Heat networks

An energy centre is the building or space where the heat for a heat network is generated. It supplies heating — and sometimes cooling — to multiple buildings through the heat network to which it is connected. 

The heat generated may be produced or captured from local sources such as industrial waste heat, rivers, mines, and data centres, and it may use heat pumps to step up the heat temperature or to generate heat directly from the air.

Energy centres tend to be located close to the heat source (e.g., next to a factory or river), but they can also be remote from the buildings they serve if that’s where the best heat source is. They might also be in the basement of an existing building, or in a dedicated plant room.

Each connected building, unit or dwelling has a heat exchanger instead of a boiler, which transfers heat from the network into the building’s own heating and hot‑water system.

A heat source is the place where heat for a heat network comes from. A variety of heat sources can be used for heat networks, including things like:

• Waste a surplus heat from places like data centres, factories, or industrial processes that would otherwise be lost to the air.
• Heat pumps that use electricity to extract heat from the air, the ground, rivers, canals, or the sea.
• Geothermal heat, which comes from naturally warm underground rocks and water.
• Other renewable and low carbon technologies. Some could also provide cooling if they are used to capture heat.

Heat Networks take heat from one or more heat sources and distribute it to where it is needed. Each network operates at a set temperature, although different networks can vary from ambient temperature, all the way up to steam!

Because they can make use of waste and surplus heat, they can be a very efficient solution to decarbonising heating in buildings, saving businesses and residents money. They are particularly useful for buildings which cannot use air source heat pumps easily, such as because they are very large, or because they are very old. Whether they are the best solution for a building will depend on many factors.

Designed well, they reduce or remove the need for individual boilers, so can also offer benefits in terms of local air quality. 

There are already many Heat Networks within the West Midlands, including both district and communal networks which vary in size. These include Coventry's Heatline and Birmingham's BDEC networks.

Existing networks may be expanded in future. We are interested in the experiences of stakeholders on existing networks, and in the experiences of those who have developed a heat networks in the past.

We are currently undertaking a mapping exercise of all heat networks across the West Midland. Many are privately developed and operated. 

These will be people, companies and businesses who have an interest in or affected by a heat network, falling into the possible scenarios listed below amongst others.  Within the exploration of a heat network there will be a process to identify stakeholders.

• Heat network operator: This could be the asset owner or entity that owns or manages the network and plays a major role in how it is run.
• Heat network supplier: the developers and operators who build and operate the network and hold the contracts with customers. 
• Heat off-takers / consumers: These play a crucial role in the Heat Network with their commitment to purchase heat in exchange for a reliable, cost-effective, and sustainable heat supply. They are the households, businesses, or public buildings that buy heat from the network and rely on it for a reliable, affordable, low‑carbon supply.
• Heat source owners:  These are the businesses or organisations that provide low‑carbon heat, often by supplying waste or surplus heat from their operations.

• The West Midlands is a densely populated area with high heat and concentrated heat demand. This creates clear clusters where heat networks could work well.
• However, local low-carbon heat sources such as energy from waste, mine water, industrial waste heat, and wastewater treatment plants are limited. Careful planning and strategic management will be essential to develop heat networks in optimal locations, aligning consumers, energy sources, and demands.
• Government will identify priority areas for heat networks using the National Zone Methodology, with further detailed investigation carried out by local zone coordination bodies, in consultation with stakeholders.
• WMCA is working with partners such as National Grid Electricity Distribution to develop an interactive energy infrastructure  planning tool known as LAEP+ that will help councils and zone coordination bodies understand where heat networks make the most strategic sense.
• Birmingham and Coventry are current focus areas under the Advanced Zoning Programme, where potential heat network zones and existing networks are being mapped, and work is underway to identify a priority pipeline of projects.

• This will be set strategically in conjunction with stakeholders using local and national data by the zone controller in collaboration with the lead government department; the Department for Energy Security and Net Zero (DESNZ).
• Birmingham and Coventry are currently taking part in the as part of the Advanced Zoning Programme to prepare for consulting on heat network zones as soon as the heat network zoning statutory instrument is adopted.

• A heat network zone will be an area where it has been identified that heat networks represent the most economically feasible method to heat buildings and reduce carbon emissions from heating. 

• Heat network zoning will mandate specific buildings and low carbon heat sources to connect to a heat network within a set timeframe. There will be some exemptions. 

• Once in place, the zone coordination body will develop the heat network.

• The government is utilising National Zoning Model (NZM) methodology which will identify the initial indicative zones. This uses national data from utility companies and other sources to determine areas.
• There will then be refinement at local level led by zone coordinators in consultation with local stakeholders and the government, utilising local data and knowledge.

Where Zone Coordination Bodies will sit has not been formally decided and discussions are ongoing at all levels of Government. There could be a mix of zoning responsibilities placed at both local and combined authority levels, and we recognise that a regional coordination model would offer positive opportunities.   

• Zone coordination bodies can be a local authority, combined authority or sit jointly within both, forming a designated entity who will deliver the heat network with relevant stakeholders including central government. 

• Zone coordination bodies will also be able to work across two or more authorities or parts of their area.  
• Zone coordination bodies will work with relevant stakeholders to deliver the heat network, these include developers, building owners, consumers and heat source owners amongst others.
• Zone coordination bodies can be responsible for identifying and designating zones, tendering infrastructure contracts, and monitoring and enforcing zone requirements.
• Further information can be found at these Government websites:
  • 2023 Energy Bill Policy Statement
  • Energy Security Bill factsheet: Heat networks regulation and zoning (updated 20 March 2023)
  • Energy Act 2023 Part 8

• This will be a mixture of buildings including but not limited to new buildings, existing communally heated residential buildings, public-sector buildings, and non-domestic buildings.
• Heat sources may also be mandated to connect to the network for example data centres or industry identified as having waste heat.

• Legacy heat networks within a zone can be required to connect to the new scheme. If they don't meet the required standard, operators will be required to submit a Heat Network Improvement Plan.
• As part of the regulations existing Heat Networks outside of the heat network zone, will have to register and meet the new standards of operation.
• Both existing and new Heat Networks must be registered with Ofgem by the end of the initial period.

• Energy Capital are working with our constituent local authorities, Heat Network Developers, the Department for Energy Security and Net Zero (DESNZ) and with the Midlands Net Zero Hub to understand more about the ideal delivery model for heat networks under incoming national heat network zoning policy within our region. 

• Ofgem has been appointed as the regulator for heat networks, regulating both supply and operation functions ensuring consumers get a fair price and a reliable supply of heat, with heat networks under the same controls as other utilities such as gas electricity and water. The link for the Citizen Advice Bureau CAB
• The Heat Network Technical Assurance Scheme (HTNAS) will set out technical requirements (e.g. pipe insulation, water flow temperatures) which will be required for all new build heat networks. Legacy heat networks will have to formulate an improvement plan to meet these requirements. The link to Governments HTNAS page can be found here.
• There is also the Heat Network Industry Council (HNIC) which is the Government and Industry forum working together to develop the low-carbon heat network sector. This combination of Government and Industry allows the exploration of the Cost of heat, the routes to market and the skills required.  The link to the HNIC webpage can be found here.  The web site explains some of the pieces of equipment installed when connected to a heat network.