The Green Heat Network Fund: the future of heating is sustainable

How will the Green Heat Network Fund affect you?

By Sophie Wyatt

07 February 2021

The UK government has announced that it will launch the new Green Heat Network Fund in April 2022. The grant scheme, launched by the Department for Business, Energy and Industrial Strategy, will help to lower the country’s carbon emissions by supporting the commercialisation of low carbon heat networks. The district heating infrastructure will make us of green heat sources such as heat pumps, geothermal energy and waste heat.

Sustainability is now a global priority. In the UK, net zero is now enshrined in legislation and the country aims to meet this target by 2050. With this in mind, the £270 Green Heat Network Fund has the potential to significantly accelerate the UK towards its net zero goals.

So, how will the funding scheme work, and what benefits will it bring to the UK?

How will it work?

While previous schemes – such as the Heat Network Investment Project (HNIP) – have made good progress in terms of reducing wasted heat and carbon emissions, this new scheme is set to push boundaries even further. The new fund will incentivise new and existing heat networks in England to move away from carbon emitting sources, as well as exploiting waste-heat opportunities while bringing down costs for consumers.

By injecting funding into commercialisation of green heat network projects, BEIS intends to grow the heat network market and decarbonise the UK’s heat sector.

To be eligible for funding, projects will have to meet minimum criteria including feasibility studies, a minimum level of thermal energy, a social internal rate of return of 3.5% and minimum end customer demand. Applicants will score higher where they can demonstrate maximisation of carbon savings, heat production and value for money. Grants will only be available for commercialisation costs.

Ofgem has been appointed the regulator for heat networks, with the aim of ensuring that customers receive a fair price and a reliable supply of heat.

What are the benefits?

The Green Heat Network Fund is expected to help accelerate the UK towards its net zero targets, through reducing carbon emissions and wasted heat.

In the UK, around 40% of our energy consumption and 20% of greenhouse gas emissions are due to the heating and hot water supply for buildings. Individual heating boilers usually burn gas, producing carbon emissions. It is likely that there will be a gas boiler ban for new homes in the UK from 2025, so an alternative, renewable source of heating is urgently needed. The Committee on Climate Change estimates that around 18% of the UK’s heat supply needs to come from heat networks for the country to meet its net zero targets by 2050.

Currently there are over 14,000 heat networks in the UK which provide heating and hot water to an estimated 480,000 consumers. The fund is expected to finance the delivery of an estimated 10.3Mt of total carbon savings by 2050. This is the equivalent of removing 4.5 million cars from the UK roads for a whole year.

District heating networks are a particularly attractive option in densely populated urban areas, where the pipelines can serve multiple sites. An example is the Bunhill district heating network in Islington, London. The heating network makes use of unwanted heat from the London Underground to provide cheaper, greener heat to 1,350 homes and community buildings in the area.

How can Welcome help?

Becoming efficient brings numerous benefits for both businesses and the environment. Reducing waste, cutting emissions and becoming environmentally friendly are just some of the ways businesses can enhance their efficiency.

At Welcome, we offer advice and guidance on a range of energy saving solutions, improving energy efficiency and offering comprehensive billing services.

We have experience in metering and billing solutions for district heat networks, that is fully compliant with the Heat Network (metering and billing) Regulations 2014. Our team is on hand to ensure that you achieve maximum energy efficiency.

Get in touch today, and find out how we can help you to become more sustainable.