Green Heat Network Fund – GHNF

BEIS has consulted on the proposed new Green Heat Network Fund - £270m to be spent in three years from April 2022.

The Green Heat Network Fund is a proposed Government scheme with the aim of incentivising new and existing heat networks to use low-carbon heat sources.

There are currently over 14,000 heat networks in the UK, providing heating and hot water to some 480,000 consumers.

Heat networks currently provide just 2% of UK heat demand (a percentage which has not increased in 20 years) and the Climate Change Committee estimated in 2015 that with Government support, heat networks could provide 18% of heat demand by 2050 in a least-cost pathway to meeting lower carbon targets.

BEIS says that the GHNF aims to:

  • achieve carbon savings and decreases in carbon intensity of heat supplied
  • increase the total amount of low-carbon heat utilisation in heat networks (both retrofitted and new heat networks)
  • help prepare the market for future low-carbon regulation and the Future Homes Standard

The Consultation response was expected by 29 January. The consultations questions were many, long, complex and technical. The Consultation did not address the principal barrier to the move toward the Electrification of Heat in the UK.

The Treasury inhibits the use of Low Carbon heating in the UK

The Consultation does not seem to be aware that the chief barrier to the decarbonisation of heat in the UK, whether via heat networks or directly, is the Treasury.

The Treasury imposes taxes and "environmental levies" that increase the price of electricity by 28%1 for domestic use. This not only inhibits the uptake of heat pumps, but also prevents the development of a heat pump supply chain in the UK.

The equivalent uplift for gas is just 7%.1

 

1Ofgem domestic energy prices - January 2021

 

See also Sustainable energy

See also Renewable Heat Incentive

Ground Source Heat Pump Association

ICAX is a member of BSRIA