The Heat Network Efficiency Scheme (HNES) is a government grant to help improve the performance of existing district and communal heat networks in England and Wales. It offers two routes

• Revenue grants to fund external optimisation studies that diagnose issues and recommend costed measures. Typical awards are £15,000 to £24,000 and can cover up to 100 percent of eligible costs including non recoverable VAT.

• Capital grants to part fund delivery of eligible improvements such as controls upgrades, balancing and flushing, HIU replacement, insulation and metering. Capital can cover up to but not including 50 percent of eligible costs including non recoverable VAT. Individual capital applications can be up to but not including £10 million. Requests over £1 million are subject to additional Subsidy Control checks.

Legal entities responsible for operating or managing an existing network for example local authorities, NHS Trusts, universities, registered companies, charities and community interest companies. Individuals and consultants applying on behalf of clients are not eligible.

Scheme focus and assessment
Applications are competitive and prioritise projects that

• Reduce customer detriment with a focus on residential customers in need

• Improve operational performance efficiency and losses and deliver carbon savings

• Show clear value for money and credible deliverability within scheme timelines.

• The project is an existing or operational heat or communal network in England or Wales.

• You can evidence a baseline of current performance and quantify predicted benefits.

• Your scope uses eligible measures for example controls, balancing, HIUs, insulation, metering and similar improvements.

• For capital, you have a match funding plan and can begin works within the funding window. Applicants must provide monthly spend forecasts and start within three months of signing the grant agreement.

• You can meet monitoring and reporting obligations set by the scheme.

HNES is a £77 million programme running multiple funding rounds through to 2028.

Round 11 of HNES funding opens 1st December through to 6th February

Proving Customer Benefit

Applications often underplay how residents will benefit.
How Elevate helps: We align your case with HNES Objectives 1 and 2, showing clear evidence of customer and community impact.

Weak Baseline Data

Incomplete metering or KPIs make improvement hard to prove.
How Elevate helps: We build robust baselines, close data gaps, and quantify predicted performance improvements.

Ineligible Works

Including excluded items, such as primary plant or in-dwelling emitters, can risk rejection.
How Elevate helps: We review your scope against HNES rules and identify alternative funding routes where needed.

Match Funding and Subsidy Control

Capital grants cover up to half of eligible costs, with larger bids requiring subsidy checks.
How Elevate helps: We evidence costs, structure match funding, and prepare subsidy statements that satisfy assessors.

Tight Timelines

Projects must start within three months of signing and complete spend within the financial year.
How Elevate helps: We build realistic procurement and mobilisation plans that align with HNES delivery windows.

Value for Money

Some applications fail to link spend to results.
How Elevate helps: We tie itemised costs to measurable outcomes, making your value-for-money case clear and persuasive.

Previous Learning

Reapplications must demonstrate lessons learned.
How Elevate helps: We create concise learning notes showing how insights have shaped future projects.

Metering and Regulation

HNES cannot fund metering required under the Heat Network (Metering and Billing) Regulations.
How Elevate helps: We clarify boundaries, address overlaps, and include cost-effectiveness evidence where relevant.