Households and businesses across Wales are set to benefit from new government investment in clean, low‑cost heating, following the expansion of the Green Heat Network Fund to support projects in Wales for the first time.
The move extends a fund that has already backed heat network developments in England, giving Welsh consumers increased access to secure, homegrown and low‑carbon energy. By reducing reliance on volatile fossil fuel markets, the expansion will help cut heating costs while supporting the transition to cleaner energy.
The decision comes amid ongoing geopolitical instability in the Middle East, underlining the importance of the government’s long‑term commitment to clean, domestically produced power. Heat networks play a crucial role in strengthening energy security, as they rely on local energy sources rather than imported fuels.
Under the expanded programme, £195 million per year will be invested into heat network projects across England and Wales for the remainder of the decade. Thousands of households are expected to benefit from more affordable, low‑carbon heating as new schemes come online.
The expansion of the Green Heat Network Fund is also expected to support hundreds of clean energy jobs across Wales, creating new opportunities for engineers, architects and construction workers. These roles will help design, build and maintain the clean heating systems needed for the future.
By backing large‑scale infrastructure projects, the funding will support regional economic growth while developing specialist skills aligned with the UK’s net zero ambitions.
The move builds on significant government investment in innovative heat network projects in England. One recent example is a £15 million heat network in Sunderland, which recovers waste heat from a data centre to provide heating across the city. The project is creating almost 300 jobs and apprenticeships, while demonstrating how excess heat can be repurposed to deliver affordable, low‑carbon energy.
Heat networks provide heating and hot water to multiple buildings from a central energy source, delivered through a network of insulated pipes. These systems can be powered by heat pumps, or by capturing excess heat from sources such as factories, sewage systems or data centres.
There are already more than 500,000 heat network customers across Britain, and the number is expected to grow rapidly as investment increases.
Minister for Energy Consumers, Martin McClusky, said:
“We are determined to fight people’s corner in this crisis, as we recognise cost-of-living concerns will be at the forefront of people’s minds.
“Welsh households and businesses will be able to benefit from low-cost, low-carbon heat networks, protecting them from volatile fossil fuel prices we don’t control.”
Earlier this year, heat network customers gained new consumer protections for the first time, bringing them closer in line with households connected to traditional gas and electricity networks. These protections apply across England, Scotland and Wales, with Ofgem appointed as the sector regulator.
Ofgem now has the power to intervene where operators impose unfair price rises or deliver poor service. Customers affected by service outages may also be eligible for compensation through the Energy Ombudsman, improving confidence in heat networks as a long‑term heating solution.
The expansion of the Green Heat Network Fund marks a significant step forward in delivering affordable, low‑carbon heat to Welsh homes and businesses. By combining cleaner energy, stronger consumer protections and job creation, the funding will help Wales play a central role in the UK’s clean energy transition.
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