This article was written by Casey Cole, CEO at Guru Systems.

Last week, the Department for Business, Energy & Industrial Strategy (BEIS) published the long awaited consultation on heat network zoning. This consultation is the first step in the government’s commitment to implement heat network zoning in England by 2025.

This is a big deal, because:

  • Until now, the planning system is the only lever we’ve had to drive the growth of heat networks, which means heat networks have almost exclusively been installed in new build schemes, with no incentive to connect to each other.
  • Most homes that exist today will still be here in 2050, and if heat networks are to deliver 20% of heat demand (as the Committee on Climate Change expect), then new build growth is going to be insufficient to achieve our decarbonisation targets
  • Instead, retrofitting new heat networks onto existing buildings will be necessary
  • Heat network zones, implemented correctly, are the best mechanism we have to encourage existing buildings to connect to new heat networks

As such, this consultation may be one of the best chances we have to drive the growth of our industry.

Heat networks have a huge part to play in achieving net-zero

In the UK, heat in buildings is responsible for 23 % of greenhouse gas emissions. The Climate Change Act commits the UK to reducing greenhouse gas emissions by at least 100 % of 1990 levels by 2050 – or meet what’s called ‘net-zero’. The government accepts in the heat network zoning consultation that, to achieve net zero, virtually all emissions from heat in buildings and industry must be eliminated.

Most people agree that heat networks will have a huge part to play in the decarbonisation of heat. The Committee on Climate Change (CCC) estimates that around 18% of heat in buildings will need to be supplied by heat networks by 2050 if we are to meet our carbon targets cost effectively.

Heat networks are uniquely able to unlock large-scale renewable and recovered heat sources such as waste heat from industry and heat from rivers and mines. And, unlike individual heat pumps, heat networks can mean less pressure on our electricity networks.

New build developments are only part of the story

The key detail to note here is just how small the ‘new-build’ proportion of this decarbonisation story is. Until now, most heat network projects have been for the new-build sector. 

However, dwelling projections using government household projections and ONS population projections suggest at least 80% of homes in 2050 have already been built.

What’s very clear is that while heat networks are one of the best routes to low carbon heat that we have, the industry is collectively going to have to deliver far more retrofit projects – and start as soon as possible.

Retrofit projects here describe a situation where buildings with an existing heating system (for example a building where each home is heated by an individual gas boiler) has a heat network installed to replace that existing heating system. Pipework is put in, and the building is either connected to an existing nearby heat network, or a new plant room or energy centre is created.

While this kind of project is rare today, according to Government research between three and eight million dwellings, as well as a major share of commercial and public buildings, could be connected to heat networks at reasonable cost.

Zoning will drive the growth of retrofit projects

Despite heat networks being a proven route to carbon reductions, the upfront costs associated with installing a heat network onto an existing building is a barrier to uptake. Existing legislation, while supportive of heat networks, has so far failed to go far enough. 

Of the countries in the UK, only Scotland has legislated to encourage new connections from existing buildings. The Heat Networks Scotland Bill requires all public sector building owners to assess their buildings to check if they’re suitable to connect to a heat network, and aims to establish heat network zones across the country.

Zoning is the process of identifying areas of land upon which specific policies, laws, regulations or powers apply. Typically, zoning – or the identification of ‘areas’ – has been used as part of the planning system to prevent or allow specific purposes for land. In London, this principle has led to the introduction of Heat Network Priority Areas – rules that require major development proposals to include a communal low temperature heating system, either by connecting to local existing or planned heat networks, or where this is not possible, using a range of low carbon heat sources to power a new network. 

But unlike in Scotland, London’s Heat Network Priority Areas only affect new developments. To encourage local authorities, housing associations and private developers to connect existing buildings to heat networks, we will need to go further. For zoning to successfully encourage existing buildings onto heat networks, policy should specify an obligation to connect. 

The heat networks industry should use the BEIS consultation on zoning to boost retrofit projects

Last week’s consultation is the first step in overcoming the retrofit challenge. BEIS expects that “within a zone, certain types of building must connect to their local heat network in a given timeframe”.

Guru Systems will be completing this consultation with retrofit heat networks in mind. We encourage the rest of the industry to also engage. It may be one of the best chances we have to drive the growth of our industry.