Heat Networks

The Heat Networks Investment Project (HNIP) was a government funding programme that closed for applications in January 2022. The key aims of the project were to: 

• Increase the number of heat networks being built. 
• Deliver carbon savings. 
• Help create the conditions necessary for a sustainable heat network market to develop. 

Our role, as part of the Triple Point Heat Network Investment Project consortium, was to handle applications to the scheme and engage with stakeholders. HNIP was succeeded by the Green Heat Network Fund (GHNF) in March 2022.

The Government’s Heat Network Efficiency Scheme (HNES) is a £32m grant support programme that opened to applicants in February 2023. It will provide funding to public, private and third sector applicants in England and Wales, to support improvements to existing district heating or communal heating projects for customers and operators. This follows on from the HNES Demonstrator which ran from October 2021 to March 2022. 

Talan has been appointed Delivery Partner supported by Ramboll, Lux Nova, and Turner and Townsend to deliver the scheme on behalf of the Department for Energy Security and Net Zero. 

The aim of the HNES is to improve heat network performance in existing/operational projects where customers and/or operators are experiencing sub-optimal outcomes. In particular, the HNES will focus on addressing customer detriment as a way of supporting heat network consumers impacted by the cost-of-living crisis and the cost-of-energy crisis, with focus on where customer need is greatest. 

The HNES objectives are to: 

• Reduce carbon emissions by making heat networks more efficient. 
• Reduce customer detriment to improve consumer confidence. 
• Help prepare the heat network market for sector regulation and technical standards.

The Green Heat Network Fund (GHNF) is successor to the Heat Networks Investment Project (HNIP). Capital grant funding is offered to support the commercialisation and/or construction of new heat networks, or the retrofitting and expansion of existing heat networks.

Similarly to HNIP, the key aims of this project are to: 

• Increase the number of heat networks being built. 
• Deliver carbon savings. 
• Continue to create the conditions necessary for a sustainable heat network market to develop. 

Our role continues as part of the Triple Point Heat Network Investment Project consortium, handling applications to the scheme and engaging with stakeholders.

Heat networks are a key part of the government’s strategy to reach net zero emissions by 2050, and the market is set to grow rapidly. All this recognises the Climate Change Committee’s recommendation that around 18% of UK heat should come from heat networks by 2050. They currently provide about 2-3%. In support of market development, heat networks are on a trajectory to become a regulated utility, similar to gas and electricity. 

A key enabler of growth will be the introduction of technical assurance standards and procedures to ensure high performance and good consumer outcomes. HNTAS is expected to underpin this regulation to ensure a minimum level of performance and reliability for heat networks, leading to good consumer outcomes. 

The objectives of HNTAS are: 

• Lower cost of heat, resulting from higher efficiencies 
• Enhanced reliability, with fewer planned and unplanned outages 
• Better quality of heat, ensuring required temperatures to consumers 
• Lower carbon emissions 
• Confidence in the quality of networks while promoting competition and innovation 
• Proportionate processes 
• An operable assurance scheme that the sector can implement 

The core principles are that the scheme be outcomes focused, preventative, proportionate, deliverable, adaptable and enforceable.

Talan are leading on the governance workstream and is supporting the technical workstream. We have also been facilitating discussions across the key elements of a heat network to gain consensus on and produce a set of explanatory documents. We are considering how the rules come together into workable schemes that reflect regulatory requirements, the heat network development process, the assurance industry’s capacity to undertake conformity assessment.