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Posted by Ian Allan

Pilot Scheme for Heat Network Investment Project

Posted by Ian Allan

Earlier this week the announcement of the pilot project for the heat networks investment programme was released.


The pilot project is the beginning of the public spend of the £320 million funds for heat networks that will be divided up throughout the next 5 years. This funding is expected to draw in a further £2billion of additional private capital investment and will lead to the construction of hundreds of heat networks in urban and rural areas of England and Wales. It is anticipated that these new heat networks will generate heat to supply the equivalent of over 400,000 homes.

Why a pilot project?

Over 2016, BEIS sought the opinions from current and potential heat network sponsors, investors, supply chain and any other stakeholders with a view on how best to use the capital support funding. And thus it was decided that the first round of funding will be distributed to only one pilot scheme, in order to track its progress thoroughly and learn for improvements. BEIS understands the importance of monitoring the impact of a project to determine if we are delivering the intended aims of the project, therefore independent evaluations will be sought after.

What is the plan for the pilot project?

The consultation sought views on what construction costs should be eligible for funding and whether funding for commercialisation transaction costs (technical, financial and contractual work prior to build) should be offered and, if so, via which funding mechanisms. The bid for the pilot project is now open to local authorities and other public sector bodies to apply throughout this autumn. The budget for the pilot scheme has been set at £39million and will be split across two financial years (2016/17 and 2017/18).

For those wishing to apply for pilot funding, please click here for further details.

Updates to the heat network regs

Ian Allan

Head of Market Strategy

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