The PipeCo: an alternate approach to financing heat networks

Tags: finance | gas | heat network | district heating | Carbon Trust

District heating is booming in the UK, but to pose a serious alternative to the gas network a different funding model is needed, according to Ian Manders (consultant to Danish Embassy) and Tanja Groth (The Carbon Trust).

The UK Chancellor’s Autumn Statement in November 2015 dedicated over £300 million of funding for 200 heat networks which are expected to generate enough heat to supply the equivalent of over 400,000 homes and leverage £2 billion of private capital investment.

While the new government funding is welcome, much more must be done to make heat networks a viable alternative to the UK default of individual boilers fed by the gas distribution network. Unfortunately, the history of district heating in the UK has been a cycle of mini-boom and bust as various government grant schemes were initiated and then withdrawn. In our present political climate, to achieve district heating at scale a new financial model is required which is viable without long-term government handouts.

See The Carbon Trust Viewpoint article ...