The Government has announced £90 million of investment in new and upgraded heat networks, saying the projects will provide cleaner and cheaper heating for more than 750,000 homes.
The package will fund the development and expansion of low-carbon networks while paying for repairs to inefficient existing systems, including the replacement of leaking pipes and improvements intended to reduce wasted energy.
The largest award is £41 million for a proposed heat project operating under and alongside the River Thames. Ministers say the scheme could eventually supply 650,000 homes and help unlock approximately £5 billion of wider investment.
However, the £5 billion figure is a projected outcome associated with the Thames project rather than additional government spending. The confirmed public funding announced across the programme is £90 million.
How heat networks work
Heat networks supply heating and hot water to multiple buildings from a shared central source. Hot water is distributed through insulated pipes to homes, businesses and public buildings.
The heat can come from technologies including large heat pumps, geothermal sources and excess energy produced by factories, data centres or waste facilities. Capturing heat which would otherwise be lost can reduce fuel use and make densely populated areas less dependent on individual gas boilers.
Residents connected to a network receive their heating through a heat-interface unit inside the property. The efficiency of the central system and its pipes therefore has a direct effect on reliability and bills.
Major project planned along the Thames
The proposed London scheme would initially transport hot water for approximately 25 kilometres each day using electric barges on the River Thames. It would then carry the heat through a specially constructed tunnel beneath the river to homes and businesses along the route.
The Government says the project could ultimately provide clean heat to 650,000 homes and more than one million residents while making the capital less reliant on gas.
Ministers believe it could unlock around £5 billion of investment in local heat networks and support up to 2,000 jobs across tunnelling, engineering and river transport.
Those figures remain forecasts rather than investment already committed or employment already created. The project is also subject to planning consent, and the Government has stressed that its funding decision is separate from the planning process.
Funding for Bradford, Solihull and London
Several other projects will receive multi-million-pound awards through the programme:
- Bradford: £9.7 million to extend the city’s existing network to 255 homes, a hospital and seven schools and colleges.
- Solihull: £3.9 million to expand a network currently serving council buildings, a leisure centre, a theatre and a college.
- Bexley and Greenwich: £11.5 million to help develop a network which could serve as many as 100,000 homes when fully constructed.
- Marble Arch: £11.4 million for a system supplying offices, homes, hotels and businesses around Oxford Street using water-source heat pumps connected to the London Chalk Aquifer. The Government says the project could create 200 jobs.
The new schemes form part of the Green Heat Network Fund, which supports public, private and third-sector organisations developing low-carbon heating infrastructure.
Seventy-six existing systems to be upgraded
The Government has allocated £13.3 million to improve 76 inefficient heat networks across England and Wales.
Work will include replacing faulty or leaking pipes, adding insulation to reduce heat loss and installing new interface units which give residents greater control over their heating.
Manchester will receive £1 million to improve systems serving 130 residents at Cornwall Court in Gorton and Cundiff Court in Levenshulme.
In London, £5.5 million will be used for networks serving 1,143 residents at Prospect House in Bermondsey and the Packington Estate in Islington. Two developments in Newport and Abergavenny will share £374,900 for upgrades benefiting 62 residents.
Government promises lower bills
Local Energy and Jobs Minister Martin McCluskey said clean heat infrastructure would deliver lower bills, skilled employment and greater energy security.
As evidence of the potential savings, the Government highlighted the Vega Building in Brighton, where residents are said to be saving £438 a year following a £200,000 efficiency grant. Improvements reduced the amount of gas used by the building’s network by half.
That case study does not guarantee equivalent savings for every household covered by the new programme. Actual bills will depend on the design, efficiency and operating costs of individual networks.
The £90 million announcement combines funding for schemes at different stages, including repairs to operating networks and support for large infrastructure projects still requiring planning approval and construction.