The department for Business, Energy and Industrial Strategy (BEIS) has announced a £40 million funding package for seven district heating schemes - part of the Government's £320m Heat Networks Investment Project, which is designed to accelerate the growth of the market.
This announcement coincided with publication of a consultation ‘Heat networks: building a market framework’ that proposes new measures for improving customer service, ensuring fair pricing and encouraging the growth of a low carbon heat network sector across the UK.
Richard Slee, chief executive of Switch2 Energy, said: “It is good to see the government investing in the heat network sector and planning regulation that will raise levels of service and performance.
“The appointment of Ofgem as regulator will make sure that the entire industry adheres to the high standards that organisations like us already voluntarily commit to through The Heat Trust and Chartered Institution of Building Services Engineers (CIBSE)/The Association for Decentralised Energy (ADE) code of practice.
“We fully support plans for developing technical capabilities to improve the quality, cost and reliability of heat networks. In the current interim period, as heat networks transition away from gas to fourth and fifth generation systems, it is vital to improve efficiency of existing schemes. There is massive potential to use digital technologies to raise performance, as evidenced by our Optimise data centric management platform, which is delivering efficiency savings of 35 per cent.”
Heat Networks are a proven and cost-effective method of reducing the carbon intensity of UK heating, but are underexploited, accounting for only two per cent of current heat demand. The Committee on Climate Change (CCC) has estimated that around 18 per cent of the UK's heat supply could be provided by heat networks if the nation is to achieve its 2050 net zero commitment.
Mr Slee added: “While heat networks already deliver lower carbon performance than traditional alternatives, the sector must rapidly reduce its reliance on natural gas and we welcome the decarbonisation proposals, particularly measures to capture and recycle waste heat. These heat losses currently exceed the UK's total heat demand.”
Ian Calvert, director of ADE said: “For too long, the heat sector has played second fiddle in the fight against climate change, overlooked for more familiar technologies like electric cars and wind turbines. The announcement that the Government will bring forward its consultation on heat networks is most welcome.
“We are delighted to see £40m invested in seven projects that will bring jobs and unleash investment up and down the country.”