Fund will support projects in England where a central clean energy source channels heat to multiple properties and businesses

The government has launched a new £228m fund to support clean heat network projects in England that can help multiple homes and businesses ditch fossil gas boilers and slash their carbon emissions.

The Green Heat Network Fund will support projects where a central clean energy source provides clean heat to multiple properties and businesses, including through the use of heat pumps, solar thermal technologies, and geothermal energy.

Grants from the scheme will be distributed to heat network projects over the next three years, with the fund aiming to collectively deliver more than 9.7 million tonnes of total carbon savings by 2050, according to the Department for Business, Energy, and Industrial Strategy (BEIS). Applications for grants can be made from 14 March, it said.

“Heating in buildings forms a significant part of the UK’s carbon footprint, so changing how we warm our homes and workspaces is vital to meeting our world-leading climate change commitments,” said Energy Minister Lord Callahan. “Heat networks are an effective way of reducing carbon emissions and this fund will enable us to accelerate the roll-out of these cutting-edge and green technologies.”

The Green Heat Network Fund is the successor scheme to the £250m Heat Networks Investment Project, which supported more than 20 projects since 2018 and comes to a close this month.

While the HNIP permitted fossil fuel sources of heat, provided they delivered net carbon reductions and would be replaced by low carbon alternatives over time, the Green Heat Network Fund will exclusively support low carbon heating projects.

Lily Frencham, CEO of the Association for Decentralised Energy, welcomed the launch of the new scheme. “We’re delighted that the government is invigorating the transition to zero-carbon heating across the UK that uses good old-fashioned pipes and water to transport heat from green energy centres to homes and businesses,” she said. “Heat networks offer the most cost-effective tried and tested way of decarbonising our towns and cities and it is great to see government’s continued support for the sector through the launch of the Green Heat Network Fund.”

She added that 2022 would be a “crucial year” for the heat networks sector, noting that the technology had a crucial role to play in helping the UK meet its net zero emission goals.

The Climate Change Committee has estimated that heat networks could meet nearly a fifth of UK demand for heating by 2050.

There are currently 14,000 heat networks in Britain, according to government data, of which 2,000 are district heating networks where heat is piped to multiple buildings.

The new grant programme is launched just a few months after the government announced it had appointed Ofgem as the heat networks regulator for Great Britain.

Want to find out more about how the net zero transition will impact your business? You can now sign up to attend the virtual Net Zero Finance Summit, which will take place live and interactive on Tuesday 29 March and will be available on demand for delegates after the event.

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