The government is calling for “ambitious and innovative proposals” to draw heat from renewable, sustainable or recoverable sources.
That could include tapping waste heat from industry or waste incinerators and biomass combined heat and power.
Barker said: “Increasing the use of low carbon heating in our buildings is helping to reduce our dependency on costly imported oil and gas.
“Thanks to the coalition government’s support, many UK buildings have already made the switch from traditional fuels to low carbon heat sources. This new grant funding programme builds on these successes by helping Local Authorities develop more commercially viable low carbon heat networks.”
There will be six bidding rounds, expected to take 18 months. Schemes will be assessed on the potential for commercial development, contribution towards low carbon and growth objectives and robustness of project management.