Last edited 24 Feb 2021

Heat Networks Investment Project HNIP

The Energy White Paper, Powering our Net Zero Future (CP 337), published in December 2020 by HM Government, states: ‘A heat network, sometimes called district heating, is a system of insulated pipes that takes heat or cooling generated from a central source and distributes it to a number of domestic and non-domestic buildings.’

On 29 June 2016, the Department of Energy & Climate Change (DECC) announced a consultation on how to deploy the £320 million allocated in the Spending Review to the Heat Networks Investment Project (HNIP) for investment into heat networks over the next five years.

Heating is the largest single user of energy and emitter of greenhouse gases in the UK. It accounts for around 45% of energy use: predominantly for space heating in homes and offices, heating water, cooking and industrial processes. Heat production accounts for around 30% of UK carbon emissions.

Heat networks have the potential to reduce heating costs by more than 30% for some households to reduce carbon emissions.

Heat can be taken from a range of sources including large heat pumps, combined heat and power plants and deep geothermal plants, as well as heat currently pumped into the air by waste incinerator plants, factories and offices, which can be captured by a network of pipes and pumped to homes and businesses nearby to provide warmth.

Dubbed ‘central heating for cities’, heat networks already exist in the UK in city centres such as Sheffield, Nottingham, Birmingham, Southampton and in a number of housing developments, such as the Olympic Village. However, there are far fewer networks than other European countries. There are extensive networks in France, Germany, and Scandinavian countries which deliver 'cheap' and lower-carbon heat to thousands of buildings from multiple and varied sources of heat. 90% of homes in Copenhagen are on a network.

The government aims to launch the first funding round through the Heat Networks Investment Project in 2012, followed by a series of funding rounds through to early 2021.

The Rt Hon Amber Rudd MP, Secretary of State for Energy and Climate Change said: “This is an important next step in developing more home-grown energy, which is a vital part of our plan to ensure long-term energy security and affordable energy for our families and businesses. The funding we’re consulting on today will enable these schemes to provide affordable low carbon energy to thousands of homes and businesses across Britain’s towns and cities.”

The government is consulting with current and potential heat network sponsors, investors, suppliers, and any other stakeholders, seeking views about how best to use the capital support funding to overcome barriers to investment in heat networks and increase heat network deployment rates.

They are inviting views on a range of scheme design issues, including the organisations and types of schemes that should be eligible for investment support, what form this funding should take, and the criteria that should be used to assess applications for funding.

The consultation closed on 3 August 2016.

On 17 October 2016, the Department for Business, Energy & Industrial Strategy announced that the £320m scheme would run over five years and further instalments of funding would be released in due course. The initial part of the funding, worth up to £39m, will be open to local authorities and public sector bodies. In future years this will be opened up to a wider set of applicants. Ref gov.uk New 'central heating for cities' to help reduce energy bills.