The Heat Network Efficiency Scheme (HNES) is a UK government initiative to fund improvements to existing heat networks. It aims to reduce energy waste, lower consumer bills, and minimise carbon emissions by optimising outdated systems through equipment upgrades, better insulation, and enhanced performance monitoring.
What is HNES?
HNES offers revenue grants for optimisation studies and capital funding for infrastructure upgrades and implementing the recommendations. The scheme aims to reduce carbon emissions, lower energy bills, and enhance reliability of heat networks.
By modernising sub-optimal systems, HNES improves performance and prepares operators for new sector regulations and technical standards (such as the recently released draft of TS1- Heat Network Technical Standard). The deadline for the current funding round is 6th February 2026.
Who qualifies for HNES funding?
To qualify you must:
- Have an existing communal or district heat network
- Be situated in England & Wales
- Be able to prove that your heat network is performing sub-optimally
- Have the authority to make changes to the network
- Serve ‘customers in need’ such as social housing, care and supported housing, and areas with high levels of fuel poverty.
Why it matters - HNES in action
By fixing inefficient systems, HNES directly reduces bills and carbon emissions, all while ensuring operators meet new Ofgem regulations taking effect in 2026. Imagine a 1980s social housing block with 100 residents. Their communal heating system is failing: pipes are poorly insulated, the control system is outdated, and the radiators in each flat are frequently breaking down.
The Problem:
Residents pay 40% more for heat than their neighbours because the system wastes half its energy before it reaches their radiators. In winter, top-floor flats are freezing, while ground-floor hallways are hot from leaking pipe heat.
The HNES Solution:
The heat network operator applies for an HNES Revenue Grant to 100% fund a technical study. The study identifies that replacing the central pumps and re-insulating the main pipework will stabilise the system. They then secure an HNES Capital Grant to cover 50% of the installation costs.
How to apply for the Heat Network Efficiency Scheme
The scheme is run on behalf of the Government by Gemserv. To claim, you must send an Expression of Interest before gaining access to the online HNES portal where the full application can be submitted.
Reduce costs, carbon and risk with HNES
HNES is a great opportunity for you to reduce your running costs, carbon footprint and minimise the cost to the end consumers, all while preparing for future regulation.
Not sure where your heat is being wasted? Reach out to our team to see how we could support a professional optimisation study - at zero cost to your organisation.
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