment Bank or commercial lenders.

  • Work over the remainder of this year with the Low Carbon Innovation Coordination Group (which includes the Carbon Trust, BIS, the Energy Technology Institute, the Technology Strategy Board and the Scottish Government) to identify the key technological solutions that require innovation support to deliver the Government’s ambitions for heat network development out to 2020.

  • Explore the scope for extra financial incentives for renewable heat networks within the Renewable Heat Incentive (RHI) in 2014 and also access to a number of streams of capital funding provided by government.

  • Seek to endorse an industry-led consumer protection scheme for heat network users later this year, and encourage the heat networks industry to work with consumer groups in developing this practice.

  • Consult this year on options for requiring heat meters to be installed in heat network developments.

These actions build on the support we have already provided cities to develop heat network plans.

We are helping fund work in Nottingham, Newcastle, Manchester, Sheffield and Birmingham to determine the cities’ potential for heat networks. If the studies confirm the potential and the economics, the Green Investment Bank might be able to invest in development of heat networks in these cities.

Heat Network Funding for Local Authorities

An application and guidance pack for Local Authorities to gain financial assistance from the Heat Networks Delivery Unit Funding Stream is available on the Heat networks funding stream application and guidance pack page along with information on the dates of bidding rounds.

Alternatively you can email the Heat Networks Delivery Unit for more information or to request an application pack.

The National Heat Map tool is also available to provide heat demand information to planners and Local Authorities.

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