Local authorities and other public sector bodies can start applying for new heat network funding from today.
The government has made up to £39m available via a pilot scheme, part of £320m earmarked for heat network development over the next five years.
If bids for are deemed successful, the funds will be made available by 31 March 2017. Applications must be submitted by end of November.
The wider heat networks investment project will then be opened up beyond the public sector.
The Association for Decentralised Energy, formerly the Combined Heat and Power Association, welcomed the launch of the programme.
“This pilot is a cornerstone for attracting up to £2 billion of capital investment for new heat network infrastructure,” said director Tim Rotheray.
“More than 150 local authorities and a number of private sector property developers are working to deliver these infrastructure investments and build a foundation for a long-term district heating market in the UK.”
The Energyst recently published a report on the key challenges around decarbonising heat at lowest cost. Heat networks are seen as part of the solution, but face hurdles in terms of capital cost, attractiveness to investors, bankability and the number of moving parts involved in developing and building projects.
Investors say local authorities need to invest more in project scoping as modelling in many cases is poor, leading to business case failure.
The new government funding could go some way towards helping address those gaps.
See details of the funding here.
Download The Heat Report, free of charge, here.