The UK government is putting £90 million into new and upgraded heat networks, with the stated aim of bringing cleaner, cheaper heating to more than 750,000 homes. According to the Department for Energy Security and Net Zero, the funding will support new low-carbon schemes, repairs to ageing systems and more than 2,000 jobs across the projects backed so far. For a country still exposed to gas price swings, that matters. Heat networks are not a niche fix for one estate or one town: when they are planned well and run well, they can cut wasted energy, steady bills and make dense urban areas easier to heat without locking homes into fossil gas.

Heat networks work by supplying multiple buildings from one central heat source through insulated pipes carrying hot water. That source might be surplus heat from a data centre or factory, or electricity-powered low-carbon equipment, which means the system can use energy that would otherwise be lost. The appeal is practical rather than abstract. Residents get heat and hot water, councils and hospitals get a shared system, and the UK gets another route to cut emissions from buildings, which remain one of the toughest parts of decarbonisation. The catch, as tenants on poorly maintained schemes already know, is that performance depends on solid design, regular maintenance and clear consumer protection.

The flagship scheme is in London, where £41 million has been awarded to a project running under and alongside the River Thames. If it secures planning consent, the network will supply 650,000 homes with clean heat, with the potential to reach more than one million residents as it expands. The proposal is unusual even by heat network standards. Hot water would initially travel 25 kilometres each day by electric barges along the Thames before moving through a purpose-built tunnel beneath the river to homes and businesses across the capital. The government says the scheme could bring in around £5 billion of wider investment and support up to 2,000 skilled jobs in tunnelling, engineering and river transport. Similar systems have operated for years in Copenhagen, Amsterdam, Vienna and Berlin, so the model is established even if the UK version is new.

Elsewhere, the funding is aimed at places where one extension can improve everyday life quickly. Bradford has received £9.7 million to expand its existing network, bringing cleaner heating and lower bills to 255 homes as well as a hospital and seven schools and colleges. In Solihull, £3.9 million will extend a system that already serves civic buildings, a leisure centre, a theatre and a college. London features heavily in the next wave. Bexley and Greenwich have secured £11.5 million to develop what could become the UK’s largest heat network, serving up to 100,000 homes when fully built. Around Marble Arch, £11.4 million is set to support a network using water-source heat pumps and energy from the London Chalk Aquifer, supplying offices, homes, hotels and businesses while creating 200 jobs.

Just as important is the less glamorous part of the package: fixing the systems that residents already rely on. The government has allocated £13.3 million to upgrade 76 inefficient heat networks across England and Wales, targeting the familiar causes of high bills and weak performance: leaky pipes, poor insulation and outdated heat interface units inside homes. Those upgrades should give residents more control over how much heat they use and pay for. In Manchester, £1 million is going to Cornwall Court in Gorton and Cundiff Court in Levenshulme, covering 130 residents. In London, £5.5 million will improve the systems serving 1,143 residents at Prospect House in Bermondsey and the Packington Estate in Islington. In Wales, £374,900 is earmarked for Eschol Court in Newport and Victoria Court in Abergavenny, benefiting 62 connected residents.

Martin McCluskey, the minister for local energy and jobs, has framed the funding as both an energy and industrial policy move: lower bills for households, steadier supplies and skilled work in construction and engineering. That case is credible when the projects are delivered well. Heat networks can cut waste, use local energy sources more intelligently and reduce dependence on gas in places where home-by-home upgrades are slower or harder to install. Meghan Newman of ADE: Heat Networks makes the sharper point. Building new low-carbon systems is only half the job; older, underperforming networks have to be repaired as well. For residents, that is the difference between a policy headline and a warm flat with a predictable bill.

Southern Housing Group’s Vega Building in Brighton offers the clearest household-level example of what success looks like. The 40-home building had been running at just 35 per cent efficiency, which left residents exposed when gas prices climbed in 2022. After a £200,000 grant through the Heat Network Efficiency Scheme, work in 2024 upgraded the engine room, insulated pipework, added new thermostatic radiator valves and installed heat interface units. The result was simple and measurable: the building now uses 50 per cent less gas, residents are saving £438 a year on heating and hot water, and comfort has improved. That is the standard these new awards will be judged against. Big investment figures matter, but the real test is whether more households end up with the same three outcomes Brighton residents have already seen: lower bills, warmer homes and a heating system that works when it is needed.