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Blog Post 13 September 2021

What is district heating? A low carbon solution for the UK’s homes

District heating offers the promise of a simple solution for the supply of low carbon heat to homes, businesses and public buildings across the UK.

It’s all about taking energy released as heat from a range of energy sources and connecting to energy consumers through a system of highly insulated pipes.

There is considerable support for the expansion of such heating networks. While just over 2% of UK homes are currently connected to a district heating network, more are expected to come online as the UK transitions to net zero over the coming decades.

District heating vs community heating

There are already over 17,000 heat networks in place in the UK*, and nearly half a million connections to them, most of which are domestic customers. They are a particularly attractive option in dense urban areas and have been cited as a way of tackling fuel poverty while also reducing housing management costs.

The establishment of heat networks, which can vary enormously in size, means that cheaper, lower carbon sources of heat generation can be added over time without additional, later upheaval such as digging up roads, or making changes in people’s homes.

It’s important to make a distinction between district and community heating. Community heating is about supplying heat to a relatively small development of one or perhaps two buildings with multiple dwellings, such as a multi storey block or sheltered housing complex. District heating has wider objectives: distributing large-scale sources of heat over a large area and connecting multiple buildings in a heat network. Both community and district heating can be described as heat networks.

Making district heating work for all

It’s important that the potential benefits of localised heat generation are realised in practice.

Schemes to encourage uptake of district heating that assess and work alongside projects is one way of ensuring standards are met. In Scotland, the District Heating Loan Fund, funded by the Scottish Government, is working to support good quality schemes that reduce bills, reduce emissions and create jobs.

Since the fund launched in 2011 there has been a change in the type of projects applying for funding. Smaller schemes were initially the norm, but now there are much larger schemes coming through, with typical loans of over £1 million being offered.

There have also been changes in the type of technology featuring in applications. Schemes based on heat pumps (ground, water, and air source) are on the rise, after applications initially were dominated by wood fuel-based systems.

Support for a sector heating up

The UK Government’s non-domestic Renewable Heat Incentive (RHI) provided important fiscal impetus for the sector before it closed to new applicants at the end of March 2021. Plans for new heat networks require a life cycle approach to business planning, so long term financial leverage is required to make the business case stack up for trailblazing schemes.

In England and Wales, the UK Government launched a £320 million investment programme in 2018, as part of ambitious plans to extend district heating capacity, driven by local authorities. There is a target in place for 15-18% of heat to be generated from networks of this kind by 2050, and the Scottish Government has its own ambition to achieve big increases.

This is undoubtedly a growth sector, and it’s possible that a more common sight in coming years will be district heating included as part of new housing developments, such as the new Linen Quarter housing development in Dunfermline, where homes are heated through a district heating system that uses heat from landfill.

There is, though, a long way to go before the UK is anywhere near levels of uptake elsewhere in Europe. For example, the city of Copenhagen is almost entirely served by district heating, and around 65% of housing in Denmark as a whole, with not-for-profit organisations and consumer owned cooperatives heavily involved in supply. By way of comparison, there is just over 2% uptake of district heating in the UK at present with very few not-for-profit agencies delivering heat.

Copenhagen is almost entirely served by district heating

Awareness and advice is key

It’s important that as the heating supply becomes closer to home, there are adequate safeguards in place to protect consumers. The Scottish Government has recently introduced new legislation (the Heat Networks Scotland Bill), which will implement a licensing system for heat network operators to ensure best practice, while the Heat Trust was set up in 2015 as a voluntary UK wide scheme to set common standards across the sector and give consumers a voice.

For community groups thinking that district heating might be for them, it’s important to consider that a certain degree of expertise is required to build out and manage schemes. It’s a big ongoing commitment, requiring responsibility for heating, metering and billing – to all intents and purposes becoming a small utility company.

It’s clear, too, that there needs to be more advice for households looking to either connect to or disconnect from schemes. For those considering getting involved, there’s a lot to think about. Research is required, and it’s important to seek independent legal advice before signing any heat sales contract with a supplier. In Scotland, householders can contact Home Energy Scotland for advice if they are thinking of connecting to a district heating scheme.

There’s some way to go before district heating becomes a major part of the UK heat mix – but there is a lot of promise if it can be done right. A mix of the right support (including advice and funding) for both those looking to establish networks, and the householders who’ll be using the heat in their homes, could see potential become reality.

*Research carried out in 2018; more recent figures not currently available.

Last updated: 13 September 2021