The UK government will invest £320m in heat networks to reduce energy bills for businesses and homes over the next five years.
Dubbed “central heating for cities”, heat networks have the potential to reduce heating costs by more than 30% and are already used widely in Scandinavian cities.
The technology involves gathering heat from sources including geothermal plants, factories and offices, piping it to a central storage location and then sending it to homes and businesses.
Secretary of state for energy and climate change, Amber Rudd, said: “This is an important next step in developing more home-grown energy, which is a vital part of our plan to ensure long-term energy security and affordable energy for our families and businesses.”
Heating currently accounts for 45% of UK energy use, while heat production accounts for 30% of the country’s carbon emissions.
The government is currently consulting with network sponsors, investors, supply chains and other stakeholders on how best to deploy the £320m allocated in the Spending Review for investment in heat networks.
“The funding we’re consulting on today will enable these schemes to provide affordable low carbon energy to thousands of homes and businesses across Britain’s towns and cities,” Rudd added.
Heat networks already exist in the UK in city centres such as Sheffield and Birmingham, but there are far more in other European countries such as France and Germany.