Local authorities leading district energy

The UK government’s ambitions to expand district heating and support local authorities in their development constitute a unique opportunity for Swedish heat network suppliers.

The Department of Business, Energy & Industrial Strategy, BEIS, aims to achieve an 8 per cent annual growth of heat networks.

This corresponds to a growth in market share from today’s 2 per cent to a minimum of 14 per cent by 2050. In order to deliver on this ambitious target, the UK will need to invest in building currently inexistent capabilities and skills at the required scale within the heat networks market. This gap in skills constitutes a unique business opportunity for Swedish technology and service suppliers.

The majority of the government support is directed towards local authorities. So far, about 115 Local Authorities have received funding to carry out approximately 200 feasibility studies across England and Wales, some of which are now starting to procure and build district heating. However, some Local Authorities have come further than others when it comes to designing, procuring and constructing district energy.

One example of a Local Authority that has shown substantial progress, already initiating construction, is Manchester. According to the consulting firm Catapult Energy Systems, district heating already supplies heat to approximately 2,000 homes. These homes are mainly located in two sites, Media City and St Mary’s Oldham in Manchester, both delivered by the developer Vital Energy.

Another example is Gateshead Council, which, with support from the engineering consultancy, WSP I Parsons Brinckerhoff, has been developing a district energy network to serve the town centre and Gateshead Quays area. You can read more about the scheme here, or see their development plan here. Other examples of Local Authorities that are nearing construction and procurement for heat networks are:

  • Bristol
  • Stoke
  • Haringey
  • Boroughs within London Greater Authorities, GLA
  • Boroughs within  Greater Manchester Combined Authority, GMCA
  • Fife Council
  • Cheshire East
What can you as a supplier do?

We recommend all companies keep up to date with which local authorities are receive funding from BEIS. On the local authorities’ website, it is often stated which consultant or principal contractor has won the tender. On the UK government portal, you can read more about the amounts and types of funding each Local Authority has received from the government. This indicates the likelihood of heat networks developing in that particular Local Authority.

We also strongly recommend companies to continuously monitor public tenders among Local Authorities that have received funding. Stay up-to-date on potential business opportunities within Local Authorities by subscribing to tender portals.

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