The next stage of funding to develop heat networks across England will only support those powered by low-carbon technologies, the government has confirmed.
The Department for Business, Energy & Industrial Strategy (BEIS) is today (7 September) releasing details of the successor fund to the Heat Networks Investment Project, which has been running since 2018.
Its £270 million replacement, which will open for open for applications in April 2022 and is anticipated to run to 2025, was first announced in the March 2020 Budget.
The government’s response to a consultation that was carried out late last year and finished in January confirms that the Green Heat Network Fund “will only support low-carbon technologies”, specifically mentioning heat pumps, solar, waste heat and geothermal energy as examples.
At present, there are over 14,000 heat networks in the UK, providing heating and hot water to around 480,000 consumers.
In a bid to accelerate the growth of the heat network market, the previous fund permitted fossil fuel sources of heat provided they offered carbon reductions and would be replaced by low-carbon alternatives over time.
However, BEIS described the successor scheme as seeking to “incentivise new and existing heat networks in England to move away from high-carbon sources, as well as exploiting waste-heat opportunities while bringing down costs for consumers”.
Energy Minister Lord Callanan said: “Finding a mix of innovative solutions to how we heat our homes in the most affordable way is going to be vital as we support people to gradually transition away from gas boilers over the next 15 years.
“Today’s announcement shows we are going even further in our goals to expand this tried and tested heat networks technology, making even more use of the likes of recovered heat from the London Underground to heat our homes.
“The Green Heat Network Fund will also allow us to drive forward the new, cost-effective and low-carbon technologies we need to kick-start new industries and support new jobs in the low-carbon technology sector as we build back greener from the pandemic.”
Heat networks currently meet approximately 2 per cent of the overall UK demand for heating but the independent Committee on Climate Change (CCC) has estimated that, with continued support, they could provide 18 per cent by 2050.
BEIS is also today publishing an assessment of the potential for future heat networks to be sited across England, Scotland, Wales and Northern Ireland.
The study identifies areas for district heating in each of the four nations separately across the UK by combining heat demand data and potential sources of waste heat to determine where heat networks could be commercially viable.