Driving growth in the UK’s district energy sector: An interview with Simon Woodward

We recently had the opportunity to speak with Simon Woodward, Chairman of the UK District Energy Association (UKDEA) and ask him some questions to gain insight into the current state and future outlook for district heating networks in the UK.

Simon’s background and UKDEA’s growth

Simon brings over a decade of industry leadership experience to the district heating sector. 

“Until 2014, I ran one of the UK’s largest utility heating companies, overseeing the development of major networks in cities including Southampton, Birmingham and London. Since then, I’ve been an independent consultant assisting local authorities to create district heat networks. I also took on the role of Chairman of the UKDEA in 2010, when it was founded with just six member organisations.”

Under Simon’s guidance, the UKDEA has grown rapidly to include over 160 members spanning local authorities, housebuilders, energy service providers, system suppliers, and manufacturers such as Uponor.

What is the role of the UKDEA?

The UKDEA is a voice for members and acts as a platform for coordination and knowledge exchange. It proactively drives growth through targeted policy-making and public debate interventions.   

“We engage with the Government on behalf of our membership to shape future policy and regulations impacting the sector. People don’t realise, but one of the largest single topic government teams is involved in the heat networks, with 60 people, so we regularly meet people from the heat network teams. We respond to consultations issued by the DENZ (Department for Energy Security and Net Zero), providing recommendations and lobbying for measures supporting district heating networks' growth.”
In addition, the association provides opportunities for members to share information and collaborate through industry working groups, seminars, publications and online resources. This helps the members to stay on top of the latest developments.

"When it comes to our initiatives, we run several Working Groups with which we encourage members to be involved. We're running one on counterfactuals, which looks at the costs consumers are currently paying or will pay for in building solutions, which helps us to set a fair level for heat network charges. Another one is a group we want to encourage companies such as Uponor to be part of, which is about how to develop initiatives to grow the supply chain."

What is the UK Government doing to support growth in district heating networks?

“The Government has stated that it aims to get to 20% of heat from district heat networks by 2050, and we’re currently at about 2-3% in the UK, so that’s a massive growth, but it is achievable.”

The main policy the government is bringing in to deliver this growth is The Energy Act, which has recently received Royal Assent. One key section of the Act involves heat networks and the introduction of heat zoning¹, which could change the development of heat networks in towns and cities across England by designating cost-effective decarbonisation zones. 

"I find it surprising that the concept of heat zoning within the Energy Act is not more widely known across the UK., and it means that every local authority in England will have their local authority areas zoned for heat networks.” 

Zoning allows local authorities and developers to efficiently identify locations for new, large-scale strategic heat networks, contributing to a smarter electricity system and avoiding the costs of expanding the electricity grid to achieve net-zero goals.

“The final heat network zone consultation is now published, and , the UKDEA will review it and then respond on behalf of our members.”

What are the primary growth drivers for district heating networks in the UK?

For Simon, there are two clear drivers which have existed for a number of years. The first is the robust planning obligation within London from the Greater London Authority's (GLA) ambitious planning policies and the second, is national government grants supporting project development and capital costs.

“The GLAs’ Energy Assessment Guidance² tells consultants how they should approach designing new buildings in London. It’s based on the London heat map produced by the GLA and shows what to do with heat networks in London. It shows existing heat networks, proposed building densities, etc. But it also includes shaded heat network priority areas. There’s an expectation that when new homes are built, the planning submissions will include an energy strategy that creates an on-site community heating network. This has undoubtedly been a massive driver for the uptake of heat networks in London for new builds.”

Alongside these planning policies, two UK government funding initiatives have helped support the development of heat networks, according to Simon.

“There’s the Heat Delivery Network Unit (HNDU), which supports feasibility study work, grant funding and guidance for local authorities in England and Wales. Then there is the Green Network Heat Fund (GHNF which provides capital funding to private and public sectors for new low and zero-carbon heat networks.”

“So those have been the two drivers for people creating heat networks over the past few years in advance of heat network zoning coming into force - the GLA planning policy and government grant programmes. Other authorities around the UK have a fairly strong planning process, but nowhere near as strong as the GLA’s.”

Do you envisage any challenges to the growth of district heat networks?

"In a heat network zone, you can only operate the heat network zoning rights and mandate people to connect if you're doing it with a low-carbon heat source. At the moment the Government's definition of this is if you're supplying heat that has a content of less than typically 100g of CO2 per kWh (the GHNF threshold). There are so many different heat sources you can feed into a network. It could be energy from waste, sewage works, data centres, industrial heat, or a myriad of sources. However, if the third-party owners of this heat don't play fairly and make it available to the developers, heat zoning won't work. This is where secondary legislation comes in that will be developed during 2024 now the Energy Act is in force."

Finally, how can manufacturers like Uponor support the growth of heat networks?

Simon believes that pipe manufacturers and providers of local heat distribution such as Uponor have a vital role in helping the sector grow. As well as actively participating in the Association's Working Groups, they can make sure they understand what's happening, such as with zoning and grants, so they can talk to their customers in an informed way and become champions of the effectiveness of the networks.
“The more they can translate knowledge about district heating networks, the more chance there is that projects will come to life. So, rather than just selling a product, they can bring value to the project. It’s about the benefits rather than the equipment,”

“There is also innovation to look at in terms of pipes that can operate at higher pressures and temperatures for larger networks.”

A promising future for district heating networks.

Simon’s insights shed light on a positive future for district heating networks in the UK, driven by collaboration, innovation and a collective commitment to sustainability.

He is highly optimistic about the sector’s upward trajectory given the strengthening policy support. However, he issued an essential reminder, “The UK industry has been here before in the 1960s and 1970s when poorly designed and installed networks gave district heating a bad name.”

Avoiding the same pitfalls will rely on players across the entire sector working collectively to ensure the current potential does not go to waste. With so many voices praising the merits of district energy, Simon believes we will finally get it right this time.

 

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