Through the newly launched Heat Network Efficiency Scheme, out of date equipment will be upgraded with energy efficient alternatives such as replacement pumps, pipe insulation and underfloor heating controls. Cutting-edge data monitoring systems will also be introduced to check systems are performing correctly. 

The new scheme will deliver improvements to existing heat networks, helping consumers in more than 100,000 homes reduce their energy use - lessening the burden of increasing heating bills. 

Heat network operators, such as universities, NHS Trusts and charities, will be able to bid for funding by requesting an application form from delivery partner Gemserv. 

Some heat networks haven’t been upgraded since they were installed more than 40 years ago, meaning many are inefficient due to not being installed properly, poorly maintained or the equipment has begun to wear out. 

Heat networks offer carbon emissions savings by supplying heat to buildings from a central source, avoiding the need for households and workplaces to rely on individual, energy-intensive heating solutions - such as gas boilers. As such, heat networks provide a significant contribution to the UK’s carbon reduction commitment. 

The Heat Network Efficiency Scheme (HNES) is meant to form an important part of the government’s support for heat networks, which also includes the £288 million Green Heat Network Fund. 

HNES follows and builds on the HNES Demonstrator, a one-year project that ran until March 2022.  As well as delivering improvements to 37 existing heat networks, HNES Demonstrator supported 73 projects to identify cost-effective improvement measures. 

To further improve the operation of existing heat networks, a series of guidance videos have also been published that set out the practical steps that operators of heat networks can take to improve the performance of their systems.

Business and Energy Minister Lord Callanan said:? “This £32 million boost will provide thousands of homes in England and Wales with cheaper, greener energy through upgrades these heat networks desperately need. 

“We’re investing in new heat networks, but it’s just as important to maintain and refurbish existing systems to ensure all customers can benefit from reduced energy use and household bills.”  

Stephen Knight, Director at Heat Trust, the national consumer protection scheme for heat network customers said: “At Heat Trust we sadly hear of far too many examples of inefficient and poorly performing heat networks. These can result in much higher energy costs for residents, overheating corridors and frequent breakdowns. 

“The rise in gas prices over the last year has meant that inefficient heat networks are now expensive for residents. The Heat Network Efficiency Scheme is therefore an important step in the right direction, and I would urge all those responsible for running heat networks to consider bidding for funding.” 

HNES will provide funding for existing projects through £30 million of capital grants to part-fund delivery of network efficiency upgrades, and £2 million of revenue grants to fund heat networks procuring third-party support to identify and assess packages of efficiency improvement measures. 

HNES is open to applicants in England and Wales that are responsible for operating or managing existing district heat networks or communal heating systems. These include: 

• Public sector organisations including NHS trusts and universities and other government departments 
• Private sector organisations that are registered companies and submit annual accounts 
• Third sector organisations such as registered charities, community investment companies and other such organisations that are officially registered and submit annual accounts.

Glynn Williams, UK Country Director at Grundfos, commented: “The Heating Network Efficiency Scheme gives our energy infrastructure a much-needed face-lift.

“Heat networks are an alternative to individual energy-sapping gas boilers, but many have been neglected since their installation over four decades ago.

“Government must therefore mandate local authorities to prepare optimisation plans for heat networks by 2024, delivering the energy efficiency that people sorely need.

Our research has found that 60% of consumers are currently worried about spiralling energy bills. This new scheme is an important step towards alleviating these concerns and unlocking the energy-saving potential of heat networks.”