The Department for Energy and Climate Change (Decc) said in a report that UK heat infrastructure is a “significant and growing investment opportunity” for heat network operators and third party financers.
There are currently 280 projects in the pipeline, but Decc says “additional opportunities” have been identified by local authorities at energy masterplanning stage and a number of projects are also being developed by wider public bodies and the private sector.
Through the report the government hopes to “start a conversation” about how the market might evolve to “deliver the step change in deployment levels” suggested by the size of the current pipeline.
Decc said the investment opportunities within heat infrastructure “are likely to continue apace” and it is similarly likely the projects being developed will meet the required technical standards and customer protections to be able to move forwards.
The government also said that as the pipeline grows and deployment rate increases, there is an opportunity for current market participants to expand operations and for new parties to enter the market through partnerships and joint ventures.
Decc said: “This growth may bring about an evolution of the UK’s heat network market over the next 10 years: – with economies of scale realised, cost-reducing innovation deployed and new commercial structures, possibly centred around aggregation or unbundling of generation and distribution, emerging.”