Grant Funding - Heat Networks Investment Project (HNIP)

Further information on the Heat Networks Investment Project (HNIP) offering grant funding of up to £5m for the development of renewable heating networks from January 2019.

  • Heat Networks Investment Project

The government have recently announced the introduction of a new grant funding scheme in order to develop the use of renewable heating within the UK. The scheme itself is specifically for the  “commercialisation“ of heating networks. In this instance a heating network is defined as ‘the distribution of thermal energy in the form of steam, hot water or chilled liquids from a central source of production through a network to multiple buildings or sites for the use of space or process heating, cooling or hot water. This means that the cost of any new heating equipment (biomass boiler, CHP, Biogas etc) will unlikely be included within the scope of eligible costs. However the scheme provides an ideal opportunity for the creation of local decentralised heating networks to allow direct sale of heat to customers from your installation.

With funding up to 50% of the capital costs for projects of up to £5million per project, this scheme provides opportunity for a variety of applicants including those with existing renewable heating systems, those currently developing renewable heating systems or those considering a new renewable project. Although any heat used in the grant funded equipment is not eligible for Renewable Heat Incentive (RHI) payment itself, it will not adversely affect returns for any heat being used in equipment already accredited . The scheme could therefore provide significant benefit to those receiving lower RHI rates, struggling to meet new sustainability requirements and assist in the development of more “useful heat” in the face of Ofgem’s ongoing views and policy changes against the use of heat for drying.

The scheme is set to launch in January 2019 with payments being received as early as April 2019. Therefore forward planning is essential to assure early engagement while funds are available. The process itself will be decided by an “Investment Committee” meeting on a quarterly basis to appraise submitted applications.

Although further detail is not set to be released until next month, the grant is intended to be eligible for the following costs:

  • The building of new heat networks
  • Development of existing heat networks, including improvement and carbon reduction
  • Commercialisation phase and construction costs
  • Building connections
  • Works to access recoverable heat

In order to be eligible for the scheme, the projects must:

  • Be of an eligible technology type (heat from 75% gas CHP, 50% renewable or recovered heat)
  • Meet all technical and customer requirements (CISBE ADE Code of Practice, Heat Trust, billing regulations)
  • Demonstrate carbon savings
  • Evidence a funding gap

If these eligibility criteria are met, then the application will be assessed against others based on the following areas:

  • Volume of heat delivered
  • Project carbon savings
  • Consideration of future decarbonisation and expansion
  • Deliverability

At JHWalter we have considerable experience in both grant funding and renewable energy/heating systems giving us the expertise to assist in initial project ideas, feasibility, advice on integration with existing schemes, agreement of easements or wayleaves, as well as the creation and submission of the application itself.

If you believe that this is something that may be of interest for your business please contact Henry Haworth in our Energy Team on 01522 504327.