Industry urges new model for heat networks

A new economic model for heat networks could help attract tens of billions of pounds of private capital to accelerate the sector’s development.

A report from Energy UK and the Heat Networks Industry Council, highlights that a £1bn government investment now would provide the certainty needed for a further £4bn of investment from the private sector by the end of the decade.

Heat networks currently meet around 3% of the country’s heating needs but government plans suggest this will rise to 20% over the next 25 years, or as high as 50% in some towns and cities.

The report said the introduction of a Regulated Asset Base (RAB), a funding model used for major infrastructure development in multiple sectors, would provide the revenue assurance needed to help close the cost gap to gas.

Adam Berman, Director of Policy and Advocacy at Energy UK, said: “Heat networks are an essential piece of the puzzle in a cleaner, more secure energy system.

“By supporting this sector to crowd in private investment in the coming years, and providing confidence and financial certainty beyond 2030, they can drive economic growth, support tens of thousands of skilled jobs across the UK and strengthen our energy security.”