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Heat Network Efficiency Scheme (HNES) opens for application

7th Feb, 2023

Gemserv is delighted to announce that the Government’s Heat Network Efficiency Scheme (HNES) is now open to applicants in England and Wales.

The £32 million grant support programme is designed to support improvements to existing district heating or communal heating schemes that are not performing to their maximum efficiency, resulting in poor outcomes for customers and operators.

The scheme will run until 2025 and follows on from the HNES Demonstrator. The Demonstrator ran from October 2021 to March 2022 and saw significant interest from local authorities, housing associations and private heat network operators. HNES aims to address issues identified in previous work by the Department for Business Energy and Industrial Strategy (BEIS), which outlined how some consumers are detrimentally being affected by sub-optimal heat networks with lower efficiencies, resulting in increasing fuel costs.

Heat networks support the UK’s net zero goals and have been identified as an essential component of clean and cost-effective decarbonisation of UK heat. With thousands of heat networks in operation around the country already, there is a need to ensure that these are operating to their optimum efficiency. HNES forms a key part of the Government’s Heat Network Transformation Programme (HNTP) which aims to continue to develop and grow the heat network market and to address some of the challenges of decarbonising the UK’s heat sector. HNES helps to address the cost-of-living crisis for heat network customers and seeks to deliver better operational efficiencies in the medium to long term.

Existing heat network owners or operators can apply to HNES for either revenue grant funding or capital grant funding from 7th February 2023. The HNES guidance document details the application process, eligibility criteria and Monitoring and Reporting obligations for successful applicants. The scheme will run multiple funding rounds, with the first round closing to applicants on 31st March 2023.

Business and Energy Minister Lord Callanan said:

This £32 million boost will provide thousands of homes in England and Wales with cheaper, greener energy through upgrades these heat networks desperately need.

We’re investing in new heat networks, but it’s just as important to maintain and refurbish existing systems to ensure all customers can benefit from reduced energy use and household bills.

Commenting on the launch of the scheme, Louise Singleton, Principal Consultant at Gemserv said:

Owners and operators of heat networks in England and Wales face a number of barriers to improving the efficiency of their schemes and as a result some customers are not getting the experience we would expect. The launch of the Heat Network Efficiency Scheme today is really exciting, and we hope it will increase consumer trust and drive-up standards across the sector. We are delighted to be supporting applicants on their HNES journey alongside our partners Ramboll, Turner and Townsend and Lux Nova. We are looking forward to meeting with applicants and seeing the projects in the pipeline come to life.

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 agreed criteria.

Applicants interested in applying for the scheme can express their interest by emailing



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

General enquiries and expressions of interest can be sent to,

Gemserv is being supported in delivering HNES by Ramboll who will be providing technical assessment, Turner & Townsend providing applicant support and Lux Nova providing legal support.


Louise Singleton

Principal Consultant – Low Carbon

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