Green Heat Network Fund: BEIS allocates £27m tranche of funding to help get homes off gas boilers

The initial allocation was announced by the Department for Business, Energy and Industrial Strategy (BEIS) today (20 December), nine months after the fund was first created. The aim of the fund is to help scale Britain’s stock of heat networks, which supply heat to buildings from a central source, avoiding the need for buildings to have individual gas boilers.

BEIS is aiming for heat networks to expand to serve 18%-20% of UK households by 2050, up from around 2% in 2020, as part of its plans to bring heat and buildings to net-zero emissions. Heat networks will also serve commercial and public sector buildings.

Some heat networks are served by non-renewable energy options, such as gas. The Green Heat Network Fund is designed to support lower-carbon alternatives such as geothermal energy, heat pumps and solar, to scale. It is also, in these early stages, supporting networks served by energy-from-waste plants.

Of the funding confirmed today, around £14.4m will be allocated to Peterborough Integrated Renewables Infrastructure, which is a collaboration between Peterborough City Council, SSE Enterprise, Sweco, Smarter Grid Solutions, element energy and Cranfield University. Together, these organisations are seeking to develop a heat network served by Peterborough’s existing energy-from-waste plant. The plant processes household waste that cannot be recycled.

A further £12.9m has been allocated to Hull City Council’s district heat network project. The Council is aiming to begin works on developing the heat network, which will also be served by an energy-from-waste plant, in 2024. It is currently seeking project partners and planning public engagement events with local residents and businesses.

Also today, BEIS has allocated £2.65m to Wigan Council from the Green Heat Network Fund’s predecessor, the Heat Networks Investment Project. The council will use the funding to support the development of a new ground-source heat pump system to serve redeveloped buildings in the town centre, near the Galleries Shopping Centre. This project should be completed within the next three years.

BEIS has worked with Triple Point Heat Networks Investment Management as a delivery partner for both the Green Heat Network Fund and the Heat Networks Investment Project.

“It’s vital that we invest in cutting-edge technologies, like heat networks, that move us away from heating our homes and businesses with carbon-emitting fossil fuels,” said Energy Minister Lord Callanan. “I’m delighted to see that, through the Green Heat Network Fund, ground-breaking projects will be developed at pace to the benefit of communities, moving us away from soaring energy bills and delivering cheaper, greener energy.”

Improving customer protections

It bears noting that the Government has been pressed, this year, to confirm that customers served by heat networks would be able to access the energy price guarantee and Energy Bills Support scheme, giving them the same Government support for rising energy prices as homes with gas boilers. The confirmation finally came in October.

The Government is also in the process of extending regulator Ofgem’s remit to include heat networks, through the Energy Security Bill. The Bill is currently passing through the House of Lords. It was introduced in July by then-BEIS Secretary Kwasi Kwarteng, but its passage was delayed amid two subsequent changes in Prime Minister.

The Climate Change Committee’s (CCC) 2022 progress report to Parliament on net-zero highlighted building energy use as an area which has not been decarbonising at the scale and pace needed for the UK to meet legally binding climate targets. It is calling for more joined-up efforts to improve energy efficiency, provide more support for those facing fuel poverty and support the roll-out of heat pumps and heat networks.