On 23 September 2026, the Department for Energy Security and Net Zero announced £90 million for new heat networks and upgrades to existing systems, saying the package should support cheaper, lower-carbon heating for more than 750,000 homes. The department said the funded projects together are expected to create more than 2,000 jobs. (gov.uk) The announcement is notable because it combines two aims that are often handled separately: expanding low-carbon heat infrastructure and improving performance on older communal systems. DESNZ’s wider heat networks programme says government support covers both new development and performance improvements to operational networks. (gov.uk)
Heat networks distribute heat from a central source to multiple buildings through pipework, avoiding the need for individual boilers or electric heaters in every property. GOV.UK says they can draw on local low-carbon or waste heat sources, including factories, the ground and rivers, and are often the lowest-cost low-carbon option in dense urban areas. (gov.uk) The funding routes matter. GOV.UK describes the Green Heat Network Fund as a capital grant fund for low-carbon heat network development in England, while the Heat Network Efficiency Scheme provides grant support for performance improvements to existing district and communal heating projects. That split helps explain why this package spans large new infrastructure in London and smaller remedial works for residents already connected to older networks. (gov.uk)
DESNZ’s largest single award in this round is £41 million for a strategic London scheme under and alongside the River Thames. The department said the project could supply 650,000 homes with clean heat, with potential to benefit more than one million residents, by moving hot water along a 25-kilometre route using electric barges on the Thames and a purpose-built tunnel beneath the river. (gov.uk) The same release states that the Thames proposal remains subject to planning consent and that funding decisions are separate from the planning process. DESNZ also described it as the first UK scheme of its type, pointing to long-running systems in Copenhagen, Amsterdam, Vienna and Berlin, and said it could help unlock around £5 billion of investment in London heat networks while supporting skilled work in tunnelling, engineering and river transport. (gov.uk)
Away from the Thames scheme, DESNZ announced £9.7 million for Bradford to extend the city’s original heat network, with 255 homes, a hospital and seven schools and colleges due to benefit. Other awards include £3.9 million for Solihull, £11.5 million for Bexley and Greenwich, where government says a fully built network could serve up to 100,000 homes, and £11.4 million for a Marble Arch system using water-source heat pumps linked to the London Chalk Aquifer. DESNZ said the Marble Arch project should create 200 jobs. (gov.uk) Taken together, the awards show the department backing several delivery models at once: extensions to civic networks, large urban strategic systems and mixed-use commercial and residential schemes. DESNZ’s programme page says heat networks can serve public buildings, hospitals, universities, shops, offices and homes from shared infrastructure, which matches the range of projects announced in this round. (gov.uk)
A separate £13.3 million has been committed to upgrade 76 inefficient heat networks across England and Wales. According to DESNZ, the works will include replacing leaking pipes, insulating pipework to reduce heat loss and changing interface units in homes so residents have better control of their heating. (gov.uk) The government identified several early examples: £1 million for 130 residents in Cornwall Court, Gorton, and Cundiff Court, Levenshulme; £5.5 million for systems serving 1,143 residents at Prospect House in Bermondsey and the Packington Estate in Islington; and £374,900 for outdated systems at Eschol Court in Newport and Victoria Court in Abergavenny, serving 62 residents. DESNZ is therefore presenting repair funding as both an efficiency measure and a consumer service intervention. (gov.uk)
The consumer context has changed since the start of 2026. GOV.UK states that the Heat Networks (Market Framework) (Great Britain) Regulations 2026 came into force on 27 January 2026, with Ofgem taking on the role of regulator and all heat networks in Great Britain required to register with the Energy Ombudsman redress scheme. (gov.uk) Ofgem says the new regime covers billing transparency, customer service standards, complaints handling, protections for vulnerable consumers and security of supply. The regulator’s stated aim is to improve outcomes so that heat network users receive fair pricing, more reliable supply and clearer bills. In practice, that means this funding round sits within a more formal consumer protection framework than earlier heat network programmes did. (ofgem.gov.uk)
DESNZ used Southern Housing Group’s Vega Building in Brighton as its case study for upgrade benefits. The department said a £200,000 Heat Network Efficiency Scheme grant funded engine room improvements, better pipe insulation, thermostatic radiator valves and heat interface units for 40 homes; after the work, residents were reported to be saving £438 a year on heating and hot water, with gas use down by 50 per cent from a system that had been operating at 35 per cent efficiency. (gov.uk) For local authorities, housing providers and project sponsors, the message is that public support remains available for both expansion and remedial work, but delivery conditions are tighter. New infrastructure still needs planning consent, existing systems now sit under stronger consumer regulation, and the public test for the programme will be whether lower losses, better controls and more predictable bills are visible in day-to-day service rather than only in funding announcements. (gov.uk)