£90m funding announced for heat networks serving hundreds of thousands of homes

23 September 2026

More than 750,000 homes are set to benefit from new or upgraded heat networks backed by £90m of government funding.

The funding will support new low-carbon networks as well as repairs to existing systems, with the government saying the projects will create more than 2,000 jobs.

The largest project is in London, where a proposed network could eventually supply heat to 650,000 homes, potentially benefiting more than one million people. The government is providing £41m towards the project, which is subject to planning consent.

The scheme would initially transport hot water 25km along the River Thames using electric barges before it is carried through a tunnel beneath the river to homes and businesses. The government says it could unlock about £5bn of investment in London’s local heat networks.

In Bradford, £9.7m will fund an extension to the city’s existing heat network, connecting 255 homes, a hospital and seven schools and colleges. Other projects include £3.9m to extend the heat network in Solihull and £11.5m towards a proposed network in Bexley and Greenwich, which could eventually serve up to 100,000 homes.

A further £11.4m will support a heat network around London’s Oxford Street and Marble Arch, using water-source heat pumps to extract heat from the London Chalk Aquifer.

The government is also providing £13.3m to upgrade 76 existing heat networks across England and Wales. Work will include replacing leaking pipes, insulating pipework and replacing equipment in residents’ homes to give them greater control over their heating.

The Association for Decentralised Energy’s heat networks policy manager Meghan Newman says:

“This funding is a clear signal that heat networks matter. To hit our climate goals, we must be just as focused on fixing inefficient legacy systems as we are on building the smart networks of the future. That’s how we cut bills and deliver results for consumers.”