PRESS RELEASE : £32 million boost to upgrade existing heat networks and reduce energy costs [February 2023]

The press release issued by the Department for Business, Energy and Industrial Strategy on 7 February 2023.

New scheme will make existing heat networks in England and Wales more energy efficient – reducing emissions and household bills.

Old and inefficient heat networks will be given a £32 million cash injection to produce cheaper energy and reduce carbon emissions for thousands of homes across England and Wales.

Through the newly launched Heat Network Efficiency Scheme, out of date equipment will be upgraded with energy efficient alternatives such as replacement pumps, pipe insulation and underfloor heating controls. Cutting-edge data monitoring systems will also be introduced to check systems are performing correctly.

The new scheme will deliver improvements to existing heat networks, helping consumers in more than 100,000 homes reduce their energy use – lessening the burden of increasing heating bills.

The changes will help prevent against breakdowns where customers are without heat and hot water and reduce instances of homes and corridors becoming too hot through heat escaping from inefficient piping.

Business and Energy Minister Lord Callanan said:

This £32 million boost will provide thousands of homes in England and Wales with cheaper, greener energy through upgrades these heat networks desperately need.

We’re investing in new heat networks, but it’s just as important to maintain and refurbish existing systems to ensure all customers can benefit from reduced energy use and household bills.

Heat network operators, such as universities, NHS Trusts and charities, will be able to bid for funding from today by requesting an application form from delivery partner Gemserv.

Some heat networks haven’t been upgraded since they were installed more than 40 years ago, meaning many are inefficient due to not being installed properly, poorly maintained or the equipment has begun to wear out.

Heat networks offer carbon emissions savings by supplying heat to buildings from a central source, avoiding the need for households and workplaces to rely on individual, energy-intensive heating solutions – such as gas boilers. As such, heat networks provide a significant contribution to the UK’s carbon reduction commitment.

The Heat Network Efficiency Scheme (HNES) forms an important part of the government’s support for heat networks which also includes the £288 million Green Heat Network Fund.

HNES follows and builds on the HNES Demonstrator, a one-year project which ran until March 2022. As well as delivering improvements to 37 existing heat networks, HNES Demonstrator supported 73 projects to identify cost-effective improvement measures.

Stephen Knight, Director at Heat Trust, the national consumer protection scheme for heat network customers said:

At Heat Trust we sadly hear of far too many examples of inefficient and poorly performing heat networks. These can result in much higher energy costs for residents, overheating corridors and frequent breakdowns.

The rise in gas prices over the last year has meant that inefficient heat networks are now expensive for residents. The Heat Network Efficiency Scheme is therefore an important step in the right direction, and I would urge all those responsible for running heat networks to consider bidding for funding.

To further improve the operation of existing heat networks, a series of guidance videos has also been published today that sets out the practical steps that operators of heat networks can take to improve the performance of their systems.

The government is delivering energy bill support to consumers on heat networks through the Energy Bill Relief Scheme and passed legislation last year to ensures that suppliers pass on savings to residents.

This is on top of the £400 that all consumers receive off their energy bills this winter via the Energy Bills Support Scheme and for support with electricity bills through the Energy Price Guarantee.