GOV.UK
Guidance
Heat Networks Delivery Unit
Support and guidance for local authorities developing heat networks.
Overview
Local authorities have a key role to play in making heat networks succeed. Their involvement, particularly in the development stages, can help realise the benefits of heat networks, while also delivering jobs and growth. In order to address the capacity and capability challenges which local authorities identified as barriers to heat network deployment in the UK, the government set up the Heat Networks Delivery Unit (HNDU) in 2013.
The Heat Networks Delivery Unit provides grant funding and guidance to local authorities in England and Wales for heat network project development.
Since its inception, the HNDU has run six funding rounds – awarding £14 million in total – and is currently running Round 7. Over 200 unique projects have so far been supported across 139 local authorities.
Scope
The Heat Networks Delivery Unit provides support to local authorities in England and Wales through the early stages of heat network development:
- heat mapping
- energy masterplanning
- techno-economic feasibility
- detailed project development
- early commercialisation.
See the table below for details about each stage.
HNDU support does not provide funding for late commercialisation costs and costs associated with the construction, operation and maintenance of a heat network. The Heat Networks Investment Project (HNIP) is a £320m capital investment programme providing support for the capital costs of heat networks.
The process
Local authorities apply for HNDU support through bidding rounds. All bids are reviewed by HNDU assessors before final recommendations are approved by a panel of financial, commercial and policy specialists.
Grant funding is provided to successful local authorities under Section 31 of the Local Government Act. Eligible costs are defined as externally commissioned consultancy costs for heat network development work. HNDU funding comprises no more than 67% of eligible costs.
If successful, each local authority is supported by a team of specialists within HNDU.
Round 7
Round 7 is open for applications.
Round 7 is an open funding round, running from January 2017 to December 2017 (subject to budget availability). For details on how to apply, please see HNDU Round 7: Overview:
For more information on this or previous funding rounds, please see relevant documents on this page below or email hndu@beis.gov.uk.
HNDU Pipeline
We are pleased to provide our new look HNDU project pipeline with accompanying spreadsheet summary. We will update and separately publish the pipeline each quarter. Currently the pipeline reflects a portion of the total projects that HNDU is currently working with. The projects selected are the ones we believe to be close to, or actively considering, finance solutions. We will expand this list over the coming year to reflect our full portfolio and subsequent editions will make clear which projects have progressed to different development stages – mapping and masterplanning, techno-economic feasibility, detailed project development and commercialisation.
The projects we have captured in the pipeline are of course live projects with assumptions being refined almost continuously as new information is made available. As such whilst every endeavour has been made to try to reflect as up-to-date information as possible, the information will invariably represent a single point in time (typically a consultant’s report – we have indicated the year of the information). We hope that the one page summaries will be used as intended:
- to shine a light on some of what is happening in district energy across England & Wales;
- better enable potential sources of finance to assess the scale of the sector;
- facilitate conversations; and
- ultimately enable new finance to enter the sector.
If you are an investor and have recommendations on what else could be provided to better enable your investment do please email these to hndu@beis.gov.uk FAO George Robinson.
Local authorities supported by the Heat Networks Delivery Unit in rounds 1-6:
Project development stages supported by HNDU
| Phase | Detail |
| Heat mapping | Area-wide exploration, identification and prioritisation of heat network project opportunities |
| Energy masterplanning | Area-wide exploration, identification and prioritisation of heat network project opportunities |
| Feasibility study | Project specific - An increasingly detailed investigation of the technical feasibility, design, financial modelling, business modelling, customer contractual arrangements and delivery approach, up to business case |
| Detailed project development | Project specific - An increasingly detailed investigation of the technical feasibility, design, financial modelling, business modelling, customer contractual arrangements and delivery approach, up to business case |
| Commercialisation | Reasonable legal costs such as in relation to developing customer commercial agreements, heat supply contracts, necessary land purchase, land access arrangements, etc.; further development of tariff structure for customer contracts; further development of financial model and business case and associated commercial advice costs where necessary |
Related publications and tools
Evaluation of the Heat Networks Delivery Unit