Heat networks form an important part of the government’s plan to reduce carbon and cut heating bills for customers.
What are heat networks?
A heat network – sometimes called district heating – is a distribution system of insulated pipes that takes heat from a central source and delivers it to a number of domestic or non-domestic buildings. The heat source might be a facility that provides a dedicated supply to the heat network, such as a combined heat and power plant; or heat recovered from industry and urban infrastructure, canals and rivers, or energy from waste plants.
Heat networks form an important part of our plan to reduce carbon and cut heating bills for customers (domestic and commercial). They are one of the most cost-effective ways of reducing carbon emissions from heating, and their efficiency and carbon-saving potential increases as they grow and connect to each other. They provide a unique opportunity to exploit larger scale – and often lower cost – renewable and recovered heat sources that otherwise cannot be used. It is estimated by the CCC that around 18% of UK heat will need to come from heat networks by 2050 if the UK is to meet its carbon targets cost effectively.
The Heat Networks Delivery Unit (HNDU)
The Heat Networks Delivery Unit was established in 2013 to address the capacity and capability challenges which local authorities identified as barriers to heat network deployment in the UK. The Unit provides funding and specialist guidance to local authorities who are developing heat network projects.
Heat Networks Investment Project (HNIP)
The Heat Networks Investment Project is delivering £320m of capital investment support to increase the volume of heat networks built, deliver carbon savings for carbon budgets, and help create the conditions for a sustainable market that can operate without direct government subsidy. The pilot phase of the Heat Networks Investment Project ran for six months and awarded £24m to nine successful Local Authority projects in March 2017.
Investing in heat networks
UK heat networks represent a significant investment opportunity across distribution, generation, storage, controls and customer interface.
A key challenge that has been identified to us by a number of Local Authorities is uncertainty over which third party investors are actively considering investment in the heat network sector. To help enable projects to contact investors we are publishing the list of investors that have contacted us and provided a 1-2 page summary of how they intend to invest in the sector. The pro-forma that has been completed by each investor is provided below.
If you are interested in investing in the sector then please contact the Heat Network Delivery Unit, HNDU@beis.gov.uk, with a completed 1-2 page investor summary pro-forma provided below. We will update the list each quarter in line with the timing of the HNDU quarterly pipeline.
If you would like to receive a copy of the consolidated 1-2 page investor summary please contact HNDU@beis.gov.uk clearly stating your name, the organisation you represent and the specific heat network opportunity that you are interested in exploring financing options for. This can be made available to private and public sector heat network opportunities.
Various guides have been published for potential investors:
Tools and toolkits
The National Heat Map provides accessible high-resolution web-based maps of heat demand by area:
The Community Heat Network Toolkit provides guidance on community-led heat network projects:
Regulation and consumer protection
The Heat Network (Metering and Billing) regulations 2014 implement the requirements in the Energy Efficiency Directive with respect to the supply of distributed heat, cooling and hot water: