Government announce £320m fund for heat networks

The government has announced a new scheme for consumers and non-domestic users such as hospitals, schools and council buildings to participate in a heat networks scheme.

The Heat Networks Investment Project is a government-backed fund that will invest £320m of capital funding in heat network projects through grants and loans.

Heat networks work by converting hot water from steam at a waste incinerator before distributing it to homes along a network of district heating pipes.

Sheffield and Nottingham have already seen the introduction of district heating networks, which see hot water circulating in a closed loop to homes, resulting in zero waste.

Last month the Leeds Pipes network was announced, which will heat around 2000 council homes across 31 tower blocks, with 24 of them being converted from electric heating systems to the new ‘wet heating’ method.

Currently, 60% of homes in Denmark are heated through district networks, compared to just 2% in the UK and it is estimated that the heat network connection could result in 10% and 25% cheaper energy bills.

In Leeds, old gas boilers will be scrapped and storage and immersion heaters will be replaced with units that the council says will give householders much more ability to control the energy they consume.

The government hope that heat networks could play a vital role in the long-term decarbonisation of heating, as they ‘provide a unique opportunity to exploit larger scale renewable and recoverable heat sources.’

They believe heat networks could meet up to 17% of heat demand in homes and up to 24% of heat demand in industrial and public sector buildings by 2050.

Energy Minister Claire Perry said: ‘The UK has led in the decarbonisation of electricity, and today’s announcement shows we are just as committed to tackling heat.

Today’s announcement creates a route to market for innovative energy projects across the country and demonstrates a key objective of the Clean Growth Strategy; to help deliver technologies that can lower bills, cut carbon and improve the quality of life for communities across the country.’

Guidelines for the plan can be read here