Heat networks could match gas boiler costs, report says
16 March 2026
Clean heat networks could become as cost-effective as gas boilers, according to a new report from ADE: Heat Networks, which sets out a pathway for wider adoption of the technology across the UK.
The Clean Heat 2040 report finds that, once additional factors are included, the cost of running heat networks can compete with traditional gas heating. These factors include revenues from energy flexibility, lower electricity delivery costs and operational efficiencies.
Heat networks distribute heat from a central source through insulated pipes to multiple buildings. Sources can include large-scale heat pumps, rivers, disused mines or waste heat from facilities such as data centres, replacing the need for individual boilers in each property.
The report concludes that linking these systems with thermal storage and electrification allows them to make use of periods when renewable electricity is abundant and cheaper. Heat can be generated and stored when supply is high, then released when needed, reducing overall system costs.
It states that this flexibility could also benefit the wider energy system by absorbing excess electricity and easing pressure during periods of high demand.
Chris Unsworth, head of the ADE, says:
“We are flushing money and energy down the pipes. We let heat from data centres vanish into thin air and switch off our wind turbines while millions struggle with bills. This report proves that clean heat can be cost competitive with gas, but only if the government starts treating heat networks like the essential infrastructure they are.”
The report sets a path to 2040, outlining how the sector can attract £100bn of investment and create 100,000 jobs. But it warns that without urgent government action, this opportunity will be lost. It calls on the Treasury to create a proper incentive for households and businesses to switch and on ministers to give heat networks the same long-term investment support as technologies like nuclear.
