Combined Heat & Power

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Heat Networks

The UK heat sector is no longer playing second fiddle in the fight against climate change

6 February 2020

Two announcements made today (6 February 2020) will boost the UK heat sector in combating climate change, says the Association for Decentralised Energy (The ADE).

  • The UK Government has published a consultation on heat networks in advance of dedicated legislation and awarded £40mn to 7 projects in the first and second round of funding through the Heat Network Investment Project
  • The Scottish Government has released its budget, inclusive of business rates relief guaranteed until 2032, to provide investor certainty and committed to £50mn for the Heat Networks Early Adopters Challenge Fund.

Heat networks deliver cost effective, low carbon heat, in the form of hot water or steam, from a central point of generation to theend user through a network of insulated pipes.There are already around 500,000 customers receiving heat through heat networks, equating to around 14,000 heat networks. The CCC (Committee on Climate Change) has set a target to grow this to serve 1.5mn home in 2030, making £320mn available in funding through the Heat Network Investment Project to grow the industry. The ADE represents member companies across the entire heat network sector; from the large ESCOs to the pipe, heat pump and metering manufacturers, from local authorities to housing associations, and from heat generation to end-customer service providers.

Ian Calvert, Director of The 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 today that the Government will bring forward it’s consultation on heat networks is most welcome. We are delighted to see £40m invested in 7 projects that will bring jobs and unleash investment up and down the country. Business rates relief is a crucial step towards levelling the playing field on the rates and fees leviedon heat networks compared to other essential utilities. Significantly, these announcements signal the considerable potential that heat decarbonisation can make to reaching the net zero target. The Heat Network Industry Council, which the ADE has been convening, will release its offer to Government shortly and this consultation sets a strong direction for industry and Government working together to grow this underrated sector.

Charlotte Owen, Heat Policy Officer of The ADE said:

These announcements recognise the contribution a decarbonised, high growth heat sector could make, right across the UK. The introduction of a regulator for consumer protection is greatly welcomed, and will support the market to continue to deliver good outcomes for consumers. In 2050, heat networks will represent a significant proportion of UK heating, and as such should be placed on an equal footing with other utilities. Consumer protection is a significant part of this. The proposed introduction of statutory undertaker rights, which will reduce costs, provide greater certainty around planning and place heat networks on an equal footing with other utilities, is a very welcomed move by government

However, in striving for net zero we must press for greater action. These are welcomed measures, but for the sector to deliver the level of investment needed to meet 17% of the UK’s heating demand in 2050 we need to see sufficient policy backstops from government. The ADE would like to see the UK Government commit to policies that drive investment in the sector, including greater responsibilities for local authorities in identifying heat decarbonisation pathways through zoning. The proposals to pilot heat network zoning and explore mandatory connections is firmly a step in the right direction.

Ken Hunnisett, Project Director at Triple Point Heat Networks Investment Management, who have been instrumental in administering the HNIP funding scheme in partnership with BEIS, said:

Of course, this is only the beginning of the story. We know that there is a substantial pipeline of projects out there and as such this announcement today willbe the first of many. We hope it helps to build confidence in the market and that it encourages others to come forward and take advantage of the unique opportunity presented by the Heat Networks Investment Project (HNIP) fund.

About the ADE:

The Association for Decentralised Energy is setting the vision of a local, efficient, low carbon energy system which enables energy users to make the choices which work for them. The Association has more than 160 members active across a range of technologies and markets and is widely recognised as one of the leading industry bodies in the sustainable energy sector.

Related ADE publications:

For further information please contact:

Lucy Symons

Head of External Affairs, The Association for Decentralised Energy

Tel: +44 (0)20 3031 8740

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