In November 2015, the government announced that it was making available £320m of funding to support investment in heat networks over the next five years.
This is expected to draw in up to £2 billion of additional capital investment and lead to the construction of hundreds of heat networks in England and Wales.
The pilot scheme is being launched now for applications this autumn, with first payments to be made by 31 March 2017.
The budget available for the pilot scheme is reported to be up to £39m, split across two financial years (2016/17 and 2017/18).
The pilot will consist of one single competitive funding round and is expected to inform the design of the main scheme, which is anticipated to open in 2017 and run for four years.
The pilot scheme is open to local authorities and other public sector bodies excluding central government departments, noting that there are some restrictions on the type of finance that some public sector organisations can accept.
The following criteria has been set out;
- Applicants can apply for grants or loans.
- Any efficient heating and cooling networks in England and Wales – including those that also generate electricity – is eligible for support.
- Eligible costs include the construction, expansion, refurbishment and interconnection of heat networks, including works to access recoverable heat and upgrade of heating systems inside some existing properties as well as commercialisation phase costs (where they are capitalised).
- Multiple criteria will be used to score and rank applications with respect to their carbon savings, customer impact and social net present value.
The pre-qualification process for the pilot funding round will open on Tuesday, 18 October.