£320 million will be invested over the next five years in heat network schemes across the UK, in order to supply low carbon heat to homes and businesses.

The government is now consulting on how best to deploy the £320 million fund allocated in the Spending Review for investment in heat networks.

Dubbed ‘central heating for cities’, heat networks are already used widely across Scandinavian cities to keep homes warm in winter. The government believes heat networks have the potential to reduce heating costs by more than 30% in some households, with the Department for Energy & Climate Change (DECC) dubbing the investment "exciting news for the country’s towns and cities".

Instead of having individual heaters in each building, a heat network comprises a big central heat source (or more than one source), heat from which is then piped to a number of buildings.

Heat can be taken from a range of sources including large heat pumps, combined heat and power plants and deep geothermal plants, which take heat from underground rocks miles below the surface of the earth. It is then pumped around homes and businesses, potentially bringing down the cost of energy bills and it also helps to reduce carbon emissions.

DECC believes heat from waste incinerator plants can also be harnessed in this way, distributing it to nearby homes and businesses.

Amber Rudd MP, Secretary of State for Energy and Climate Change, 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."

More information on the consultation can be found here: https://www.gov.uk/government/consultations/consultation-on-the-heat-networks-investment-project-hnip.