Energy bills could fall for 750,000 homes in £90m heating boost

The funding will support new low-carbon heating systems, extend existing networks and repair inefficient infrastructure, with the aim of reducing waste and cutting energy bills.

Heat networks supply hot water to multiple buildings from a central source. This can include excess heat produced by places such as data centres and factories, which is then transported through a network of pipes.

The Government says the latest investment will also support more than 2,000 jobs across the projects.

One of the biggest schemes will be in London, where a new heat project under and alongside the River Thames is set to supply clean heat to 650,000 homes, with the potential to benefit more than one million people.

Backed by £41 million, the project will initially transport hot water 25 kilometres each day by electric barges along the River Thames before sending it through a specially constructed tunnel beneath the river.

The scheme, which is subject to planning consent, could unlock around £5 billion of investment in London's local heat networks and create skilled jobs in tunnelling, engineering and river transport.

It is designed to reduce reliance on gas, with similar systems already operating in cities including Copenhagen, Amsterdam, Vienna and Berlin.

Households could see lower bills

In Bradford, 255 homes, a hospital and seven schools and colleges will benefit from an extension to the city's existing heat network, backed by £9.7 million.

Other projects include:

• Solihull: £3.9 million to extend the existing heat network serving council buildings, a leisure centre, theatre and college.
• Bexley and Greenwich: £11.5 million to develop a network which could eventually serve up to 100,000 homes.
• Marble Arch: £11.4 million for a network serving offices, homes, hotels and businesses around Oxford Street using water-source heat pumps.

The Government has also committed £13.3 million to upgrade 76 inefficient heat networks across England and Wales.

The work includes replacing leaky pipes, insulating pipework to reduce heat loss and installing new equipment in homes so residents can have greater control over their heating.

Projects include £1 million to improve heating for 130 residents in Manchester, £5.5 million to upgrade systems serving 1,143 residents in London and £374,900 for improvements in Newport and Abergavenny.

Martin McCluskey, Minister for Local Energy and Jobs, said: "Clean power and clean heat benefits communities across our country. Building the infrastructure to deliver it is reindustrialising the UK and rolling out cutting-edge energy technology so families can benefit from lower bills, good jobs and energy security.

"And for those already using heat networks, we are upgrading inefficient systems to make sure people get the high-quality, low-cost, reliable heating they deserve."

Meghan Newman, Policy Manager at ADE: Heat Networks, said: "This funding is a clear signal that heat networks matter. To hit our climate goals, we must be just as focused on fixing inefficient legacy systems as we are on building the smart networks of the future.

"That’s how we cut bills and deliver results for consumers."

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One building is already saving £438 a year

The Government has highlighted the Vega Building in Brighton as an example of what improvements to existing heat networks can achieve.

Residents in the 40-home building are now saving £438 a year on their heating and hot water bills following improvements to the system.

The heat network had been operating at just 35% efficiency, contributing to rising energy bills when global gas prices increased in 2022.

A £200,000 grant through the Heat Network Efficiency Scheme was used to improve the engine room, insulate pipework and install new thermostatic radiator valves and heat interface units.

The changes cut gas use by 50%, helping to reduce bills and improve comfort for residents.