Veolia has called for the government to back a new wave of district heating and implement policies to benefit the market for low carbon heating.
The company wants to grow its district heating presence further in the UK, using a mix of different sources of energy to deliver carbon-neutral heating and cooling. It said it now it has a £1 billion pipeline of projects that are due to be awarded by 2030m, in Wiltshire, London, Bristol, Yorkshire and Cambridgeshire. This pipeline includes £210 million of 2025 project wins already awarded .
It said policy changes needed include:
• Support for Heat Networks through the UK Emissions Trading Scheme (ETS). Energy from Waste facilities should be incentivised to supply local networks through ETS allowance liability reductions for providing heat to communities, encouraging cleaner heat.
• Long-term funding post-Green Heat Network Fund. Longer term funding mechanisms beyond existing grants need to be developed, so heat network projects continue to boom in the UK and can continue to provide cheap, low carbon heat to consumers.
• Mandation of the use of waste heat from buildings on heat networks. New – and certain existing – buildings should be obligated to connect to and actually use local heat networks, ensuring stable demand for these systems once built.
As of 2024, only around 3% of UK heat demand is met by district heating networks, however the Government target is for this to reach 20% by 2050 to support national decarbonisation goals.
Veolia said it had recently
• Completed Phase One of its “Southwark 2.0” district heat network in south London. Phase Two of the Southwark 2.0 project is due to begin in March 2026, subject to regulatory approvals. Once finished, the network will supply nearly 7,000 homes in the capital with heat from Veolia’s energy from waste plant in Southwark.
• Been selected by Wellcome Genome Campus as its preferred partner to design and build a 5th generation heating and cooling network, which will recover geothermal heat, alongside waste heat from a data centre. The campus in Cambridgeshire is increasing from 125 acres to 440 acres.