Detailed guide: Heat networks delivery support

By HM Government

The benefit of heat networks

Heat networks can contribute to local authorities’ targets and aspirations for carbon emissions reduction, fuel poverty, cost reduction, regeneration, local jobs and growth. In turn, local authorities have a vital role in developing heat networks; as sponsor, pivotal heat customer, heat source, planning authority and relationship brokers.

Available support

Recognising the capacity and capability challenges which local authorities identified as barriers to heat network deployment in the UK, the Heat Network Delivery Unit (HNDU) was established by the Department of Energy and Climate Change to provide grant funding and guidance to local authorities in England and Wales. This honoured a commitment in ‘The future of heating: meeting the challenge’ (published in March 2013) to support local authorities exploring heat network opportunities.

The HNDU is staffed by experts, who have gained experience developing heat networks outside the civil service working on technical or commercial aspects of heat networks for consultancies or local authorities.

The HNDU support local authorities through the following stages:

Phase Detail
Heat mapping Area-wide exploration, identification and prioritisation of heat network project opportunities
Energy master planning Area-wide exploration, identification and prioritisation of heat network project opportunities
Feasibility study Project specific – An increasingly detailed investigation of the technical feasibility, design, financial modelling, business modelling, customer contractual arrangements and delivery approach, up to business case
Detailed project development Project specific – An increasingly detailed investigation of the technical feasibility, design, financial modelling, business modelling, customer contractual arrangements and delivery approach, up to business case

The process

Local authorities apply for HNDU support through bidding rounds, of which there have been four to date.

All bids are reviewed by a panel of engineering, financial and commercial experts with significant experience in heat networks development.
Grant funding of no more than 67% of eligible costs is provided to successful local authorities under section 31 of the Local Government Act.
Eligible costs are defined as externally commissioned consultancy costs for heat network development work.

If successful, each local authority is assigned an HNDU staff member as ‘Project Lead’ and their work together is supported through an online collaboration site and face to face meetings.

For further information on the Heat Networks Delivery Unit, please email hndu@decc.gsi.gov.uk or call 0300 068 8125

Success to date

Since its inception in September 2013 the Unit has awarded support to 180 unique projects across 115 local authorities including £9.7 million of grant funding. The Unit is currently scheduled to run until March 2016.

As set out in Delivering UK Energy Investment: Networks released in January 2015, DECC analysis suggests the portfolio of HNDU projects alone could represent between £400 million to £800 million of capital investment opportunity over the next 10 years (on an assumption of 25% to 50% of current projects coming to fruition).

Related publications and tools

Source:: Detailed guide: Heat networks delivery support