Action urged to help heat networks compete with gas

The UK economy will face higher energy bills and lose £100 billion in investment unless the government makes heat networks cost-competitive with gas, a report has warned.

The report said the cost of heat from heat networks can undercut fossil fuels, but only with a clear and phased package of government support.

It sets out a roadmap including a level playing field on carbon pricing, targeted electricity discounts and increased grant funding to drive costs down.

A long-term Regulated Asset Base (RAB) model would then manage construction risk, reduce financing costs and make heat networks cheaper than gas for consumers.

Inaction would cost the electricity system £86 billion and block £100 billion in private investment that the sector is ready to deploy, added the report from ADE: Heat Networks.