The Heat Network Efficiency Scheme (HNES) is a £107 million grant support programme running from 2023/24 to 2029/30 that provides funding to public, private and third sector applicants in England and Wales to support improvements to existing district heating or communal heating projects that are operating sub-optimally and resulting in poor outcomes for customers and operators.
The HNES is open to organisations in the public, private or third sectors in England and Wales.
o Public sector organisations include local authorities and other government departments.
o Third Sector Organisations include organisations such as registered charities, community investment companies and other such organisations that are officially registered and submit annual accounts.
o Health and education sector organisations including NHS trusts, universities and colleges.
o Eligible private sector organisations are those that are registered companies and submit annual accounts.
Applications are now open for Round 13 of the Heat Network Efficiency Scheme. An Expression of Interest (EoI) must be submitted by Friday 25th September 2026 to secure access to the online portal and application form. The deadline for (Stage 2) Full Applications is Friday 9th October 2026.
For the purposes of HNES, a heat network is defined as “a network of pipes that distributes heating, cooling or hot water to at least two buildings, or at least two customers in at least one building“.
HNES is open for applicants from projects that will:
o Reduce carbon emissions by making heat networks more efficient.
o Reduce customer detriment to improve consumer confidence, and
o Help prepare the heat networks market for sector regulation and
technical standards
The HNES grant application and award process prioritises projects which:
o Support residential “customers in need”, defined as those considered financially vulnerable: social
housing, low-income housing, customers in fuel poverty, extra care housing, low-income care homes and supported housing, and
o Deliver benefits which can demonstrate significant improvements to poorly performing networks.
Applicants can apply to HNES for either revenue grant funding or capital grant funding.
Revenue Grants
HNES budget up to £2m subject to budget availability. Funding is available for procurement of mobilisation of external third-party support to carry out Optimisation Studies. These studies will assess heat network projects to identify causes of sub-optimal performance and recommend costed intervention or improvement measure.
Capital Grants
HNES budget up to £105M subject to budget availability. Part-funding available for the delivery (installation) of eligible intervention/ improvement measures.
For further information, guidance and details about how to apply, please follow this link to GOV.UK.
