The UK government has announced a £40.6 million package aimed at lowering heating costs for thousands of households by upgrading older heat networks and investing in new low-carbon energy systems across England and Wales.
The funding, announced on 20 May as part of the government's 'Warm Homes Plan', is intended to improve inefficient communal heating systems serving homes, hospitals, charities and public buildings. Ministers said the investment would help reduce energy bills, tackle fuel poverty and lessen reliance on volatile international gas markets.
More than 10,000 residents are expected to benefit from the upgrades, which include replacing leaking pipes, improving insulation and installing modern heating controls to help households better manage energy use. Officials said the programme also supports its wider target of achieving clean power across the UK by 2030.
Funding To Upgrade Older Heat Networks
A total of £15.6 million has been allocated through the Heat Network Efficiency Scheme to improve 94 existing heat networks across England and Wales.
According to the Department for Energy Security and Net Zero, the upgrades will focus on improving older systems that currently lose heat through ageing infrastructure and inefficient pipework.
Projects include £1.2 million to modernise heating systems in three 1960s residential tower blocks in Salford, £2.1 million for upgrades to five heat networks serving 484 residents in Solihull, and a further £2.1 million to improve two heat networks in Camden, north London.
Since Labour came to power in July 2024, the energy price cap has increased multiple times. And it’s now being reported that energy bills will surge by £209 in July. Keir Starmer promised this wouldn’t happen. He promised a price freeze on energy bills. Another lie. pic.twitter.com/ETNXwDqvMp
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The government said replacing outdated interface units inside homes would also allow residents greater control over heating and hot water usage, helping reduce long-term household energy costs.
Energy Consumers Minister Martin McCluskey said the conflict in the Middle East had highlighted the risks associated with dependence on fossil fuels and international gas prices.
'Heat networks will play a crucial role in lowering bills and strengthening energy security,' he said.
Bristol, Rochdale And London Receive Major Investment
An additional £25 million will be distributed through the Green Heat Network Fund to support four new low-carbon heating projects across England.
In Bristol, £13.5 million has been allocated to expand the Bristol City Leap heat network, which will use large-scale heat pumps to provide fossil-fuel-free heating to homes and businesses. The government said the project is expected to create more than 1,000 jobs, apprenticeships and work placements.
Rochdale will receive £1 million to help develop a system that captures waste heat from the town's sewer network to provide heating for schools, colleges, Rochdale Infirmary, businesses and social housing.
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Meanwhile, £8.6 million has been awarded to the next phase of the King's Cross Heating and Cooling Network in London, which already supplies more than 1,700 homes and 44 buildings using heat pump technology.
A further £2.2 million will support a new heat network in Atherstone, Warwickshire, using waste heat from a local energy-from-waste facility to heat around 1,700 homes.
Heat Network Funding Forms Part Of Wider Energy Plan
The funding follows the government's earlier commitment to continue supporting heat network projects through to 2029 as part of its wider 'Warm Homes Plan'.
Heat networks use a central energy source to heat multiple buildings and are increasingly being promoted by ministers as a lower-cost alternative to traditional gas heating systems. Officials said expanding and modernising the networks would help reduce long-term energy waste while improving energy efficiency in homes, hospitals and public buildings.
The government has also linked the investment to broader efforts to reduce reliance on international gas markets following recent volatility in global energy prices.
