As a result of the incredible interest there has been in the Green Heat Network Fund (GHNF) the Department for Energy Security & Net Zero (DESNZ) has confirmed an extension of the support available via the scheme. As a result, we are making some changes to GHNF including extending the funding period and amending some scheme rules. However, please note this will mean some alterations to the funding round timescales.
To date, we have announced more than £117 million of GHNF awards to 9 projects. It is a sum that evidences the rapid growth in the heat network market every bit as much as it demonstrates the popularity of the fund. We are currently working with a number of successful GHNF applicants from earlier rounds on a further announcement which we hope to publicise shortly. The latest DESNZ heat networks project pipeline also indicates a strong active pipeline of nearly £2.3 billion of which over £800 million relates to GHNF.
In March, the Government confirmed that capital support for low and zero-carbon heat networks would be extended to 2028. This included £220 million for the Heat Network Transformation Programme over 2025/26 and 2026/27.
The GHNF has proved very popular, and the pipeline of prospective applicants exceeds the fund’s current size, therefore DESNZ has confirmed that additional capital funding will be allocated to the GHNF which will be available over a longer period to provide greater certainty in the medium-term.
This means that future applicants will be able to apply for funding that could be drawn down in financial years 2023/24 through to 2026/27. Please note that the allocation of funding in the later years of the scheme is expected to be highly competitive. Projects able to take funding earlier are encouraged to do so and may fare better in the competition.
As a result, we plan to introduce some scheme rule changes which may alter the types of projects that are eligible for support under the scheme given the extended timeframe for funding, increased competition and the expected implementation of the Future Homes and Future Building Standards. We are working urgently with DESNZ to review and update the GHNF Guidance for Applicants and the Application Form to reflect these.
We want to give applicants as much time as possible to prepare whilst also enabling future rounds to run at a consistent pace. Therefore, round 6 will close slightly later than originally anticipated to ensure that applicants have sufficient time to review revised guidance and prepare high quality applications. The timeframes for the future GHNF application rounds will also change.
We recommend that applicants should consider third party funding options such as the BHIVE , the UK Infrastructure Bank or private sector investment before coming forward for GHNF support. This will strengthen the competitiveness of submissions reflecting the popularity of the scheme.
These changes will be confirmed via an update to the GHNF Guidance for Applicants in the next few weeks and we expect that round 6 will close around the end of September as a consequence. If you are concerned about any of these rule changes, please contact your Relationship Manager.
If you are working on an application for round 6 or beyond, we would advise that you continue to develop the project. However, we recommend that all applicants wait for the updated guidance and application form to be published before submitting an application.
Whilst we are considering these changes, we are still here to support you and would encourage anyone considering an application to get in touch with our Relationship Managers by emailing email@example.com. We recommend that anyone interested in the GHNF signs up to our mailing list (here) to be the first to know when we are accepting new applications and when the updated Guidance has been published. We will host an application seminar shortly after the Guidance has been published to answer any questions you may have. Project teams keen to learn how to access BHIVE funding may wish to attend our webinar on 5th June. To register, please click here.