Recommendation 26

The NAO reported that DESNZ was yet to determine its approach for homes that are complex to decarbonise. DESNZ told us that it considered that heat networks would be the next major alternative low-carbon technology for people living in properties that are unsuitable for a heat pump. DESNZ outlined that it was identifying areas suitable for heat networks through heat network zoning in partnership with local authorities. It explained that it had a strong pipeline of projects for heat networks and was investing some £868 million in heat networks up to 2028. This included £338 million to 2025 and £530 million between 2025 and 2028. It explained that the main source of funding was 42 Q 66; C&AG’s Report, para 2.21 43 DHH0045 44 DHH0043 45 Qq 114–116; C&AG’s Report, para 2.22 46 DHH0024, Written evidence submitted by Mr Tom Lowe, 29 April 2024; DHH0044, Written evidence submitted by Tepeo, 29 April 2024 47 DHH0041, Written evidence submitted by NexGen Heating, 29 April 2024 Decarbonising home heating 17 its Green Heat Network Fund, which it said had so far provided grants of £268 million to support 20 projects. DESNZ stated that most applications to this fund were for large heat pumps, some of which use energy from waste, mine water or geothermal sources. DESNZ estimated that around 3% of total heat demand is supplied to buildings through heat networks, but it believed that there was potential for that to expand to around 20% by 2050.48