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Posted by Ian Allan

Thursday 20th April, 2017

What you need to know about HNDU funding

Posted by Ian Allan

Earlier this month, nine local authorities across England and Wales received a total of £24 million capital funding to support the first pilot phase of building of heat network projects. With more funding set to be made available; are you eligible for funding? Our blog looks at what you need to know about the HNDU funding, and how it can help future heat network projects.


What is HNDU funding?

Established in 2013, HNDU provides grant funding and guidance to local authorities in England and Wales. It is part of and directly funded by the Department for Business, Energy and Industrial Strategy (BEIS) and designed to help progress the development stages of heat networks projects.

HNDU supports projects through the early stages of a heat network, such as heat mapping, energy master planning, feasibility study, and project development or commercialisation phases of a project.

Why was HNDU introduced?

The unit was devised to help support the strategy to decarbonise heat by 2020, with a core purpose to support heat network projects during the development stages of a scheme. Heat networks can contribute to local authorities’ targets and aspirations for carbon emissions reduction, fuel poverty, cost reduction, regeneration, local jobs and growth.

Heat networks form an important role to reduce carbon emissions and cut heating bills for domestic and commercial buildings. It provides a unique opportunity to exploit larger scale – and often lower cost – renewable and recovered heat sources that otherwise would not be used, such as heat from biomass, the London Underground, water and in some cases wind.

What is the pilot phase?

It was decided that before distributing the full amount of funding; The Heat Network Investment Project (HNIP) would initially run a pilot from October 2016 to March 2017. The pilot was designed to help shape the design and delivery of the main HNIP funding scheme which BEIS aims to launch by the end of 2017.

Who does it apply to?

The funding is open to local authority projects only; however it is likely that it will become available to a wider set of applicants once the full amount is launched at the end of 2017.

Depending of the stage and size of the scheme, local authorities can receive grants of up to 67% of the estimated costs, however they will need to have secured at least 33% in matched funding elsewhere. To date, HNDU has arranged support to over 200 unique heat networks projects across 131 local authorities in England and Wales, including over £14 million of grant funding in the first six rounds.

How it works/what it covers

The application process consists of a pre-qualification and a full application; if successful, a formal review with the Heat Networks Grant Appraisal Panel will take place. The full application process should take around 6-8 weeks, with HNDU informing the applicant as early as possible. Applications are still open for applications for Round 7 until December 2017.

Key takeaways

  • Heat Networks Delivery Unit (HNDU) was set up to help support the strategy to decarbonise heat by 2020
  • HNDU funding can provide local authorities with support and guidance for the development stages of a heat network
  • To date, over 200 unique heat networks projects across 131 local authorities in England and Wales have secured funding
  • Round 7 of the funding is still open until December 2017

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Ian Allan

Head of Market Strategy

Areas of expertise:

• Industry challenges and issues • Heat Network Regulations • Smart metering

• Innovation in heat networks • Tariff setting • Energy prepayment • Digital innovation

• Data management • Automated Meter Reading (AMR) • Heat Interface Units

• International district heating • Compliance & best practice standards

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