SGN has revealed plans to form a 50:50 joint venture with Vital Energi to build and operate low and zero-carbon heat networks around the UK.
The networks will supply new and existing residential, commercial and industrial sites, including redundant sites owned by SGN and developments planned by its property arm, SGN place.
The company said it is looking to diversify from its core gas distribution business and is partnering with heat network developer Vital Energi to expand into the growing market.
Development work is already underway for two projects in Scotland and the South East, with another 20 in the pipeline.
SGN director of commercial services and investments Marcus Hunt said: “Heat networks are likely to play an increasing role in the delivery of UK heat in the context of net zero.
“The creation of this joint venture with market-leading Vital Energi enables us to build a presence in this emerging market, delivering new heat infrastructure and supporting decarbonisation.”
Nick Gosling, chief strategy officer at Vital Energi, said: “We’re really excited to be extending our asset ownership portfolio and working alongside SGN on regeneration initiatives that will revolutionise the heat network market.
“Combining the resources, expertise and know-how of both organisations will allow us to play a major role in delivering the UK’s transition to low and zero-carbon heat.”