The UK government’s plans for a big increase in district heating over coming years, largely funded by private investment, presents a clear opportunity for infrastructure funds.
The government has said it wants 18% of heating of buildings in the UK to come from district heating by 2050, up from just 2% today, as it seeks to reduce carbon emissions. This will require billions of pounds of investment.
For now the UK government is focused on a scheme to support a series of district heating projects around the country, with the help of private investors.
There are two parts to the scheme, called the Heat Networks Investment Project (HNIP). First, the public capital part. HNIP, the brainchild of the Department for Business, Energy and Industrial Strategy (BEIS) – has made available GBP 320m. The public sector can bid for some of this money to help pay for heating schemes they want to develop.