Government announces £40m for heat network upgrades

20 May 2026

More than 10,000 residents, as well as hospitals, schools and charities, are set to benefit from government funding aimed at improving ageing heat networks and expanding low-carbon heating systems across England and Wales.

The government has allocated £15.6m to upgrade 94 existing heat networks, which supply heating from a central source to multiple buildings. The improvements will make the systems more energy efficient and help reduce heating bills.

The work includes replacing leaking pipes, improving insulation and installing new interface units in homes to give residents greater control over heating.

A further £25m has been allocated to four new heat network projects in England through the Green Heat Network Fund.

The largest share, £13.5m, will go to the Bristol City Leap project, which plans to expand a heat network using heat pumps to provide fossil fuel-free heating to homes and businesses.

In Rochdale, £1m will support a project using heat from the town’s sewer system to supply low-carbon heating to colleges, schools, Rochdale Infirmary, businesses and residential buildings, including social housing.

Other projects include £8.6m for the next phase of the King’s Cross Heating and Cooling Network in London, which already serves more than 1,700 homes and 44 buildings. A scheme in Atherstone, Warwickshire, will receive £2.2m to use waste heat from an energy-from-waste facility to provide heating to 1,700 homes.

Chris Unsworth, head of ADE: Heat Networks, says:

“Low-carbon heat networks work, they work for hospitals, they work for charities and they will work for over 10,000 residents who will now see lower bills. This funding will reach the strongest anchors in our communities – the places that can’t afford to be left behind. We now need to go further to fix every legacy heat network, connect every public institution that could benefit and unlock the full potential of heat networks.”