Warm Homes Plan — Insight 02: Heat networks and zoning: what happens when your estate is inside the map

“Heat networks and zoning: what happens if your building is within a zone?”

The Government’s Warm Homes Plan places greater focus on heat networks and heat network zoning.   

Heat networks are no longer seen as a specialist solution for a small number of city-centre developments. They are expected to play an increasingly important role in moving away from fossil fuels, particularly in areas where heating individual buildings can be difficult or expensive.  This could include housing estates, blocks of flats, hospitals, university campuses and mixed-use developments.

For property owners, landlords and developers, this raises an important question:

If your building is within a future heat network zone, should you still invest in your own heating system, or would it be better wait and connect to the heat network?

There is no single answer since it will depend on the building, its location and the timing of any future network.

However, all landlords would consider the issues before committing to significant investment in heating or energy systems.

What is a heat network?

A heat network is a shared heating system that supplies heat to several buildings.

Instead of each property having its own boiler or heat pump, heat is produced centrally and distributed through insulated pipes to the buildings connected to the network.  The heat could come from sources such as large heat pumps, waste heat or geothermal energy.

You do not need to understand the technical differences between different types of heat network to understand the basic principle:

One shared energy system can provide heating to many buildings.

In some urban areas, this can be more practical than installing a separate low-carbon heating system in every building.

Why are heat networks becoming more important?

Moving existing buildings away from fossil fuels is one of the biggest challenges in reducing carbon emissions.  Some buildings are relatively straightforward to upgrade. Others are much more complicated. 

For example, consider an older block of flats or a large housing estate. There may be limited space for new equipment, planning restrictions, electrical capacity issues, different property owners or leaseholder approvals to consider.

A shared heating system can sometimes help overcome some of these challenges.

That does not mean a heat network will always be the best solution.

Some buildings will be better suited to their own heat pump or another heating system. The important thing is to consider the options as part of a wider, long-term strategy rather than assuming the same solution will work for every property.

What is heat network zoning?

Heat network zoning is the process of identifying areas where a heat network could be an effective way of providing lower-carbon heating.  In simple terms, the Government is looking at where shared heating systems could make the most sense and where there is enough demand for a network to be viable. This means heat networks are increasingly being considered as part of the wider energy infrastructure of an area, rather than simply as another heating technology.  Being inside a heat network zone does not automatically mean that a property must connect to a network.  However, being in or near a zone could influence future decisions, particularly for larger buildings, new developments and properties that already have communal heating systems.

For property owners and developers, the important issue is therefore investment planning.

What does this mean for property owners and landlords?

Before replacing major heating equipment or committing to a new energy strategy, landlords should consider the wider environment and neighbouring properties.

For example, if a boiler or communal heating system needs replacing, the immediate solution may be to install new equipment.

But what if a heat network is expected to become available in the area a few years later?

In that situation, it may be worth considering whether the investment you make today will still make sense over the longer term.

Some useful questions to ask are:

1. Is the building within, or close to, a proposed heat network zone?
2. Is major heating or plant replacement likely to be needed within the next five years?
3. Could the building connect to a future heat network without major alterations?
4. What would the likely costs of connection and ongoing supply be?
5. Could a planned investment become unnecessary or less valuable if a network is developed?
6. How would different options affect tenants, residents, service charges and long-term running costs?

These are not just engineering questions.  They can also affect planning, asset management, funding, property value and resident engagement.

What does this mean for homeowners?

For most homeowners, there is unlikely to be a major change in the short term.

The bigger implications are likely to be for residents and homeowners in larger residential buildings and estates with communal heating systems, where decisions may be made by freeholders, management companies, housing providers or estate owners.

For homeowners and residents within blocks of flats or housing estates, the key issues are likely to be practical:

1. Will the heating be reliable?
2. How much will it cost to run?
3. How will charges be calculated?
4. Who will be responsible for maintaining the system?
5. Will the system remain affordable in the long term?
6. The technical details matter, but cost, reliability and transparency are likely to matter more to residents day to day.

The key takeaway of new heat networks and zoning policy

• Property owners should not be concerned about heat network zoning but they need to be kept informed.
• Developers, landlords, estate owners and organisations responsible for larger buildings should be aware of future heat networks and integrate them into early investment and asset-planning discussions.
• They should consider how the energy infrastructure around the property could change over the next 10–20 years before committing significant capital to a new heating system.

The most expensive mistake is not necessarily choosing the wrong technology. It can be making a major investment without considering what is happening to the wider energy system around the building.

Understanding the direction of travel now can help property owners make better-informed decisions about their buildings in the future.

You can read the Warm Homes Plan here.

Contact Edward if you have any questions about District Heat Networks.

Cagni Williams Energy