Ministers are preparing to unveil a fund to increase investment in heat network schemes across the UK.
News of the proposal came from Baroness Neville-Rolfe, minister at the new Department for Business, Energy and Industrial Strategy (Beis) at a meeting of the International Energy Agency in Paris.
Neville-Rolfe said the department considered heat networks to be an efficient way of delivering heat, using a range of low-carbon sources, and wanted to promote their greater use.
“We are about to take a big step forward,” she told delegates. “We are launching a scheme shortly to provide capital support for new infrastructure investment, to kick-start the heat network market and ensure that schemes that we’ve already got can be developed much more widely in the UK.”
The minister acknowledged that “ambitious projects are not cheap”, but said there was a need for an energy infrastructure for the UK that was fit for the 21st century.
She also indicated that Beis had plans for increasing connections with neighbouring countries to take their electricity.
“Our calculations show that, when these plans have been fully implemented, it should be possible to run our grid with the same level of confidence as before but with less overall capacity, so that increases efficiency.”
Neville-Rolfe noted increases in the efficiency of the UK renewables sector, which helped to reduce the need for subsidy in the longer term, and quoted offshore wind power.
“When the Contracts for Difference scheme was launched three years ago, we set the maximum price we would pay for electricity generated by offshore projects in 2017 at £140 per MWh. In March this year we announced that this would fall to £105 for projects generating in 2021 – already a 25% reduction.
“With projects competing against each other in an auction, we expect the actual price we pay to be even lower. And we have set out our ambition that offshore prices continue to fall.”