Heat networks could save the UK tens of billions by 2050

25 February 2026

Heat networks will deliver billions in annual cost savings for the UK – no matter how fast battery prices fall or how quickly they roll out – according to new research by the ADE.

The study reveals that heat networks could save £3.46 billion a year, with cumulative savings of £86.6 billion by 2050. Even modest deployment could save £1 billion a year, rising to £6.45 billion if ambitious deployment is coupled with similar ambition across the energy sector. In this scenario, cumulative savings could hit £161 billion by 2050.

The ADE’s analysis, supported by government, industry and academic experts, reports that heat networks reduce energy generation costs and require less investment than individual air source heat pumps across the scenarios tested. Under equivalent cost assumptions in the model and counterfactual, annual net savings are estimated at £3.46 billion, including £1.2 billion in generation cost savings, and investment costs approximately £1 billion per year lower than for individual air source heat pumps. The analysis also estimates £2.4 billion per year in savings for the broader electricity system, including around £0.5 billion in distribution savings.

Under scenarios with ambitious heat network deployment and low battery costs, the model estimates annual net savings of £6.45 billion, including £7 billion from more efficient energy generation.

Freddie Wilkinson, ADE senior researcher, says:

“The numbers don’t lie; heat networks are the solution. Whether we go big or start small, these systems cut costs, year after year. Heat networks are key to an energy system that pays us back. Every pound saved is a pound for schools, hospitals, or cutting bills. The faster we act, the faster we win.”

The research also finds that heat networks can reduce strain on the electricity grid. Large networks connected to a smart electricity grid are estimated to save £2.4 billion annually for the broader electricity system, increasing to £5.7 billion in scenarios with ambitious retrofit and low battery costs. In these scenarios, the model estimates savings of £2.7–£5.9 billion per year even when their peak-demand smoothing capability is excluded.

The ADE urges policymakers to prioritise heat networks in net-zero plans, stressing their unmatched potential to future-proof the UK’s energy landscape.