Green Heat Network Fund
Consultation on proposals for the scheme design.
Objectives of the consultation
The proposed Green Heat Network Fund is intended to help new and existing heat networks to move to low and zero carbon technologies.
This consultation sought views on the design of the scheme and covered its major components, including:
- the application criteria,
- the sources of thermal energy supported,
- the types of heat networks in scope and the eligibility criteria, and
- finance and the supply chain.
The consultation closed on 29 January 2021.
You can download the consultation document below.
CIBSE understands that BEIS wish to ensure the Green Heat Network Fund (GHNF) scheme will be available to support new and existing schemes and are therefore looking at a few options:
Option 1: A dedicated pot for new build - CIBSE agrees with the assessment that this could be difficult to manage and have unintended consequences.
Option 2: A weighting system within the assessment process that seeks to treat existing and new networks on a level playing field in terms of cost per kWh - This could be difficult to create and somewhat arbitrary, and doesn’t align with the objective to decarbonise as much heat as possible.
Option 3: Existing networks only to be supported for extensions - CIBSE do not agree with this.
Option 4: Requiring existing network applications to include, in addition to their application, works to improve the overall operating efficiency of the network in addition to decarbonising thermal generation - This is CIBSE’s preferred option, but we think that projects that are purely about plant switching from fossil fuels to low carbon should be supported, as long as they meet the same criteria as other proposals. We understand BEIS expect that existing networks will ultimately have to transition due to the policy environment and therefore that this transition will happen regardless of funding. However:
- these policies are not confirmed yet, and could take a while to be implemented. A first step of regulation could be a requirement for existing networks to produce decarbonisation plans, as is being looked at by the Scottish government but not yet, as we understand, by BEIS.
- in preparation for regulation, funding could support the development of expertise and examples, which are currently rare; it could in turn inform future policy and support its feasibility at lesser cost for the rest of the market in the future.
In short, there needs to be support for the low-carbon transition of existing networks, whether or not they have plans to expand.
Funding for this for at least the first few years of the GHNF could significantly help in this transition. CIBSE would be very happy to work with BEIS on gathering lessons from this phase, to be turned into guidance for the wider industry. This will be even more powerful with conditions of data collection, performance evaluation and disclosure for schemes which are funded in this way – see comments in section Monitoring Of Outcomes And Scheme Evaluation. If there is a concern about availability of funding for other networks, there could be a limit on either the funding for these type of projects or on the number of projects eligible for this funding so that it is clearly a pathfinder scheme and is first come first funded.
You can download the full CIBSE response below.