OREANDA-NEWS. The funding, provided by the Department for Business, Energy and Industrial Strategy (BEIS), aims to promote the development of a self-sustaining heat network sector. In the pilot phase £39 million is available with further funding rounds planned to 2020.

The announcement of the £320 million BEIS fund is a significant incentive for project developers, which SSE believes should signal a new era in public support mechanisms for this vital component of the future GB energy landscape.

Mike Reynolds, SSE’s Director of Heat, commended the announcement saying: “The launch of the HNIP fund is well timed and comes at a crucial juncture in the development of UK heat networks where the market is predicted to grow between £2bn and £3.5bn in the next five years. In much of Europe heat networks are common place but they have all been developed with strong policy support and government investment so this bold position from BEIS is good to see. We are already seeing far greater penetration of distributed generation with businesses and the public sector alike looking to take more control of their energy supply arrangement, including bringing generation closer to point of consumption.

“SSE’s own Heat Networks business has undergone significant growth in recent years, doubling its team in the past 12 months to meet demand and anticipated expansion and with plans to continue this growth into 2017. We’re working with our customers to build a strong portfolio of heat network projects designed with a commercially flexible long term partnership approach and bringing the benefits of SSE’s direct investment and backing.

“The funding from BEIS is an important step in creating the right conditions for further heat networks to come to market and by bridging financial gaps and increasing the number of economically feasible projects. We now believe more needs to be done in parallel to encourage sustained growth in the sector and bring appropriate quality assurance to customers. Whilst good progress has been made in enabling areas with better guidance: for example the introduction of CIBSE design codes, and customer protection through the Heat Trust; progressive policy intervention should go hand-in-hand with this funding stream. It is important to ensure that we continue to remove barriers to entry to the market for new suppliers; that we enable competition; that we bring good quality assurance; and, critically, that we address the relatively untouched retrofit market as well as new build.”