Tom Collins

The Committee for Climate Change has recommended the government grows the heat network sector from providing 3% of national heat demand to 20% by 2050. We are implementing heat network zoning and funding low carbon heat networks to get to this scale.

Heat networks can use a variety of heat sources such as heat from industry and natural heat sources such as rivers. Where industrial or natural heat sources are not available heat networks can use large air-source heat pumps. When deployed in the right locations will be lower cost for consumers than other low-carbon individual heating systems.

Dispersed locations form a major part of UK industry’s pathway to Net Zero, accounting for approximately half of emissions. The £6 million Local Industrial Decarbonisation Plans competition is funding 13 decarbonisation projects in local clusters, including in areas with hard-to-electrify industrial processes, supporting dispersed industrial manufacturers not located in the UK’s existing industrial clusters to start their journey towards Net Zero.

Government is also providing decarbonisation support to dispersed sites through the Industrial Energy Transformation Fund (IETF). In the 2024 Autumn Budget, the Government committed £163 million to continue delivery for all current projects of the IETF through to completion.

The Government is committed to enabling the development of hydrogen storage infrastructure to meet the needs of the emerging hydrogen economy. This includes supporting the development of storage infrastructure that can operate over a range of durations and serve multiple end-users.

The Government intends to design the first Hydrogen Storage Business Model (HSBM) procurement to contribute towards an ambition to support up to two storage projects at scale to be in operation or construction by 2030.

We are continuing to develop our approach to the development of hydrogen storage infrastructure through strategic planning and the HSBM as a priority.

The Department’s UK TIMES model captures interactions across the entire energy system, from fuel extraction to final energy demands, enabling comprehensive analysis of decarbonisation pathways and helping us explore the optimal future energy system. This model has been instrumental in developing departmental net zero strategy, including our understanding of the future power sector. Building on this, DESNZ recently invested in BID3, a new model designed to simulate a fully connected power and hydrogen market across the UK and EU. BID3 will model power generation, hydrogen production, transmission, gas transport, interconnectors, and storage, allowing comparison of whole-life system costs and cashflow, across future scenarios.

The Boiler Upgrade Scheme does not currently support air-to-air heat pumps, as heat pump installations must provide both space heating and hot water heating, using liquid as a medium for delivering that heat. In most cases, air-to-air systems only provide space heating, with many installations still reliant on burning fossil fuels for hot water. We want to target support at technologies that offer the greatest potential to decarbonise our buildings.

However, the Government will keep its position on alternative electric heating technologies under review, and would consult industry and key stakeholders on any potential changes to the scheme before making any decisions.