On 27 February 2025, Engage Consulting’s Senior Consultant, Lorenzo Wong, took a seat on the panel for Energy UK’s Breakfast Briefing on aligning energy system planning and heat network zoning.
What is heat network zoning?
Heat networks will be crucial to decarbonising heat in buildings and are forecast to meet at least 20% of UK heat demand by 2050 in a cost-effective net-zero pathway. To support the sector’s growth and decarbonisation, the UK government is working with local authorities to designate zones in towns and cities where heat networks will provide the lowest cost solution to decarbonising heat.
Through a standardised national methodology, zoning will identify non-domestic and new residential buildings where heat networks are the lowest cost low-carbon heat solution. These buildings will be clustered into zones, and many buildings in a zone will be required to connect to the local low-carbon heat network within a specified timeframe. By facilitating large-scale heat networks that supply heat to thousands of homes and businesses, zoning should attract increased private investment and accelerate the sector’s growth and decarbonisation.
How does heat network zoning relate to energy system planning?
Modern heat networks can be connected to Thermal Energy Storage (TES) systems and take heat from various recoverable heat sources (e.g. data centres and waste incinerators). This means that they can provide flexibility services to the grid by using grid electricity to fill up thermal stores when supply is abundant and deploy heat from thermal stores and recoverable heat sources when supply is scarce. Heat networks, therefore, need to be part of wider conversations on ensuring that the energy system can take on increased variable renewable generation and harness supply and demand-side flexibility.
Event Summary
The Energy UK event gathered experts from across the heat network sector to discuss key delivery considerations for zoning and how to ensure alignment with wider energy system planning. Joining Lorenzo on the panel were:
The discussion began with a question on how zoning fits into local energy planning. Janette Webb highlighted the importance of integrating zoning into Regional Energy Strategic Plans and the interactions with the Strategic Spatial Energy Plan (SSEP). As local systems that help balance electricity supply and demand, heat networks should be a key factor for NESO in coordinating national and regional spatial planning. Alia Campbell then set out how demand modelling can ensure that heat network zones are located in the right places where they can provide affordable, low-carbon heat.
Matt Baker from Gren and Ian Meyer from Vattenfall provided perspectives from a heat network investor and developer, respectively. Key themes included the benefits of treating heat networks like other utilities in terms of how they are regulated and how they form part of key action plans such as Clean Power 2030. Ian Meyer highlighted that heat networks’ 15 to 20-year payback period requires the sector to attract patient capital and for zoning to provide certainty of heat demand and clarity of timeframes.
Engage’s Lorenzo Wong talked through the interactions between zoning and incoming regulation, highlighting that the investor confidence provided by zoning needs to be accompanied by consumer confidence in heat networks, which was damaged by gas price spikes following Russia’s invasion of Ukraine (most UK heat networks are still gas-fired). Lorenzo also stated that zoning could be central to winning over consumers by facilitating multi-source heat networks with integrated TES that mean low prices and reliable low-carbon heat for consumers.
If you would like to find out more, Energy UK has provided a recording of the event.
Engage Consulting
At Engage Consulting, we are subject matter experts in the energy sector. We provide advisory services to the heat network sector, including supporting heat networks to prepare for regulation. If you would like to find out more, feel free to reach out to our Heat Networks expert, Lorenzo Wong.
