New funding deadlines are approaching for the Heat Network Efficiency Scheme (HNES). The next round is expected to open on 30 March 2026, giving eligible organisations the opportunity to access part of the scheme’s £77 million funding allocation.
At the same time, businesses are under increasing pressure to decarbonise their heat stock as regulations like SECR, ESOS, and the Minimum Energy Efficiency Standards continue to drive greater scrutiny of energy use and emissions. Here’s what you need to know about the latest HNES funding and upcoming deadlines.
What is the Heat Network Efficiency Scheme (HNES)?
Heat networks, also known as district heating, are systems that distribute heat from a central source to multiple buildings through a network of insulated pipes. The Heat Network Efficiency Scheme (HNES) aims to provide funding that will improve existing heat network systems, particularly to those that are operating inefficiently or delivering poor outcomes for customers.
The scheme is available in England and Wales and is open to organisations across the public, private, and third sectors. Up to £77 million in grant funding is available between 2023/2024 and 2027/2028 financial years.
What does Heat Network Efficiency Scheme funding cover?
Funding for the HNES is highly competitive. To be successful, projects must demonstrate that they will reduce carbon emissions, reduce customer detriment, and help prepare the heat network market for sector regulation and technical standards.
Applicants can apply to HNES to acquire either capital grant funding or revenue grant funding:
- Capital grants: Up to £75 million total will be allocated between 2023/24 and 2027/28 to part-fund (up to 50%) the delivery and installation of eligible improvement measures. The HNES funding is match funding, meaning applicants must be able to finance the remaining project costs through internal budgets or alternative funding sources.
- Revenue grants: Up to £2 million was allocated across 2023/24 and 2024/25 to support Optimisation Studies, with funding beyond this period subject to budget availability. Revenue funding supports the procurement of external expertise to assess performance issues and recommend costed improvement measures.
Examples of works that may be eligible for support include insulation of pipework, pump or pipework replacement/removal, and heat generation plant controls. A full list can be found in the HNES Guidance for Applicants document.
Who can apply to the HNES?
In order to apply, applicants must operate or manage their existing heat networks within England and Wales. Eligible organisations include:
- Public sector organisations, such as local authorities, NHS trusts, and universities
- Private sector organisations that are registered companies
- Third sector organisations, such as charities
When are the next HNES deadlines?
The next deadlines for funding will open on 30 March 2026 and close on 22 May 2026, subject to budget availability. Further deadlines are outlined in the table below.
HNES Funding Round | Funding round opening date (date from which application forms can start being completed) | Funding round closing date (final application submission date for inclusion in Funding Round assessment) |
Round 12 | Expected to open 30 March 2026 (subject to budget availability) | Expected to close 22 May 2026 (subject to budget availability) |
Round 13 | Expected to open in August 2026 (subject to budget availability) | Expected to close in October 2026 (subject to budget availability) |
For further insight into heat networks, listen to our Sustainably Speaking podcast episode, where Lars Fabricius of SAV Systems and Andy Pickard from Blackpool Council share practical perspectives on improving efficiency.
Applications for HNES funding are highly competitive, and the window opens soon. If you believe you have a network that could be improved, get in touch with one of our experts at Sustainable Energy First to arrange a survey. This will help define how your heat network stock could benefit and support the development of an application for the Heat Network Efficiency Scheme.
If you’re interested in Heat Networks, why not tune into our podcast below all about them.
Heat networks have a key role to play in the UK’s net zero journey. For businesses, they present both a sustainability opportunity and a commercial challenge: reducing carbon, cutting energy costs, and reshaping how organisations report emissions.
This episode of the Sustainably Speaking podcast from Sustainable Energy First dives further into this topic, bringing together expert voices to unpack what heat network efficiency means for organisations today.
This discussion brings in industry leaders, including:
- Lars Fabricius, Managing Director of SAV Systems
- Andy Pickard, Net Zero Innovation Delivery Officer at Blackpool Council
More Heat Network related articles are available to read here:
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