GrantRadar

Department for Energy Security and Net Zero

Heat Network Efficiency Scheme (HNES)

DESNZ's Heat Network Efficiency Scheme funds public, private and third sector organisations (including registered charities) that operate or manage an existing district or communal heating system in England or Wales that is performing poorly. Revenue grants pay up to 100% of an external Optimisation Study (typically £15,000 to £24,000); capital grants pay up to, but not including, 50% of eligible improvement works, with bids up to (not including) £10 million. Priority goes to networks serving residential 'customers in need' such as social, supported and extra care housing and households in fuel poverty; it runs in competitive rounds.

Apply on the funder’s site
You could get
£5,000 – £9,999,900
Deadline
96 days left
22 January
Effort
Heavy
budgets, references, often several stages

Who can apply

  • Organisations responsible for operating or managing an existing district heat network or communal heating system in England or Wales: public sector bodies (including local authorities, NHS trusts, universities), private sector registered companies that submit annual accounts, and third sector organisations such as registered charities, community interest companies and other officially registered organisations that submit annual accounts (e.g. a charity running supported or extra care housing with communal heating)
  • The applicant must be a legal entity with authority to sign off investment decisions for the heat network, and the applicant name should match the bank account receiving the grant
  • Individuals cannot apply and consultants cannot apply for clients (they can help prepare applications)
  • Capital grants are by default only for networks supplying residential 'customers in need'; affordable home ownership, shared ownership, students and over-55s without care needs do not count as customers in need
  • Capital applicants must have match funding in place

What it funds

  • Improvements to existing, operational district or communal heat networks that are operating sub-optimally
  • Revenue grants: up to 100% of the external costs of an Optimisation Study delivered by a third party to the HNES specification (baselining, data capture, site visits, costed intervention packages and recommendations), typically £15,000-£24,000 including non-recoverable VAT if requested, plus temporary metering within that range
  • Capital grants: up to (but not including) 50% of eligible costs of installing intervention/improvement measures on heat network infrastructure, with no lower limit and requests up to (not including) £10 million (over £1 million gets extra subsidy control checks)

Projects are prioritised for residential 'customers in need' (social housing, low-income housing, fuel poverty, extra care housing, low-income care homes, supported housing), poor baseline performance, carbon savings and value for money.

What it will not fund

  • Costs already incurred or work commissioned before an award or application
  • Costs unrelated to heat network infrastructure, e.g. building fabric improvements
  • Engagement activities, stakeholder management and internal staffing or project management costs
  • Replacement of the primary heat generation source in the energy centre or plant room
  • Pipework between the customer interface (e.g. HIU) and heat emitters, or replacement of radiators or underfloor heating
  • Metering already required under the Heat Network (Metering and Billing) Regulations
  • Operating costs, including fuel or temporary energy supply
  • Construction, operation and maintenance of a heat network (revenue grants)
  • Capital grants for networks with no residential 'customers in need', unless there is a compelling strategic rationale
  • Networks serving one building with a single customer
  • Applications from individuals, or from consultants on behalf of clients

How to apply

  1. Check eligibility in the HNES guidance for applicants; if unsure, email hnes@talan.com
  2. Register an Expression of Interest by emailing hnes@talan.com with project name, applicant organisation and type, local authority area, capital or revenue, estimated request, target round, % residential customers in need and contact details
  3. Request an application space no later than two weeks before the round closes (Round 14: expected by 22 January 2027)
  4. Receive access to the HNES online portal and complete the capital or revenue application form
  5. Upload supporting evidence via the portal and submit by the round closing date (Round 14: expected 5 February 2027)
  6. Respond to clarification questions during assessment (typically weeks 1, 3 and 5)
  7. If successful, sign the Grant Funding Agreement and start works within three months; provide monthly spend forecasts and monitoring reports

Round 13's application-space deadline was 25 September 2026 (closes 9 October 2026), so new applicants now target Round 14, expected to open 30 November 2026 subject to budget. Round 15 is expected April-May 2027.

All round dates are expected dates, subject to budget availability.

Have ready

  • Completed online application form (capital or revenue)
  • Narrative evidence, including how 'customers in need' figures were derived (e.g. accommodation schedules, network drawings, data capture summaries)
  • Baselining evidence of network performance (e.g. consultant reports, metering or BEMS outputs)
  • Budget costs: consultant or contractor quotes, QS reports, evidence of supply chain engagement
  • Project programme and milestones, and a procurement/mobilisation proposal
  • Signed letter confirming the required applicant confirmations
  • Completed AP1a form

Capital applications also need targeted benefits evidence (an Optimisation Study or equivalent) and a granular cost breakdown; previous HNES recipients must show how learning was shared.

More like this

Other grants open to organisations like yours.