The Law Society Gazette
Summary
The decarbonisation of heat is anticipated to play a fundamental role in achieving net zero carbon emissions. The pressure to realise net zero, enshrined in the Climate Change Act 2018, whereby carbon emissions are reduced to as close to zero as possible by 2050 and any remaining emissions are offset by the equivalent amount being removed from the atmosphere, is increasing.
Electrification of heat through the transition to heat networks and, at a household level, through a broader deployment of heat pumps to replace gas boiler demand, remain the main routes for decarbonisation.
This article discusses recent regulatory developments supporting the transition to low carbon heating and highlights future developments relevant to heat networks.
While heating networks may be eligible for financial support under the Renewable Heat Incentive schemes, recent developments relating to their closure (and replacement) are outside the scope of this note.
Climate Change Act 2018
The Climate Change Act 2018 (CCA) established a legally binding target for the UK to reduce its carbon emissions by 100% from 1990 levels by 2050. This will require all carbon emissions to be eliminated, captured or offset by then. Currently, a third of the UK’s emissions stem from heating residential, commercial and industrial buildings, making the decarbonisation of heat a significant area to tackle on the path to net zero. Heat also accounts for almost half of UK energy use, making it an important component in our energy mix.
Market for heat networks
Heat networks (also known as district heating) are a network of underground insulated pipes transferring heat from a centralised generation source (eg, energy from waste plants) that often goes to waste, and delivers it to multiple end users, cutting gas consumption and energy wastage.
There are over 14,000 heat networks in the UK, providing heating and hot water to approximately 480,000 consumers. Up to £16bn of capital investment could be needed for heat networks to deliver their full contribution to net zero.
Currently, heat networks are not regulated. Government support has been channelled primarily through its Heat Networks Delivery Unit which supports local authorities in England and Wales through the early stages of heat network project development, and the Heat Network Investment Project (HNIP). HNIP has been extended until March 2022 and will then be succeeded by the Green Heat Networks Scheme fund. In October 2020, a new Public Sector Decarbonisation Scheme was launched to fund low-carbon heat measures by public sector bodies.
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