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Dear stakeholders,
This note sets out a short update on the proposed approach for existing heat networks under the 2025 Future Homes and Buildings Standards. We trust that the clarity provided by this update will help heat network operators to have the confidence they need to decarbonise their networks to meet the current and future requirements.
As set out in the Heat and Buildings Strategy, Government believes that heat networks will be an important part of our net zero future in any scenario and thus developing the market for low-carbon heat networks will be a no-regrets action. This is supported by the Climate Change Committee’s recommendation for around 18% of UK heat to come from heat networks by 2050 as part of a least cost pathway to meeting net-zero. It is therefore important that Government supports the heat network industry in meeting the current and future requirements for heat networks.
We have committed to introducing the Future Homes Standard (FHS) and Future Building Standard (FBS) from 2025. Our intention is to set performance standards at a level which will mean that new homes and buildings will not be built with fossil fuel heating. We intend to consult in 2023 on the FHS and FBS. We recognise that heat networks are large pieces of energy infrastructure which are designed and built over very many years and therefore require regulatory signals in advance of many other technologies and that more information, now, about the planned standards will support industry to invest in decarbonising their networks to meet the standards.
We know that some heat network operators are concerned that the FHS and FBS might require them to remove and replace all of their existing heat generation with different sources in order to comply with new limits. This could increase heat network customers’ fuel bills compared to the phased approach to decarbonising set out in the Heat and Buildings Strategy. Heat networks are a key technology within the Heat and Building Strategy (HBS) for decarbonising the UK’s building stock and they will have a key role to play in the delivery of the Future Homes and Buildings Standards.
We are, therefore, committing in this statement that we plan to support the expansion of heat networks where they are making demonstrable steps to decarbonise. The FHS and FBS should not prevent new buildings connecting to existing heat networks. However, homes and buildings constructed to the FHS and FBS should have low carbon emissions, regardless of their heat source. We therefore plan to link dispensation for new buildings connecting to existing heat networks to the nature and quantity of additional low carbon heat generation that has been added to the network i.e. at a minimum, the heat required by any additional homes connected to an existing heat network should match the low carbon heat generation capacity that has been added to the network. As part of the upcoming 2023 consultation, we are looking at a series of options for how this principle can be implemented.
Heat networks can take heat from the lowest-carbon heat sources available. Enabling them to add this low carbon heat generation through the Future Home Standard will mean these heat networks will be providing low-carbon heat to new buildings but will also be making significant steps to decarbonise their wider network and already-connected customers.
We are also committed to working with the heat networks industry through coordinated activity as well as through regulation to ensure that heat networks do decarbonise in order to meet our 2050 net-zero goal. The government’s forthcoming regulatory framework for heat networks will enable government to set maximum emissions standards for heat networks. We have set out in previous consultation responses how we will use these powers to ensure that existing heat networks that develop in heat network zones in England are required to decarbonise starting in the late 2020s, and to require the remaining networks to decarbonise from the early 2030s.
Sincerely
BEIS Heat Networks Policy and DLUHC Building Regulation Teams
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