The Government’s newly published Warm Homes Plan marks a major moment for the future of low-carbon heat.

As well as a raft of policies that will aid the adoption and leverage of heat networks across the country, the Plan sends a strong and explicit signal of confidence in the value of heat networks to our energy infrastructure — positioning them as a cornerstone of a secure, affordable and resilient energy system. 

In Chapter 5 the Government sets out a clear and positive framework for how heat networks will be supported, scaled and embedded across towns and cities in the years ahead. For cities, councils, communities and neighbourhoods across England, it provides long-term certainty, practical tools and significant investment to make heat networks easier to plan, build and connect to.  

In this article, we’ve analysed the policies set out in Chapter 5 of the Warm Homes Plan – Unlocking the potential of district heating – to explain what they mean in practice for those looking to develop or connect to heat networks across the UK. 

Why heat networks matter 

The Warm Homes Plan recognises heat networks as a “proven, scalable technology” capable of delivering the “lowest‑cost, lowest‑carbon heat” for consumers. As well as the ability to efficiently generate and deliver low-carbon heat from a variety of sources, they also provide the opportunity to take advantage of waste heat sources such as data centres, wastewater facilities and industrial sites. 

Crucially, the Plan highlights that heat networks deliver benefits far beyond decarbonisation alone. By supplying heat centrally and efficiently, they can reduce electricity system costs and ease pressure on local grids, improving overall energy security.  

On a community level, they also support place‑based infrastructure that creates skilled local jobs and are inherently future‑proof – able to transition between heat sources over time as new low‑carbon options become available. Heat networks can also play a role in climate adaptation, with the ability to provide cooling as well as heating where required. 

A clear ambition for growth 

In the newly released plan, the Government has set out a long‑term trajectory for heat networks that gives confidence to local authorities and investors alike. They confirm a target to more than double the proportion of heat demand met by heat networks in England to 7% (around 27TWh) by 2035, with heat networks expected to supply around a fifth of all building heat by 2050. 

This growth is not expected to happen everywhere, but in the right places — areas where heat density, building types and local heat sources make networks the most efficient and cost‑effective solution. For councils, this reinforces the importance of strategic, area‑based planning and long‑term infrastructure thinking. 

Backing ambition with funding 

To support this expansion, the Government has committed a total of up to £1.1 billion of public funding for heat networks. A significant proportion of this will continue to be delivered through the Green Heat Network Fund, providing around £195 million per year to 2029/30. 

This funding is designed to de‑risk early projects, unlock private investment and support the transition to low‑carbon heat sources, including large‑scale heat pumps, waste heat recovery and ambient loop systems. Alongside this, the Plan confirms that the National Wealth Fund will be mobilised to help crowd in additional capital, supporting the development of a strong and investable project pipeline. 

For cities, councils, and development companies like 1Energy, this creates a far more stable environment in which to plan and deliver heat networks at scale, with clearer routes to financing from feasibility through to construction. 

Heat network zoning: certainty and coordination 

One of the most significant changes set out in the Warm Homes Plan is the introduction of heat network zoning from 2026. Zoning is intended to provide clarity about where heat networks are the preferred solution, giving local authorities a powerful new tool to coordinate development and align public and private investment. 

By identifying zones with high heat demand and strong potential for networked solutions, councils will be able to: 

• Build a credible, long‑term pipeline of projects 

• Reduce infrastructure delivery risk 
• Support more efficient connection of new buildings and major heat users 

• Ensure heat networks are developed where they offer the greatest system and consumer benefits 

Zoning also supports a more joined‑up approach to urban development, linking heat infrastructure with housing growth, regeneration, transport and wider net zero strategies. 

Creating the right market conditions 

The Plan recognises that unlocking the full potential of heat networks is not just about capital funding, but about creating a market that works for consumers and investors alike. Chapter 5, Unlocking the potential of district heating, sets out measures to support high public trust, competitive heat prices and a strong domestic supply chain. 

Importantly, the Government has committed to exploring all options to enable low‑carbon heat networks to compete fairly with gas, acknowledging the need to address structural distortions in the energy system that currently disadvantage clean heat. This is a critical signal for long‑term investment and for councils seeking to offer residents affordable, reliable alternatives to fossil fuels. 

The Plan also highlights the importance of access to low‑carbon heat sources and the role of local authorities in identifying and enabling these opportunities — from rivers and geothermal sources to waste heat from commercial and industrial sites. Leveraging heat that would otherwise be wasted presents an incredible opportunity to heat our communities from within, strengthen local resilience, and build a more self-sufficient circular economy. 

What this means for cities and councils 

Taken together, the policies in the Warm Homes Plan make it easier than ever for local authorities to plan, build and expand heat networks. The combination of long‑term targets, significant funding, heat network zoning and a clearer regulatory direction provides the certainty needed to move from pilots to programmes. 

For councils, this means greater confidence to invest in feasibility studies, masterplanning and early‑stage development; stronger partnerships with the private sector; and clearer pathways to delivering affordable, low‑carbon heat at scale for residents and businesses. 

A strong foundation for delivery 

The Warm Homes Plan is a clear vote of confidence in heat networks as a critical part of the UK’s clean energy future. By aligning funding, regulation and local delivery, it lays a strong foundation for accelerating deployment across towns and cities — helping to lower bills, cut carbon, create local jobs and build resilient energy systems for decades to come. 

As the focus now shifts to implementation, collaboration between government, local authorities and delivery partners will be key to turning this ambition into reality. 

To take a look through the Warm Homes Plan in more detail, you can find a copy on on the Government website: https://www.gov.uk/government/publications/warm-homes-plan