The UK government’s Heat Network Efficiency Scheme (HNES) is designed to improve the performance of existing district and communal heat networks and maximise carbon savings. The scheme provides grant funding to address sub-optimal performance, to reduce consumer heating costs and carbon emissions.
What is HNES?
HNES is a £77 million grant programme that supports improvements to heat networks in England and Wales, to make these networks more efficient, reliable, and cost-effective for both operators and consumers.
The scheme offers two types of grant funding:
- Revenue Grants to fund optimisation studies. The grants cover up to 100% of the cost for external third-party experts to assess network performance, identify the root causes of inefficiency, and recommend a package of targeted improvement measures. This is a crucial first step for operators seeking to understand their network’s full potential.
- Capital Grants provide part-funding (up to 50% of eligible costs) for the physical installation of the improvement measures identified in the optimisation study. This could include upgrades to energy centres, pipework replacements, new controls, or advanced metering systems.
Key Objectives of the Scheme
HNES is driven by three clear objectives that directly align with the decarbonisation and cost-saving goals of the UK’s energy sector:
- Reduce Carbon Emissions: By improving network efficiency, the scheme helps lower the amount of energy required to provide heat, leading to a direct reduction in carbon emissions.
- Reduce Customer Detriment: A major focus of HNES is to support financially vulnerable customers who are disproportionately affected by rising energy costs. By improving efficiency and reducing heat losses, the scheme helps lower heating bills and enhance service reliability.
- Prepare for Regulation: HNES is helping to prepare the heat network market for forthcoming sector regulation and technical standards by encouraging best practices and performance improvements.
Who Can Apply for HNES?
The HNES is open to a range of public, private, and third-sector organisations in England and Wales that are responsible for operating or managing existing district or communal heating systems. This includes:
- Public sector organisations, such as local authorities, NHS trusts, and universities.
- Private sector companies, including those that are registered and submit annual accounts.
- Third-sector organisations, such as registered charities.
Applicants must be legal entities with the authority to make investment decisions for the heat network they are managing.
How to Apply for HNES
The application process for HNES is competitive and runs across multiple funding rounds. To apply, interested parties should follow these steps:
- Request an Application Form: Contact the HNES team at hnes@gemserv.com to request the official application form.
- Complete the Application: The application requires detailed information about the existing heating network, including network performance data and a proposed project plan. You will need to specify whether you are applying for a revenue or capital grant.
- Submit the Form: The completed application must be submitted by the deadline for the specific funding round. The scheme’s website provides up-to-date information on upcoming deadlines.
For capital grants, a robust optimisation study is often a prerequisite, which can be funded through a revenue grant application.
Sustainable Energy – Your Partner in Optimising Existing Heat Networks
At Sustainable Energy, our expertise in delivering market-leading low-carbon energy networks and providing technical advice for the remediation of existing under-performing networks positions us perfectly to assist with HNES applications. Our services span the entire project lifecycle, including grant application, initial review and baselining of network performance, identification of remediation requirements, detailed design of system upgrades, and technical advisor through installation and recommissioning.
For organisations considering an HNES application, our team can provide the independent expert technical advice needed to develop a successful funding bid. We can undertake the essential optimisation studies required for revenue grants, identifying where performance can be improved. Our expertise ensures that any recommended capital improvements are robust, reliable, and deliver maximum efficiency gains. We are committed to helping you achieve your decarbonisation and energy efficiency targets, leveraging our unique blend of technical and commercial knowledge.
Sustainable Energy has a proven track record of success with HNES:
We recently supported Newport City Homes (NCH) to secure a substantial £3.7m HNES grant to upgrade their Duffryn Heat Network. Our role was pivotal in delivering a new 3.3km buried heat network, the largest of its kind in Wales. We developed the detailed design and specification for the new network and helped NCH to procure an installation contractor. As lead technical adviser during the installation and commissioning stages, we ensured the completed installation was delivered to the required quality and specification before being handed over to the NCH on completion in May 2024. This new network, which replaces ageing, inefficient pipework, will provide low-carbon heat to around 970 homes for the next 50 years, ensuring long-term cost efficiency and significant carbon reductions for the estate.
Read more about this project.
Conclusion
The Heat Network Efficiency Scheme represents a significant opportunity for heat network operators in England and Wales to secure funding for vital upgrades. By taking advantage of this scheme, you can not only reduce operational costs and carbon emissions but also improve the quality of service for your customers.
For more information on how we can support your HNES application and help you deliver a more efficient and sustainable heat network, please contact us.