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£13.9 million awarded in the first Heat Network Efficiency Scheme funding round

26th Sep, 2023

Gemserv is delighted to announce that £13.9 million has been awarded to local authorities, housing associations and private sector applicants in the first Heat Network Efficiency Scheme (HNES) funding round.

As a testament to the Government’s commitment to heat network infrastructure across Britain, Gemserv can today confirm that £13.9 million of capital and revenue grant funding has been awarded to improve the efficiency of existing district and communal heat networks. This equates to 45% of the total budget allocated to the scheme and will seek to improve heat networks serving over 11,000 residents, demonstrating its popularity and the demand for support.

Heat networks present a vital technology that can deliver efficient, lower cost heating, cooling and hot water to the UK’s built environment at scale. HNES aims to improve heat network performance in existing/operational projects where customers and/or operators are experiencing sub-optimal outcomes. With a focus on reducing customer detriment, HNES supports heat network consumers impacted by the cost-of-living crisis by enhancing efficiency and combating poorly performing networks.

Today’s announcement shows the positive engagement from heat network owners and operators across the country as they seek to embrace the technology, ensure customers are getting the best value for money and that networks are operating efficiently. The first three funding rounds have proven incredibly popular, and we anticipate that future rounds will be very competitive.

Below is a summary of some of the projects awarded in the first Heat Network Efficiency Scheme funding round.

Minister Lord Callanan welcomed the announcement today:

Families and businesses shouldn’t have to worry about whether they will receive a reliable heating and hot water supply.

This funding means improvements will be made to old and inefficient heat networks, preventing further breakdowns and ensuring they use less energy.
We’re investing millions to build new heat networks, reducing emissions and providing low-cost heating to communities across the country. But it’s equally important we upgrade and maintain existing systems so everyone benefits.

Heat networks offer carbon emissions savings by supplying heat to buildings from a central source, avoiding the need for households and workplaces to rely on individual, energy-intensive heating solutions – such as gas boilers. As such, heat networks provide a significant contribution to the UK’s carbon reduction commitment.

But some heat networks haven’t been upgraded since they were installed more than 40 years ago, meaning many are inefficient due to not being installed properly, poorly maintained or the equipment wearing out.

The Heat Network Efficiency Scheme (HNES), which opened in February this year, forms an important part of the government’s support for heat networks. This also includes the £288m Green Heat Network Fund, which supports the creation of heat network projects that use a low carbon heating source, such as a heat pump, solar or geothermal energy, to provide heat and hot water to connected homes and businesses.

Commenting on first funding announcement from the HNES scheme, Louise Singleton, Principal Consultant at Gemserv said:

Today’s announcement shows the substantial impact that HNES will have on the efficiency of heat networks across the country. Funding from the scheme today will play a huge part in improving the efficiency and lowering the costs of domestic heating for thousands of residents and businesses. Nearly £14 million awarded will ensure existing heat network infrastructure is fit for the future, ensuring the technology can provide the most efficient, economical heating for consumers, and preparing them for greater expansion to new and existing homes.

Capital Grant Funding

Capital grant funding will go directly towards covering the cost of operational works to improve the efficiency of existing heat networks. In this round, over £13 million will directly improve the efficiencies of heat networks serving over 4,000 residents.

Housing Associations and Social Housing Providers

Notting Hill Genesis

Notting Hill Genesis, one of the largest housing associations in London and the South East, has been awarded over £3.6 million for improving the efficiency of heat networks that serve over 800 residents. Building on optimisation studies funded through the HNES Demonstrator, the Glyn Street, Windmill Park, St Pancras Way and Factory Quarter Estate projects will use their capital funding to replace HIUs and pipework, install more efficient control systems and insulation, and for other general efficiency improvements.

Southern Housing

Southern Housing, one of the largest housing providers in the UK with more than 78,000 homes across London, the South East, the Isle of Wight and the Midlands has been awarded over £176,000 to improve a heat network serving homes on Dagenham Heathway & Church Elm Lane Dagenham, Essex. Additional insulation, new HIUs and other improvements will be installed using funding from HNES which will create a more efficient heat network and as a result a reduction in resident bills and the buildings carbon footprint.

Great Places Housing Association

Great Places Housing Association, with 25,000 homes across the North West, South Yorkshire and Derbyshire, has been awarded over £1.6 million to improve the efficiency of its Richmond Park heat network, serving 299 residents across the development. Drawing on the recommendations from their HNES Demonstrator funded optimisation study, capital funding will seek to remedy high heat loss issues, bad insulation and old equipment.

The Guinness Partnership

The Guinness Partnership, with over 140,000 customers across the country, has been awarded £2 million for the improvement of four heat networks serving almost 700 residents. Taking learnings from HNES Demonstrator funded optimisation studies at Whitfield Street and Loughborough Park, these heat networks alongside Bearbrook Place and Edgeley will utilise funding to reduce heat network costs and heat losses, improve insulation and replace outdated infrastructure.

Local Authorities

Leeds City Council

Leeds City Council has been awarded over £2.2 million to improve the efficiency of heat networks serving 837 residents across the borough. Using the recommendations from their HNES Demonstrator funded optimisation studies, Cottingley Heights & Towers, Ebor Gardens and Saxton Gardens will use HNES capital funding from the first round to improve their heat networks’ efficiency through improving insulation levels, reducing heat losses and leakages and for additional improvements.

