£1bn of heat networks set to decarbonise homes and cities

A new partnership has been fired up between a leading energy network organisation and an independent infrastructure equity fund manager to help provide homes with low-carbon heating alternatives.

Pinnacle Power, an organisation which helps operate and fund energy networks for a number of different communities and DIF Capital Partners, an infrastructure company which helps to fund strategies, have joined forces in an attempt to turbocharge the UK’s heat network capability. The new partnership aims to deploy town-and-city scale heat networks to decarbonise tens of thousands of homes and buildings in England.

The agreement was formed following a 10-year investment by Pinnacle Group which has seen the company grow to be one of the leading heat network providers in the UK, making them the best organisation for this particular job.

In addition, the decision to coincide was driven by the fact that currently, heat-related activity is the biggest contributor to greenhouse gas emissions, accounting for 37% of total emissions in the UK.

When these networks are built out, this investment will save up to 200,000 tonnes of CO2 a year, by cutting out the need for homes and buildings to have their own gas boilers.  Furthermore, they will remove tens of thousands of boiler flues – a pipe that carries exhaust gas produced by a boiler outside the home – that would otherwise contribute significantly to air pollution levels.

Heat networks are designed to take waste heat from local industrial and commercial buildings and send it into the local community as usable and cleaner heat to keep people’s homes warm.

According to experts, in the right location, heat networks have the cheapest lifetime cost of all available energy options to decarbonise heat.

The devices are already commonplace in Northern Europe, where typical country penetration ranges from 20-70%, and in 2050, the same in expected in the UK.

Toby Heysham, CEO of Pinnacle Power, said: ‘As recognised in the Government’s Energy Security Plan, heat networks will play a critical role in delivering affordable, low-carbon heating, and help hit the UK Government’s legally binding carbon targets.

‘We are excited to be working with DIF to deploy the scale of investment this market needs. We know that the industry needs to deploy at least £60-80bn into low-carbon heat networks to unlock the vast amount of local, wasted heat and deliver that heat into homes and businesses. Many towns and cities have declared climate emergencies but very few have credible solutions to the ‘heat challenge’. This investment offers a clear pathway to achieving decarbonisation, through local investment in locally generated, low-carbon heat.’

Gijs Voskuyl, Partner and Head of Infrastructure at DIF Capital Partners, said: ‘We share Pinnacle Power’s view that district heating networks will play a pivotal role in the energy transition story of the UK.

‘We are impressed with what the Pinnacle Power management team has achieved to date and firmly believe in their ability to grow the business, backed by strong regulatory tailwinds. Pinnacle Power represents a compelling investment proposition for DIF, with an opportunity to invest in a build-to-core sustainable energy platform operating in a rapidly growing market.’

Image: Pinnacle Power