BEIS launches first district heat network scheme

In November last year the government confirmed it was to support district heating networks following revelations that the UK had fallen further behind in its progress towards meeting decarbonisation targets for heat.

Following a consultation which took place earlier this year, this morning BEIS kick-started the scheme with a £39 million pilot project. This will consist of a single competitive funding round in which projects will bid for grants or loans.

Pre-qualification is to open tomorrow, with a final deadline for full applications of 28 November 2016.

The pilot scheme is only open to local authorities and other public sector bodies, and will see the initial tranche of £39 million split between the 16/17 and 17/18 financial years. Salix Financing will act as the pilot’s administrator.

The findings of the initial pilot scheme will feed into the design of the main scheme which is expected to open for applications next year and run for a period of four years.

While the pilot scheme has been restricted to local authorities, BEIS has not yet limited the main scheme to these organisations and does envisage businesses being able to benefit significantly from it in the future.

Cheshire East Council has already sought to develop its own district heating network with the help of energy company ENGIE, which is expected to save local businesses money by supplying them with locally-sourced, low-carbon heat.

“Heat networks can significantly improve the efficiency with which heat is provided to our towns and cities, as well as helping to develop local infrastructure and reduce carbon.

“The new scheme will help us to develop viable reforms to make the most of the heat we produce and use it effectively to bring bills down for people across the country,” energy minister Baroness Neville-Rolfe said.

Tim Rotheray, director at the Association for Decentralised Energy, lauded the scheme’s opening and its potential to “bring about significant benefits” for communities.

“More than 150 local authorities and a number of private sector property developers are working to deliver these infrastructure investments and build a foundation for a long-term district heating market in the UK.

“Well built and operated heat networks deliver for consumers. With Heat Trust now representing 25,000 heat customers and the continued strengthening of technical standards, the heat network industry is working with government to support its deployment ambitions over the coming years,” he added.