As low-carbon heat provision comes under the spotlight two new options for heat networks have been announced.
Gas distribution company SGN has joined with renewable energy provider Vital Energi to develop, own and operate low and zero-carbon heat networks.
The 50:50 joint venture will create an Energy Services Company (ESCO), which will deliver heat at strategically located sites, which are a combination of redundant sites owned by SGN and others which will be developed over time through Vital’s existing market presence.
The objective is to supply new and existing residential, industrial and commercial facilities and development activity is already underway for two projects in Scotland and the South East, with another 20 in the pipeline.
SGN said it is looking to develop alternative heat solutions alongside its core gas distribution business and expand into the growing district heating market, recognising the future of heat is likely to include a mix of technological solutions and energy sources. Vital Energi, meanwhile, said it is seeking to expand into asset ownership opportunities to complement its design, build and operations businesses.
SGN’s 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.”
Meanwhile, Cornish ground source heat pump infrastructure and asset company Kensa Utilities has claimed its ‘Heat the Streets’ scheme can be a ‘blueprint for decarbonising domestic heating’. The two-year scheme will deliver subsidised ground source heat pumps to 500 homes in Cornwall.
Kensa Utilities aims to fund, own and maintain ground arrays and make ground source heat pumps more accessible by divorcing the cost of the ground array from the upfront purchase.
Heat the Streets will use a shared ground loop array system architecture made up of a communal network of underground pipework that will extract renewable heat via clusters of boreholes. Although connected to the communal system, each home will receive its own ground source heat pump, giving control over the heating and hot water in their own home, with independent billing, and the flexibility to switch energy suppliers and contracts if they so wish.
Kensa Utilities will own the ground array and recover its investment via a long-term annual connection fee.
It said that by removing the expense of the ground array, it is mimicking long-standing ‘split ownership’ arrangements in the gas sector with the underground infrastructure owned and maintained separately from the heat pump installed inside the properties.
Simon Lomax, chief executive of the Kensa Group, said: “Our vision is to supply ground source heat pumps for the price of an air source heat pump, breaking down the barriers stalling the uptake of the technology at the scale required to meet the net-zero commitment. The far superior efficiency of ground source heat pumps, particularly on colder days, will be hugely beneficial to the electricity system so we see huge potential for this model as many entities want to follow our example and own the underground infrastructure.”
Lisa Treseder, senior project manager at Kensa Utilities, said: “The ‘Heat the Streets’ project will demonstrate how we can deliver net-zero now, for everyone, on our existing housing stock and without leaving out the privately-owned neighbours”.

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