Government funding will unlock low carbon heat network growth

Monday 23rd March 2020 |

A £270 million government funding commitment to continue the growth of low carbon heat networks across the UK, announced as part of the March 2020 Budget, has been welcomed by Switch2 Energy.

The multi-million pound Green Heat Network Fund will be available from 2022 to 2025, continuing on from the existing £320m Heat Network Investment Project. The additional money is designed to encourage the shift away from natural gas fuelled communal heating systems towards low carbon heat sources, such as heat pumps.

“This substantial funding commitment will help underpin the growth of cleaner, greener heat networks that can supply millions more homes with  affordable, reliable, sustainable energy”, said Richard Slee, CEO of Switch2 Energy.

“Heat networks are already a greener alternative to traditional individual heating systems, but it is vital that the sector weans itself of gas. This funding will enable the transition to lower carbon 4th and 5th generation options that can help the UK deliver on its net-zero ambitions.”

Currently, around 500,000 customers are supplied with heating and hot water from approximately 14,000 heat networks. The Association for Decentralised Energy (ADE) estimates that this additional funding will enable 4.25m homes to be served by heat networks by 2050.

Ian Calvert, Director of The ADE said: “This announcement recognises the considerable contribution that heat networks can make to decarbonising heat and reaching the net zero target. This shows that Government believes in the industry’s intention to step up in our contribution to tackling climate change. The focus on delivering low carbon heat to homes and businesses via networks mirrors the commitment to green heat that will be championed by the Heat Network Industry Council, and we look forward to working together with Government.”

Richard Slee added: “Heat Networks are key to the urgent challenge of decarbonising the UK’s heating supply, which accounts for around 18% of total CO2 emissions. The sector currently provides around 2% of heat demand, but this new funding in combination with the recent market framework proposals, can help unlock major expansion of the industry.”