Mar 26, 2019 Last Updated 1:03 PM, Mar 22, 2019

New BEIS funding can help the public sector reduce emissions and cut energy costs

Published in Talking Point
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Minesh Patel, Business Development Manager at Centrica Business Solutions, discusses a new Government fund for the development of heat networks across the UK and how using combined heat and power solutions to fuel them will be key to maximising their benefits.


The Department for Business, Energy & Industrial Strategy (BEIS) recently announced the launch of a £320m funding programme for heat networks across England and Wales.

The scheme, due to open for applications this autumn, will offer grants and loans to both the public and private sector for the installation of networks serving two or more buildings.

Heat networks, often described as ‘central heating for cities’, distribute energy efficiently to multiple recipients from a single source. Using specially insulated pipes, they can reduce heating costs by up to 30%.

The £320m investment marks the first real push from central Government to promote and, importantly, fund these initiatives. As BEIS cited in its announcement, there are already networks set up in the UK, including one in Sheffield that uses 12,000 tonnes of municipal waste each year to fuel the system.

The Government clearly sees these networks as a key part of its Clean Growth Strategy and has stated that they could cater for a quarter of the heat demand in industrial and public sector buildings by 2050.

This is certainly a positive move, especially for a public sector faced with huge challenges.

Pressure on all sides

The Government’s drive for efficiency savings across core services has created massive pressure for public sector organisations to reduce costs. At the same time, Brexit uncertainty raises the possibility of further budgetary constraints after the UK leaves the EU.

In the midst of this, is the continued campaign from Westminster to meet its internationally agreed climate change targets.

The culmination of all these factors is a need to bring down costs and be more efficient wherever possible. Energy use is always going to be a core part of this and, consequently, has moved to the top of the agenda for public sector organisations.

A report we produced in partnership with Edie, that surveyed sustainability, CSR and energy managers working in the public sector, found that more than two-thirds of respondents cited energy efficiency upgrades as one of their top three priorities for significant sustainability investment.

With all this considered, any initiative that helps public sector organisations to reduce emissions and, importantly, bring down energy costs should be welcomed. Funding heat networks certainly falls into this category.

Combining heat and power

Yet, these networks alone will only solve part of the problem. They are an excellent way of distributing heat and should be adopted wherever feasible. But they do nothing to make the actual production of energy more efficient.

Making the most of heat networks must mean more than simply connecting buildings to better piping. It is essential to ensure that the savings made through more efficient delivery are reflected in the way that it is generated in the first place.

Fundamental to this will be investigating how different energy solutions can be integrated to get the best results.

Combined heat and power (CHP) is a way of generating energy that will go hand-in-hand with a network designed for the more efficient delivery of heat.

CHP systems take the by-product of power generation and use this to satisfy other demands such as central heating or the need to warm up water.

An example of this in practice is our work with Gateshead Council. This project combines an energy centre with battery and solar panels to create an energy system for council buildings, local homes and businesses.

This system uses a 3MW battery to meet local electricity demand while waste heat from generation is recovered to provide hot water for heating via a 3km network of pipes.

If we apply this model to a heat network, it’s possible to see how the by-product of creating electricity through a CHP unit could be used to fuel the network. This means far less additional energy would be required to power it on top of the electricity needs of the buildings it is connected to.

Integration is key to success

The move by BEIS to fund heat networks is a positive step and the emissions and cost-saving benefits it will offer is certainly something that public sector organisations should look to take advantage of.

But, ultimately, reducing energy consumption needs to be viewed as an end-to-end process. Heat network funding is one vitally important part of the matrix of different measures needed for the UK to meet its energy targets. For it to be as successful as possible, it needs to be integrated into a system that strives for efficiency at every stage of the supply chain – from production to end-user.

Consolidating demand for electricity and heat through CHP will be the most effective way of ensuring that the positive impact of a heat network contributes to the best overall result.

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