Public, private and third sector organisations in England can access capital grant funding to help new and existing heat networks move to low and zero carbon technologies, such as heat pumps, solar and geothermal energy.
Objectives of Scheme
The Government has announced a new Green Heat Network Fund (GHNF) to support low-carbon technologies like heat pumps, solar and geothermal energy. The scheme is supporting the rollout of the next generation of heat networks, enabling more towns and cities to take up this established technology.
Heat networks supply heat to buildings from a central source, avoiding the need for households and workplaces to have individual, energy-intensive heating solutions – such as gas boilers. These networks have the potential to be a cost-effective way of reducing carbon emissions from heating. They are the only way that larger-scale renewable and recovered heat sources – like the heat from large rivers and urban recovered heat, such as from the London Underground – can be utilised.
The scheme will incentivise new and existing heat networks in England to move away from high-carbon sources, as well as exploiting waste-heat opportunities while bringing down costs for consumers. Applications will only be supported if they include low-carbon heat-generating technologies, such as heat pumps, waste heat and energy from geothermal sources.
This capital grant programme aims to stimulate the growth of low-carbon heat networks that will support the delivery of the UK’s 2050 climate change commitments and expand the current heat networks supply chain. During the programme’s lifetime, an estimated 10.3Mt of total carbon savings are expected to be made by 2050; the equivalent of taking 4.5 million cars in England off the road for a year.
The scheme’s objectives are to:
- Achieve carbon savings and decreases in carbon intensity of heat supplied.
- Increase the total amount of low-carbon heat utilisation in heat networks (both retrofitted and new heat networks).
- Contribute towards market transformations across the investment landscape and supply chain that will better prepare the heat network sector for further decarbonisation.
Value Notes
The GHNF is a capital grant funding programme which is intended to help new and existing heat networks to move to low and zero carbon technologies. It has a total budget of £288 million.
Levels of support for individual projects will vary. Funding requests will typically span across multiple years. For example, a request for £5 million may be forecast to be spent over a two or three-year period. In a given financial year (April-March), applicants must have carried out works up to the value of the grant awarded within that given financial year.
GHNF grant funding can provide up to but not including 50% of the estimated eligible commercialisation and construction costs of the project. The GHNF will award no more than 4.5p of grant per 1kWh of heat delivered to customers over the first 15 years of operation. There will be an upper limit of £1 million for commercialisation support.
Applicants can apply for funding that could be drawn down in financial years 2025-2026 through to 2027-2028.
The scheme is open to public, private and third sector applicants in England that are responsible for the development of heating and cooling networks.
Applicants may be:
- Public sector organisations including NHS Trusts and Other Government Departments.
- Private sector organisations that are registered companies and submit annual accounts.
- Third sector organisations such as registered charities, community investment companies and other such organisations that are officially registered and submit annual accounts.
How To Apply
Round 9 is now open. It is scheduled to close on 11 April 2025.
Applicants will be required to submit detailed project documentation in addition to their completed application form, to provide evidence to support their application.
