A consultation on how best to deploy £320 million for investment in low carbon heating projects in the next five years has been launched.
The Heat Networks Investment Project (HNIP) aims to create a “central heating for cities” by increasing the number of heat networks being built and creating the conditions necessary for the development of a market.
Heat networks are a distribution system of insulated pipes that take heat from a central source and deliver it to homes and businesses.
Heating accounts for around 45% of UK energy use. According to DECC, the heating costs for flats can be more than 30% lower on a gas-supplied heat network than using individual boilers.
However only around 2% of the nation’s heat is supplied via heat networks – one of the lowest levels in Europe.
The government is seeking views from current and potential heat network sponsors, investors, supply chain and any other stakeholders with views on how best to use the funding to overcome barriers to investment in heat networks and increase deployment.
It is also inviting views on the organisations and types of schemes that should be eligible for investment support, what form this funding should take and the criteria that should be used to assess applications.
Energy Secretary Amber Rudd said: “This is an important next step in developing more home-grown energy, which is a vital part of our plan to ensure long term energy security and affordable energy for our families and businesses.
“The funding we’re consulting on today will enable these schemes to provide affordable low carbon energy to thousands of homes and businesses across Britain’s towns and cities.”
DECC is accepting views until 3rd August 2016.
According to the Association for Decentralised Energy (ADE), low carbon district heating networks could succeed without subsidies from 2021.