The London Borough of Hackney

The London Borough of Hackney will receive over £114,000 to improve the efficiency of two heat networks serving 64 residents at their Daniell House and Heathcote Point developments. Currently, the networks are operating at extremely low efficiencies and funding will seek to improve this through the installation of heat interface units, radiator valves and other improvements that were identified in their HNES Demonstrator funded optimisation studies.

Stockport Metropolitan Borough Council

Stockport Metropolitan Borough Council has been awarded over £1.8 million to improve the efficiency of the York Street Heat Network which currently serves 227 residents. As recommended in their HNES Demonstrator funded optimisation study, the pipework will be replaced, along with other pieces of outdated infrastructure and the heating systems within the resident’s properties will be updated.

Private Sector Developments

Switch2

Switch2, delivering heat network solutions across public, private and third sector developers, has been awarded over £822,000 to improve a heat network serving 319 residents across the City House development. Funding has been provided to address high heat losses, low efficiency levels and service interruptions through implementing a new control and maintenance strategy as well as insulating large parts of the network.

Metropolitan

Metropolitan, a leading heat network owner and operator, has been awarded £300,000 to improve the Hallsville Quarters heat network which currently serves 528 residents with a further 630 homes being connected during 2023. The funding will seek to reduce heat losses and high return temperatures through insulation, control improvements and other upgrades.

Barings Core Fund Keel Operating Limited

Barings Core Fund Keel Operating Limited has been awarded over £307,000 to improve The Keel development serving 240 residents. The funding was awarded to help reduce the heat network’s heat losses and high return temperatures as well as general unreliability. This will be done through general improvements and infrastructure updates, as recommended in their HNES Demonstrator funded optimisation study.

Avignon Property Management Limited

Avignon Property Management Limited has been awarded over £23,000 to improve the Guildhall Apartments low temperature hot water system. Funding will address inadequate heat supply to residents and flow imbalances.

 

Revenue Grant Funding

Projects across the country have also been awarded over £640,000 worth of funding for optimisation studies to review the performance of their heat networks, identifying areas of improvement to ensure high performance and maximum efficiency. This funding will contribute to improving the efficiency levels of heat networks serving over 7,000 residents. The following heat networks have been awarded revenue grant funding for optimisation studies:

Housing Associations and Social Housing Providers

Clarion Housing Group, for the Tredegar and Falconers Court heat networks, serving 134 residents.

Flagship Group, for the Munhaven Close heat network, serving 22 residents.

Great Places Housing Association, for an optimisation study of the Hutton Lodge heat network, serving 29 residents.

Home Group Limited, for the Huntley Place heat network, serving 129 residents.

Islington & Shoreditch Housing Association, for the West Central Apartments and Mildmay Avenue heat networks, serving 173 residents.

Notting Hill Genesis, for the Stoke Quay Estate and Reservoir & Watersreach heat networks, serving 479 residents.

Octavia Housing, for the Bridgewater House, Park Lodge and Jane Lidderdale House heat networks, serving 85 residents.

One Housing Group, for the Velocity and Suttons Wharf heat networks, serving 310 residents.

One Manchester, for the Erneley Close heat network, serving 32 residents.

The Guinness Partnership, for the John Hannam House, Apna Ghar and Stead Street heat networks, serving 198 residents

The Riverside Group, for the Rydal Gardens and Weetslade Court heat networks, serving 75 residents.

whg Housing Association, for the Humphries House, Austin House and St Annes heat networks, serving 393 residents.

Wolverhampton Homes Ltd, for the Hickman Estate heat network, serving 228 residents.

Local Authorities

Leicester City Council, for the Leicester District Energy Scheme, serving almost 3,000 residents.

Manchester City Council, for the Plymouth Grove heat network, serving 509 residents.

Private Sector Developments

21-39 (Odd) Addenbrooke’s Road Freehold Limited, for the Williams Building heat network, serving 10 residents.

Kingsway Court, for the Kingsway Court Heat Network, serving 109 flats on Brighton & Hove seafront. The funding will improve antiquated heating and hot water systems, cut costs, reduce environmental impact, and boost service to residents.

Switch2, for the Budenberg, Altrincham and Park Hill heat networks, serving 509 residents.

St George West London Limited, for the Fulham Reach heat network, serving 677 residents.


NOTES TO EDITORS

HNES can provide up to 50% of eligible project costs for capital grant applications and up to 100% of eligible project costs for revenue (Optimisation Study) grant applications. Applicants will need to submit a completed application form along with supporting evidence – and will be assessed and scored against criteria.

Those interested in applying for the scheme can express their interest by emailing HNES@gemserv.com.

The Heat Network Efficiency Scheme Guidance is available on the gov.uk website here.

General enquiries and expressions of interest can be sent to HNES@gemserv.com.

More information about HNES including upcoming events can be found on Gemserv’s website, the delivery partner for the HNES Scheme, here.

Gemserv has been appointed as the Delivery Partner for HNES supported by Ramboll who will be providing technical assessment, Turner & Townsend providing applicant support and Lux Nova providing legal support.

Authors