DECC Gives Green Light for Major Expansion of District Heating


  • Heat Policy confirms major expansion of district heating infrastructure in town & city centres
  • Acceleration of community schemes to drive £300M of early investment and boost construction jobs
  • District heating networks to underpin transformation of UK heat supply with £2bn p.a. investment
  • Modern, efficient heating networks provide homes and businesses with controllable, affordable energy

The Government has today published its heat strategy paper, "The Future of Heating: Meeting the Challenge", paving the way for a major programme of investment in new district heating infrastructure in communities across Britain. The paper, launched by Energy & Climate Secretary Ed Davey MP, sets out measures to drive efficiency, cut costs and reduce emissions from heat supply to businesses, communities and households. The strategy confirms far reaching proposals to invest in new district heating networks in towns and cities, to operate alongside and in some cases displace gas networks. Underpinning the policy is the establishment of a new Heat Networks Delivery Unit within DECC that will provide support to local authorities and communities in accelerating decision-making and new project development.

Welcoming the Government's commitment to the widespread adoption of district heating, Graham Meeks, Director of industry body CHPA, stated: "This is the next big step in our energy infrastructure renewal, starting in the very heart of communities up and down Britain. Together with pioneering initiatives already underway in London and other cities, the measures announced today could accelerate early investment of around £300 million in new low-carbon infrastructure, and provide the platform for an estimated £2bn of investment each year in the coming decades. With that will come tens of thousands of local jobs in engineering, contracting and operations. 'Modern heat networks are efficient, fuel-flexible, convenient and controllable. Heat accounts for the largest proportion of household energy costs, and district heating offers householders secure and reliable heat along with the scope to control rising energy bills. This is a bold move that will be welcomed not just today but also by future generations of consumers."

Jeremy Bungey, Head of the energy company E.ON's Community Energy business added: "Whether new-build or retrofit, powering homes or businesses, today's announcement is a welcome endorsement of district heating and the role it can play in reducing carbon emissions and helping people to control their energy bills. Right now, E.ON is developing projects in many major cities across the UK, quite literally building energy efficiency into the foundations of communities. Today's announcement gives us as a company and the communities we work with the confidence to move forward."

Ian Whitelock, Joint Managing Director of Vital Energi, one of the UK's leading district heating developers welcomed the announcement: "The Government's decision to back district heating underlines what many local authorities and property developers have already realised, that heat networks can offer better long-term value for heat consumers when compared to the traditional utility solution. Our experience shows that when clients and consumers are equipped with a full understanding of the commercial and environmental issues, district heating will often emerge as a winner. At Vital Energi we have invested heavily in staff and training, increasing our workforce by 53% in the last two years. The capacity building that DECC is now offering is an important step in bringing local authorities to the market, supporting our efforts to grow the business and provide stable long-term jobs and opportunities for people." 

The strategy paper also addresses heat use in industry and underlines the important role for combined heat and power (CHP) technology in providing reliable and affordable low-carbon heat to these consumers. Graham Meeks welcomed this endorsement, but sounded a note of caution over prospects for capacity growth: "The strategy reinforces the value of CHP as a means of controlling energy costs to business and supplying reliable, low-carbon heat to emerging district heating networks. But the reality of today's market is one of low coal and CO2 prices undermining CHP economics. We now need to establish a coordinated and focussed policy for CHP that can sustain our existing capacity and build confidence for the new wave of investment that is essential to meet the goals of the Heat Policy."


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