The shift away from fossil fuels needs to accelerate if the UK is to reach its ambitious target of net zero by 2050. To get there, we need to completely rethink how our society functions, including how we heat our homes – an often overlooked, but crucial part of the energy transition writes Jenny Curtis, Managing Director at Vattenfall Heat UK
Vattenfall is already working to deliver low carbon heat to homes and businesses in Bristol, London and Midlothian, on the outskirts of Edinburgh. By 2030, we aim for our Heat Business in the UK to invest £1 billion in building heat networks and to partner with five to eight of the UK’s leading low carbon cities to deliver city-wide heat networks.
Why heat networks?
The heating sector in the UK accounts for almost one third of the UK’s annual carbon emissions. For the UK to reach net zero by 2050, heat networks need to grow from supplying 3% of the UK’s heating to 20%1. This means rapid, at scale growth of this tried and tested technology, which has been heating homes in Europe for more than 100 years. In Sweden, for example, half of all heating is already provided by heat networks.
Heat networks distribute heat generated in a centralised location via a network of insulated, water filled pipes to domestic and commercial buildings for space heating and hot water. Heat networks can be supplied with heat from a variety of sources, including low carbon sources and heat captured from processes that would otherwise be wasted. Heat is transferred into individual buildings of any size via a heat exchanger at which point the heat consumption is metered.
The heat we need to heat our homes is all around us, in abundance in our towns and cities and most of it is wasted. Whether it’s from sewage plants, data centres or waste management facilities, it can all be used for heat networks to create warm homes and businesses and build local energy resilience.
Heat networks are a more efficient way of delivering heat in high density areas. For example, maintaining one large, central heat pump is more efficient and cost effective than maintaining multiple, smaller individual heat pumps or gas boilers.
A supportive policy environment
Half of all UK buildings are in areas suitable for heat networks, which need to be deployed rapidly and at scale. The opportunity for private investment is huge, at an estimated £60-£80bn by 2050, but enabling this requires current policy and regulatory blockers to be addressed. Significant progress can be achieved quickly through bringing forward the provisions in the Energy Act 2023, particularly on heat network zoning. A failure to address barriers at pace will lead to private finance moving elsewhere, and a reduced level of opportunity for the sector.
Heat Network Zones are the first step towards Local Area Energy Plans, which will play an important role in the UK’s goal to decarbonise heat in buildings. Without heat zoning, developers face uncertainty about the proportion of consumers that will connect to projects. Successfully addressing this biggest blocker to private finance will provide the certainty to investors and unlock a wealth of investments in projects, supporting the development of the sector.
Similar to other core infrastructure investments, heat network projects have long term contracted revenues and increasingly appeal to long term investors. A stronger government steer on policy goals for heat networks would improve investor confidence. Government could also make an early decision on not progressing hydrogen for domestic heating on a large scale, and instead indicate that heat networks will play a major role alongside other forms of electrified heat.
The benefits of heat networks
Connecting to a heat network offers multiple benefits including the reduction of carbon emissions in operations, improved air quality in the local community, greater resilience in energy supply, and future proofed heating operations. For example, alongside our partners Ameresco, we’re committed to delivering £61.5 million in social value in Bristol as we build out the city’s heat network. This includes local supply chain spending, job creation, and funding initiatives.
It is estimated that the heat network sector could create between 20,000 – 35,0002 direct jobs. These jobs will be needed as the industry develops to meet the government target for heat networks to supply 20%1 of the UK’s heating by 2050. To address the skills gap, the heat network sector is proactively seeking ways to accelerate the development of the skills and workforce needed by embedding social value commitments into heat network projects and collaborating on industry-wide initiatives. For example, in Midlothian just south of Edinburgh we are creating a career pathway for the heat networks sector, partnering with local organisations and engaging with schools.
We must prepare for a future without fossil fuels. In practice, this means switching to a heating system that does not rely on any one specific fuel source, and building homes that will not need to be continuously retrofitted with new heating systems. Heat networks are flexible, they enable the offtake of heat from multiple sources and those sources can change as technologies develop. Making the right decisions about heating now will deliver safe, reliable, and fairly priced systems for future generations.
