Heat Network Efficiency Scheme (HNES) opens to applicants in February 2023

17 January 2023

Ridge is looking to help their public sector clients, private sector organisations and third sector organisations in attaining grant funding on the latest Heat Network Efficiency Scheme (HNES). It has been announced that the first round of 8 funding applications will open in February and close on 31st March 2023.

“The Heat Network Efficiency Scheme (HNES) is a £32m grant support programme for FY23/24 (Year 1) and FY24/25 (Year 2) that will open to applicants in February 2023. It will provide funding to public, private and third sector applicants in England and Wales, to support improvements to existing district heating and communal heating projects that are operating sub-optimally and resulting in poor outcomes for customers and operators.” – www.gov.uk, January 2023

Projects can apply for two separate funding streams:

  • Revenue Grants – (HNES budget up to £2m across FY23/24 and FY24/25) – Grants to fund procurement or mobilisation of external third-party support to carryout optimisation studies. These studies will assess heat network projects to identify causes of sub-optimal performance and recommended costed intervention or improvement measures.
  • Capital grants – (HNES budget up to £30m across FY23/24 and FY24/25) – Grants to part fund (up to 50%) the delivery (installation) of eligible intervention/improvement measures.

The three main objectives are:

  • Objective 1 – Reduce carbon emissions by making heat networks more efficient
  • Objective 2 – Reduce customer detriment to improve consumer confidence
  • Objective 3 – Help prepare the heat network market for sector regulation and technical standards.

Objectives 1 and 2 form key principles against which the HNES assessment methodology has been developed.

Capital Grant funding allows applicants to apply for up to, but not including, 50% of the total estimated eligible costs. This is split across four categories:

  • Category 1 – Energy centre / plantroom (not including main primary plant)
  • Category 2 – Primary / secondary distribution pipework
  • Category 3 – Tertiary network (no services beyond the customer meter or Heat Interface Unit (HIU))
  • Category 4 – Metering

Ridge is currently supporting a local authority with an application for replacement pipework and individual HIUs across a 550 residential property district heating scheme. Our input includes sketch design including material and equipment selection, cost analysis, programme generation and project delivery as well as direct input into the application process itself.

If you would like to discuss an existing scheme for its suitability for this funding or if you have a specific project in mind, please don’t hesitate to get in touch.

Jon Fisher
Building Services Engineering Partner
Ridge Reading