Heat Networks

Heat Networks

Megan HULME

What are Heat Networks?

How do we support clients?

Our Projects

Our Experience

Scaling Low Carbon Technology

Heat networks are a vital tool in decarbonising the UK’s heating sector. They are a proven, cost-effective way of providing reliable, efficient, low carbon heat at a fair price to consumers, while supporting local regeneration.

Green heat networks offer the potential to capture waste heat or generate renewable heat at scale.

A heat network is a centralised system that supplies hot water and/or space heating to multiple buildings, or multiple customers within one building, from a single energy source. This source powers an energy centre, which distributes heat in the form of hot water through a network of insulated pipes. These pipes deliver heat to each connected property, while a separate return system carries cooler water back to the energy centre to be reheated. Although primarily used for heating, some systems can also provide cooling, though this is far less common.

At Talan, we work with the UK Government to deliver its Increasing pace and scale growth stage. This includes the Green Heat Network Fund (GHNF), which supports the commercialisation and construction of new heat networks and the greening and expansion of existing heat networks, as well as the Heat Network Efficiency Scheme (HNES), which helps to improve the operational performance of existing heat networks.

We also help to develop the Heat Network Technical Assurance Scheme which will drive up standards across the industry. Additionally, we have worked with local authorities to help them understand the skills and knowledge required to build and maintain heat networks in their regions. Our work to support the growth of Heat Networks extends to Ireland, Northern Ireland, Wales, Scotland and the Isle of Man.

Our services to industry include advice on commercial strategy, market entry and investment of a range of businesses including project developers, manufacturers and the financiers.

A construction worker walking along pipelines.

How we support clients to enter the market

Talan supports a wide range of organisations to undertake research projects within the heat network space. Our dedicated policy team have a strong understanding of the UK and international policy landscapes for heat networks, supporting organisations with policy lobbying, public affairs and communications. We specialise in:

Economic analysis
Policy advocacy
Stakeholder engagement
Market mapping
Entry routes
Marketing & communications

Recent consultancy projects included those supporting the Sustainable Energy Authority of Ireland (SEAI) to develop a roadmap for the Irish district heating sector, with actionable recommendations to expand and decarbonise the sector. We also worked alongside the Irish District Energy Association (IrDEA) to develop a low carbon heating options appraisal for district heating technologies, identifying where and to what extent district energy is the most economical low-carbon option for Irish heat consumers. Talan currently supports manufacturers of heat network solutions to navigate the UK’s policy landscape and undertake meaningful research, drawing on our strong capabilities.

Smiling man wearing a suit and hard hat walking through a heat network.

Our Projects

Heat Networks Investment Project (HNIP)

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.

Green Heat Network Fund (GHNF)

The Green Heat Network Fund (GHNF) is the 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 Network Efficiency Scheme (HNES)

The Government’s Heat Network Efficiency Scheme (HNES) is a £107m grant support programme that opened to applicants in February 2023. It provides funding to public, private and third sector applicants in England and Wales, to support improvements to existing district heat networks or communal heat networks for customers and operators. This follows on from the HNES Demonstrator, which was also delivered by Talan from October 2021 to May 2022.

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

The aim of HNES is to improve heat network performance in existing/operational projects where customers and/or operators are experiencing sub-optimal outcomes. In particular, HENS focuses on addressing customer detriment as a way of supporting heat network customers 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.

Heat Network Technical Assurance Scheme (HNTAS)

Heat networks are a key part of the Government’s strategy to reach net zero emissions by 2050 and are expected to meet around a fifth of all heating demand by 2050, up from 3% today. All this recognises the Climate Change Committee’s recommendation that around 18% of UK heat should come from heat networks by 2050. 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.