Heat networks are to become a regulated, investable sector in Britain. In a speech to the Association for Decentralised Energy conference published on October 23, Minister for Local Energy and Jobs Martin McCluskey set a target for heat networks to meet 7 percent of heat demand in England over the next ten years, doubling the current level, and a fifth of all heat across England by 2050.
The funding record cited was concrete. Across four Green Heat Network Fund announcements in the past 12 months, the government has confirmed more than 200 million pounds for 20 low carbon heat network projects, and the Heat Network Efficiency Scheme has allocated almost 35 million pounds across 65 projects affecting more than 10,000 residents. The fund has also been expanded to projects in Wales.
Regulation is the other half of the offer. Ofgem now regulates heat networks, with powers over unfair pricing and poor service for the half a million consumers on a network, and consumers can seek redress through the Energy Ombudsman. The government is consulting on mandatory minimum technical standards.
On financing, McCluskey said the government is working with the National Wealth Fund on greater support for the sector and is assessing options including a regulated asset base model, explicitly to unlock long term private investment and bring down the cost of financing major heat infrastructure. At least 10 of the largest English towns and cities are to receive support to establish heat network zones once zoning regulations go live.