£3.5 million is being awarded in Round 4 of the Government’s Heat Network Efficiency Scheme (HNES) to 20 local authorities, housing associations, NHS trusts, universities and private sector organisations. The funding aims to improve the performance of heat networks, so they provide better services to their customers, increased efficiency and reduced energy costs.
This latest announcement of £3.5 million will positively impact 25 heat networks across England and Wales, benefiting 5,700 residents, including students, hospital patients, and other private and public sector occupants. This brings the total funding awarded under HNES to over £28 million. Notably, the news comes as the scheme celebrates its one-year anniversary since opening for applications in February 2023.
Furthermore, capital grant funding will result in annual carbon savings of over 422 tCO2e per year over the next 40 years, equivalent to removing the annual emissions of 172 diesel-powered cars, or 6,883 across 40 years. Revenue grant funding will also enable optimisation studies, identifying opportunities for additional carbon savings in the coming years.
Swan Housing, an East London and Essex-based housing association, is among the recipients, being awarded almost £700,000 from HNES for the Bow Cross Estate heat network in Tower Hamlets. The funding will benefit 543 residents, enabling improvements to the network’s efficiency levels. HNES support aims to reduce heat losses, providing greater comfort and improved resilience, particularly for low income, vulnerable residents and those at risk of fuel poverty.
HNES is an integral part of the Government’s broader Heat Network Transformation Programme (HNTP), focusing on developing new heat networks and improving existing ones. This will aim to encourage further investment in the sector and ramp up the UK’s decarbonisation efforts. The scheme provides both capital and revenue funding to optimise inefficient heat networks, enhancing overall performance for the benefit of residents, and ensuring they are futureproofed.
Lord Callanan, Minister for Energy Efficiency and Green Finance, has welcomed today’s HNES funding announcement:
Customers living on heat networks need to get the regular, reliable heating and hot water they are entitled to.
This important funding will help upgrade inefficient systems, preventing breakdowns and using less energy, while allowing customers to reduce their energy bills and keep their homes warm.
It’s part of our plan to ensure every home in the country can cut their energy use and save money on their bills.
Louise Singleton, Principal Consultant at Gemserv, added:
We’re pleased to announce the success of Round 4, with a significant funding allocation of £3.5 million, just as we celebrate the scheme’s one year anniversary.
The diverse range of projects funded in this round is something we are particularly proud of, with the funding set to deliver heightened heat network efficiency for residents in social housing, those within the NHS and students at universities across England and Wales.
Funding delivered under HNES plays a crucial role in supporting the transformation of older heat networks into resilient, low carbon heating solutions, strategically preparing for upcoming sector regulations in 2025.
Below is a summary of the projects which have successfully secured HNES funding in Round 4.
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 £3 million will directly improve the efficiencies of heat networks serving 3,101 residents.
Housing Associations and Social Housing Providers
Bow Cross Estate
Swan Housing Association has been awarded £686,296 for improvements works on the Bow Cross Estate heat network. This funding will be matched with significant additional investment by Swan Housing Association. It will support upgrading the primary heat network pipework and the distribution pumps and control systems at the energy centre. Taken together, these works will mitigate heat losses, enhance network efficiency, and improve overall system resilience, benefitting residents.
Local Authorities
Philpot Square Heat Network
The London Borough of Hammersmith and Fulham has been awarded £754,609 for the Philpot Square heat network. The project involves a full upgrade of the network covering the plant room, distribution systems and apartments. New inverter driven pumps, a pressurisation and expansion system, a plant room buffer vessel, new distribution pipework with improved insulation, Heat Interface Units and Thermostatic Radiator Valves will be installed. This will eliminate service interruptions, improve efficiency levels and allow residents to be billed based on usage rather than a fixed fee.
Spedan Close Heat Network
The London Borough of Camden has been awarded £659,641 for the Spedan Close Heat Network. The project involves a complete upgrade of the whole network to address extremely high numbers of service interruptions. Work will cover the plant room, distribution systems and dwellings, including the installation of inverter driven pumps, distribution pipework with improved insulation, Heat Interface Units and Thermostatic Radiator Valves. This will improve efficiency levels and ensure residents only pay for the heat they use.
Private Sector
Greenwich Millennium Village
Switch2 has been awarded £773,178 for the Greenwich Millennium Village (West) heat network to install 435 new Heat Interface Units, as well as to upgrade insulation on part of the primary network and replace automatic air release valves. This will reduce unplanned outages, improve network performance as well as reduce maintenance costs.
First Central
First Central Heating Company Limited has been awarded £192,562 for the First Central heat network. Funding will support the introduction of an improved control strategy across the network, replacement of the degasser and pressurisation systems and distribution pumps. It is expected that these works will improve system reliability, reduce heat losses and significantly reduce carbon emissions.
Revenue Grant Funding
Projects across England and Wales in Round 4 have also been awarded over £413,000 of revenue grant funding to undertake optimisation studies to review the performance of their heat networks and identify areas for improvement.
The following organisations have been awarded revenue grant funding for optimisation studies:
Housing Associations and Social Housing Providers
Wythenshawe Community Housing Group, for the Hollyhedge Court Road heat network.
Rochdale Boroughwide Housing Limited, for The Strand Community Hub and social housing heat network.
Thirteen Group Limited, for the Nolan House and Kennedy Gardens heat networks.
Plus Dane Housing, for the Brunswick Street Estate and Conway Court heat networks.
Linc Cymru, for the Danygraig heat network (Communal ASHP serving individual HIU’s in 33 flats).
Health and Education Organisations
Newcastle upon Tyne Hospitals, for the Freeman Hospital heat network.
Royal Devon University Healthcare NHS Foundation Trust, for the RD&E Hospitals (Wonford and Heavitree), and the Pathology and Mortuary Block heat networks.
Lancaster University, for the Bailrigg main campus district heating network, serving over 20,000 full-time students and staff.
Local Authorities
Rotherham Metropolitan Borough Council, for the St Annes and Beeversleigh heat networks.
Suffolk County Council, for the Endeavour House heat network.
Private Sector & Others
Lifestory Group Limited, for the Chapter House heat network.
FirstPort Group Limited, for the Park 25 Redhill heat network.
Highbury Square Management Company Limited, for the Highbury Square heat network.
Berkeley Homes (North East London), for the KSS1 heat network.
B&D Energy Limited, for the Weavers Quarter heat network.
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.
