- Funding boost: The Green Heat Network Fund will provide up to £195 million per year for heat‑network projects in England and Wales.
- Job creation and bill savings: Ministers said the scheme will help households move away from fossil‑fuel boilers, cut energy bills and create hundreds of skilled jobs.
- This is the first time Wales has been eligible for the fund, signalling the UK’s intent to drive heat decarbonisation across all devolved nations.
In a bid to accelerate the decarbonisation of home heating, the Department for Energy Security and Net Zero (DESNZ) has opened the Green Heat Network Fund (GHNF) to Welsh applicants.
The fund, launched in 2022 to support low‑carbon heat networks in England, provides capital grants for schemes that capture waste heat or use renewable energy. From this fiscal year, it will distribute up to £195 million annually across England and Wales.
Heat networks deliver hot water or steam from a central source – such as a geothermal well, heat pump array or combined‑heat‑and‑power plant – to multiple buildings via insulated pipes. They are seen as a cost‑effective alternative to individual gas boilers, capable of cutting emissions and lowering bills.
Announcing the extension, newly appointed energy minister Martin McCluskey described heat networks as a cornerstone of Britain’s long‑term energy security strategy.
“Expanding GHNF to Wales will help households and businesses ditch expensive fossil fuel boilers and switch to cleaner, low‑cost heating,” he said.
Secretary of state for Wales Jo Stevens emphasised the programme’s potential to create hundreds of skilled jobs in construction, engineering and operations. The fund’s eligibility criteria require applicants to demonstrate that projects deliver significant carbon savings and offer fair consumer protections.
Heat networks currently serve only about 2% of UK buildings, but the government wants to raise that share to 18% by 2050. Challenges include high up‑front capital costs, complex planning processes and fragmented regulation. The GHNF offers grants typically covering 30-40% of project costs, with the remainder financed through local authorities, developers and private investors.
Previous funding rounds supported schemes like the Old Oak & Park Royal development in London and Bristol’s City Leap partnership. Opening the fund to Wales could unlock schemes in cities like Cardiff and Swansea and support industrial clusters along the South Wales coast.
For UK companies, the move signals an emerging market opportunity. Engineering consultancies, pipe manufacturers, civil contractors and digital‑metering firms could all benefit from a pipeline of district‑heating projects. Energy suppliers might see new retail products emerge as heat becomes a regulated utility. Finance houses will be watching whether a stable policy environment encourages institutional investment.
Ultimately, expanding heat networks forms part of a broader strategy to reduce reliance on volatile gas imports, support net‑zero goals and protect consumers from price shocks.
