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What is an open access heat network?

Posted by Ian Allan

Heat Network Investment Programme: Applications now open

Posted by Ian Allan

The heat networks investment programme has widened its net and put in place a strategic alliance set to support heat networks in England and Wales. Additionally, it’s now available to the private sector, so what do you need to know about it and how will it shape future heat network projects in the UK?

The Heat Networks Investment Programme (HNIP) projects currently provides heat to approximately 5,000 domestic customers and 50 non-domestic buildings. Previously available just for local authorities; this week it has opened its doors to the private sector, making £320 million available in grants and loans with other mechanisms to lever in up to £1 billion of wider investment.

The aims and objectives of HNIP:

To create the conditions for a self-sustaining heat network market that contributes to the decarbonisation of the UK energy system at the lowest cost to the economy by 2050.

The objectives:

Simply put, to increase the volume of strategic, optimised and low carbon heat networks; improving the quality and building the capacity of project sponsors to develop a supply chain of heat networks of the right type and quality.

Introducing the Triple Point alliance

In charge of the HNIP roll out, the Department of Business Energy and Industrial Strategy (BEIS) has assigned several professional firms to deliver a wide range of infrastructure projects called the Triple Point Heat Networks Investment Management. The companies involved include; AECOM, Gemserv, BDO, Ecuity, Amberside, and Lux Nova Partners. Each company holds a specific role to the plan from technical analysis and assessment, to customer engagement and legal assessment. 

Who is eligible?

Applicants can be any type of public, private or third sector organisation in England and Wales apart from central government departments. They can be either heat network sponsors (the entity that initiates a heat network project) and/or owners who may also have a role in operation. Each project must be sized at 2GWh and above each year; roughly equating to heating 500 homes and must have the potential to expand and decarbonise at a later date. Other prerequisites are that the scheme should use a low carbon heat source and deliver carbon savings.

How does it work?

The application process is split into two sections; firstly the eligibility check and secondly, the full application. Eligibility will run through checks to make sure that the project meets the above criteria, with full application looking at the more ‘nitty gritty’, ins and outs of the proposed scheme. The Triple Point group are offering personalised support to both parts, and it is worth getting in touch with them to make sure that everything is covered.

What’s available?

There are three funding mechanisms available to applicants:

  1. Grants (specifically for the commercialisation phase of the build)
  2. Corporate loans
  3. Project loans (for the construction phase)

Applicants can apply for a grant, a loan or a combination of the two. Look out for our helpful guides and infographics that will explore this subject even more – coming soon!

The first funding round has now opened, with the deadline closing on the 6th March for the first application phase, and the 5th April 2019 for the full application. To find out more about how you can apply, click here.

How useful will HNIP be?

There is over £320 million of funding available, which is likely to leverage around £1 billion of private sector and other investment funding. At Switch2, we see it a great step forward in the funding being made available to private sector; the project has created a route to market for innovative energy and clearly demonstrates a key objective of the clean growth strategy to deliver technologies that lower bills, cut carbon and improve the quality of life for communities. We are also very excited to see the opportunities come into fruition in summer time, thanks to the first round!

Key takeaways

  • There is £320 million of grants and loans to be organised with an estimated £1 billion of wider investment available for heat network projects across
  • The HNIP funding is now available for public, private or third sector organisations in England and Wales
  • It is open for schemes looking to set up innovative, projects that are sized at 2GWh and above each year
  • The first deadline to the application process closes on the 6th March 2019, with the full application deadline being 5th April 2019

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Ian Allan

Head of Market Strategy

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