29 June 2016

The government is relying on heat networks to deliver a significant amount of the carbon savings required in the fourth and fifth carbon budgets. The comprehensive spending review in November 2015 announced £320 million of new funding for heat networks – christened the Heat Networks Investment Project (HNIP).

Our view at Regen is that it is vital this funding is carefully targeted to get actual projects delivered. We therefore set up a session of our regular local authority District Heat Forum in June to help the Department of Energy & Climate Change (DECC) get feedback on the design of the fund. The session provided some clarity on the HNIP:

  • The HNIP is due to launch in autumn 2016 and first payments are due to be in March 2017
  • The focus of the scheme is carbon reduction
  • New heat networks, expansions, refurbishments, and interconnections are all likely to be eligible
  • Eligible heat networks may need to meet at least one of the following factors – more than 50 per cent renewable energy, 50 per cent recovered heat, 75 per cent CHP or 50 per cent combination of average heat generated per annum
  • Future-proofing of potential projects is vital.

The DECC graphic below provides some guidance on the scope of the support.

DECC has a good grasp of many of the issues but still wants to hear your views, particularly any financial information on heat networks – email heatnetworks@decc.gsi.gov.uk with your feedback. A formal DECC consultation has also been announced, available here. Applications close 3 August 2016.

An area of particular interest to Regen is smaller community scale heat networks – we recently published on behalf of DECC, some community-led heat network guidance. We believe that progress at this community scale will be vital alongside city scale schemes and have pressed DECC to support this end of the market.

Regen is keen to continue its work with local authorities, asset owners, technology providers and other partners to develop the heat network sector with support from the HNIP. This is an area of growth and opportunity that has gained considerable funding at a time of intense departmental budget scrutiny.

If you would like to discuss this further please get in contact – ofrankland@regensw.co.uk.