The government has reiterated plans for a £270 million capital grant programme first announced in March 2020, which aims to stimulate the growth of low-carbon heat networks. The fund will open to public, private and third sector applicants in England, in April 2022 and is anticipated to run to 2025.
Unlike the previous Heat Networks Investment Project (HNIP), which has provided more than £165 million of funding for schemes across England and Wales since 2018, the new Green Heat Network Fund will only support low-carbon technologies. That includes heat pumps, solar and geothermal energy.
The successor scheme is set to play a significant role in kick-starting market demand for heat pumps, which will drive down costs for consumers and delivering a mix of low-carbon heating solutions as we incentivise people to gradually transition away from fossil fuel boilers over the next 15 years.
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.”
Although heat networks currently meet approximately 2% of the overall UK demand for heating, the independent Committee on Climate Change (CCC) has estimated that, with continued support, they could provide 18% by 2050. The Heat Networks Investment Project had focused on accelerating the growth of the heat network market and has permitted fossil fuel sources of heat provided they offer carbon reductions and will be replaced by low-carbon alternatives over time.
BEIS has also published an assessment of the potential for future heat networks to be sited across England, Scotland, Wales and Northern Ireland. The study identifies opportunity areas that could be best-placed to support future heat network projects and how much heat could be supplied by them.
It 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.