District heating

This section explains what district heating is and how it can be used in urban areas.

Why use district heating?

In the right location it is an ideal investment opportunity for local authorities. Although the capital costs are high, risk is low and local authorities can prudentially borrow at low interest rates.
It is an ideal urban technology and maybe one of the few low carbon energy options open to urban areas.
It can provide infrastructure to which property developers can connect to lower a property's carbon emissions. This helps them achieve Building Regulations compliance.
It can provide good long-term financial returns.
It improves the efficiency of thermal electricity generation and reduces CO2 emissions by making use of surplus heat.

Benefits and potential impacts of district heating

Cost and funding

Costs for a district heating scheme vary considerably. The following costs are an indicative guide of installed costs. It includes generation and supply infrastructure, a heat exchanger and meters.

The cost for domestic systems (per dwelling) is:

£7,500 for a small terrace
£8,300 for a semi-detached dense development
£4,200 for a converted flat
and £4,400 for a low-rise flat.

For commercial systems, the cost for infrastructure per square metre is £8.40 in a city centre and £16.40 in an urban area. The cost of a heat exchanger and meters (per kW) is £20 for both city centre and urban area commercial systems.

For more detailed information about cost and a list of available funding see below:

How much does district heating cost and where can I get funding?

Project timescales

Project timescales will vary depending on the scale or the nature of the project.

A small district heating network built solely to serve a new development may have timescales that match those of the development itself.

A town-wide district heating network serving multiple new and existing developments may develop in phases over a five to 15-year period.

How and where district heating works

District heating is not simply an energy generation technology. It is also a means of distributing heat (and cooling in some systems) generated in a centralised plant or energy centre to homes and other buildings.

The diagram on the right shows how district heating distributes heat to an area.

Key:
1. Hot water tank
2. Back-up boiler
3. Heating system
4. Heat exchanger
5. Energy centre
6. Hot water flow in insulated pipes
7. Anchor load (for example, a school or hospital)
8. Low temperature return in insulated pipes.

District heating will not be suitable in all locations. It works well in urban areas due to the cost of the pipe work and the need for sufficient customers for the heat. While physical barriers, such as rivers and railways, can limit where district heating networks can be established, only the density of heat demand would determine which areas of the country are most suitable.

See the 'Examples of how district heating is used' page for an explanation of:

how the heat is generated, distributed and used
suitability for district heating in an area
managing installation and maintenance.

Examples of how district heating is used

Practical issues

The practical issues to consider for using district heating are presented in a table on the 'District heating project checklist' page. You will also find information on when planning permission is needed for district heating schemes.

District heating project checklist