Heat Networks are an energy efficient and cost efficient way to decarbonize heat, especially in areas of concentrated demand i.e. densely populated and mixed use areas (commercial, industrial, public and residential) such as urban centres.

In the UK, only 2% of heat is currently supplied by heat networks however the government, in its 2015 autumn review announced £320m capital allocation to the Heat Networks Investment Programme (HNIP) over the next 5 years. This is expected to support UK’s development of heat networks, to provide impetus to necessary innovation and to leverage an additional capital investment of around £2bn into the sector over the next 10 years.

Investment environment in the UK

The UK has a long way to go to fully exploit the potential of heat networks. The networks that have been built to date have been funded largely by public sector sponsors e.g. local authorities and private sector owner-operators trying to meet energy efficiency targets on new-builds. To achieve the desired scale and the build rates needed to realise heat network’s carbon reduction contribution, a greater diversity and breadth of investors is key.

Heat, energy decarbonisations and heat networks

Heating and hot water account for over 80% of domestic and just under 60% of non-domestic energy consumption, making heat decarbonsiation extremely important for UK to meet its legally binding carbon reduction target set in the Climate Change Act, as well as to deliver on the commitments made in the Paris Agreement.

Nearly 70% of current heating comes from natural gas and for UK to achieve its low carbon targets requires a dual focus on overall greater energy efficiency and the use of heat networks

This paper highlights the scope and potential of this opportunity and request for your feedback, your thoughts and questions that you may have on the ‘Heat Networks Opportunity’ after reading this paper. Please email news@thriverenewables.co.uk

This information was taken from the Heat Networks report produced by ESC and supported by Thrive Renewables. Read the full report here.