Government adds £19m to expand heat networks funding

News & views04.01.2212:00 AM by Grainne Cuffe

The government has announced a £19.1m expansion of heat networks and appointed Ofgem as the sector’s new regulator.

Picture: Getty

The move aims to heat more homes with green energy. The new funding will go towards setting up five new heat networks: two in Bristol and three in London, Liverpool and Worthing.

Ofgem has been appointed as heat networks regulator for Great Britain. It will be responsible for enforcing rules and guidance on pricing and quality of service, while “facilitating the growth and decarbonisation of the market”.

Heat networks, communal systems in which heat is distributed from a central source to people’s homes via pipes, are a low-carbon heat source and part of the government’s plans to reach net zero.

The government aims to have the heat networks sector, which currently supplies about 2% of demand in the UK, meet about a fifth of demand by 2050.

But the systems are not without problems, with some customers reporting heating outages and high energy bills.

The funding comes from the government’s £320 million Heat Networks Investment Project (HNIP), which supports the development of heat networks across England and Wales.

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Government-funded heat networks currently being developed include Leeds Council’s 16km district heat network, Cardiff Town heat network in South Wales, spreading across the Cardiff Bay area, and Newcastle University’s district heat network within its city centre campus.

Climate change minister Lord Callanan said the expansion builds on commitments made in the Heat and Buildings Strategy to “regulate the UK’s heat networks, protect consumers, and create opportunities for green jobs and investment across the country”.

He added: “This will allow thousands of households and businesses to feel the benefits of projects that are breaking new ground and making our villages, towns and cities cleaner places to live and work.”

Jonathan Brearley, chief executive of Ofgem, welcomed the appointment and said heat networks “can play a key role in reducing carbon emissions from heating and helping to achieve the country’s climate goals”.

He added: “We will work with the government to design a regulatory framework which attracts the investment needed while ensuring heat network consumers, especially those in vulnerable circumstances, receive a fair price and reliable supply of heat for their homes as we make the transition to net zero.”

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