Government’s Warm Homes Plan confirms additional GHNF funding

The eagerly awaited Warm Homes Plan, published this week, has set out a clear plan for how the UK can host one of the fastest growing heat network markets in Europe across the next 10 years. The Government has confirmed their ambition for heat networks in England to double by 2035, providing at least 7% of England’s total heat demand.

What does the news mean for the Green Heat Network Fund? 

We are delighted to see confirmation of plans that the GHNF will receive £195 million per year of capital funding up to 2030, for the commercialisation and construction of heat networks. 

The GHNF will continue to deliver social value, encourage open procurement principles, supply chain development and job creation. We will promote knowledge transfer through the sharing of case studies like those highlighted in the plan to build capacity and encourage the sharing of best practice. 

The National Wealth Fund will play an important role alongside GHNF through the provision of finance options to strategically important projects.  

What does the plan mean for the wider heat network sector? 

The Plan confirms more details on the Government’s approach to heat network zoning, and a commitment to publish a national pipeline of district heating opportunities across England. Further guidance will be provided on the use of zoning powers alongside the plan. From 2030, carbon limits are expected to be introduced within zones to drive decarbonisation and raise operational efficiency.  

For the first time, district heating customers will now have access to new protections, and mandatory minimum technical standards are also set to be introduced. The forthcoming regulations commencing in 2026 will improve pricing transparency and give Ofgem powers to protect consumers. 

It is great to see that more support is also being allocated to the Heat Network Efficiency Scheme (HNES), which supports efficiency improvements to existing district and communal heat networks.  

The Government has committed to exploring all options to enable green heat networks to offer competitive heat prices with an anticipated consultation on reducing the UK’s electricity costs.