Renewable Energy Magazine
Gas distribution company SGN and UK renewable energy solutions provider Vital Energi are combining to form a unique and pioneering private sector initiative to develop, own and operate low and zero-carbon heat networks.
The 50:50 joint venture will create an Energy Services Company (ESCO), representing the UK’s leaders in utility infrastructure and heat networks to provide affordable and low-carbon infrastructure to SGN’s existing land portfolio. This includes delivery of heat to developments planned by SGN’s property arm, SGN Place, and the local vicinities where there is a demand for low-carbon heat.
It is estimated that the heat network market requires approximately £30 billion of investment by 2050 to meet the UK Government’s net zero targets, and the decarbonization of heat has been highlighted as a particular challenge where heat networks can offer a solution. The Climate Change Committee’s Sixth Carbon Budget suggests the UK should target 20% of UK heat demand through low-carbon heat networks by 2050.
Together, SGN and Vital have ambitious plans to establish solutions to this challenge across strategically located sites. These locations are a combination of redundant sites owned by SGN and others which will be developed over time through Vital’s existing market presence.
The objective is to supply new and existing residential, industrial and commercial facilities and development activity is already underway for two projects in Scotland and the South East, with another 20 in the pipeline.
SGN is looking to develop alternative heat solutions alongside its core gas distribution business and expand into the growing district heating market, recognising the future of heat is likely to include a mix of technological solutions and energy sources.