FairHeat has the expertise and experience to help you secure government funding through the Heat Network Efficiency Scheme (HNES) , for capital or revenue grants, to improve the performance of your heat network.

What is the Heat Network Efficiency Scheme (HNES)?

HNES is a grant funding scheme for existing district heating networks and communal heating systems.

The previous round of funding, the Heat Network Efficiency Scheme (HNES) demonstrator was a £4.175 million grant scheme for the 2021 to 2022 financial year. It supported performance uplifts to existing heat networks or communal heating projects where outcomes for customers and operator experienced were sub-optimal. The measures delivered by projects supported short-term and sustained efficiency savings in fuel consumption and carbon emissions, and address areas of customer detriment.

The next rounds of funding will deliver £30m of capital grants to part-fund the installation of targeted and cost-effective performance improvement measures.

The scheme will also provide up to £2m of revenue funding for projects to carry out optimisation studies, identifying costed and cost-effective performance improvement measures.

The scheme is intended to launch in February 2023 and run until March 2025 with multiple funding rounds, the first of which will close towards the end of March 2024. The scheme will be open to public, private and third sector applicants.

There are two funding types available as per the last round:

  • HNES revenue project grants to fund procurement or mobilisation of external support to carry out Optimisation Studies. These studies will assess heat network projects to identify causes of sub-optimal performance and recommend costed intervention or improvement measures; and
  • HNES capital scheme grants to part-fund the delivery (supply, installation and commissioning) of eligible intervention/improvement measures.
Read more about the scheme

How Can FairHeat Help You Secure Funding?


FairHeat have extensive experience in performance analysis of existing heat networks. By carrying out performance analysis of more than 80 operational heat networks, FairHeat have developed a process for assessing the performance of a heat network using operational data and site inspections.

In 2020, through the Heat Network Optimisation Opportunities programme, FairHeat were selected by BEIS to deliver business cases for improving and decarbonising ten existing residential heat networks. These heat networks ranged from 80 to 1,000 dwellings and spanned public, private and ESCO sectors. Focusing on the use of heat meter and BMS data, root cause analysis was undertaken resulting in the identification of performance improvement opportunities. A financial appraisal was carried out and a business case was presented back to Sponsors to carry out an informed investment decision. Improvement options with short paybacks were provided for all ten projects and key heat network operators have begun implementing the proposals which have demonstrated immediate performance improvements in line with FairHeat’s analysis.

FairHeat also have extensive practical experience in implementing the analysis as they have carried out retrofitting of over 20 existing heat networks, from producing original Stage 2 heat network designs to project management of retrofit works.

Our team of experts worked on 10 Heat Network Optimisation Opportunities (HNOO) projects. This was the precursor to the HNES demonstrator scheme and we worked closely with BEIS to establish the key requirements of the HNES demonstrator scheme.

In 2021, through the Heat Network Efficiency Scheme (HNES) Demonstrator, FairHeat were selected by BEIS to carry out a high number of optimisations studies and capital funded grants projects.

Our specialist Operations team consists of dedicated and experienced engineers with extensive experience in optimising performance of existing heat networks. The team supported a range of clients (private, local authority and housing association) to apply for optimisation studies and capital works projects. Of the 33 applications FairHeat supported, 100% successfully received funding.

The total amount of funding awarded to our clients was around £2.8million out of the budgeted £4.175million.

More broadly, the company has an in-depth knowledge of heat networks, having worked on over 300 heat network projects in the UK, including direct experience with performance improvement projects for operating networks (both HNES and more specific works at Client requests).

HNES Applications


Our specialist Operations team have supported a range of clients, for the last five years, with over 50 government funding applications. 100% of applications submitted have been successful in securing funding.

In order to produce a successful application, we will work with you to ascertain the current performance of the network and set out any known sub-optimal performance issues. This will be achieved by gathering the required heat network data and performing calculations to determine metrics such as pump energy, network heat loss and network efficiency.

For any Capital Works applications, we will set targets for heat network performance by modelling the potential performance improvements that could be achieved through interventions. We will also use our internal database of costing or contractor costs to produce a realistic anticipated spend that will be used to set the grant application value.

HNES Optimisation Studies

Revenue Grants & Optimisation Studies

FairHeat has worked on numerous optimisation studies through the BEIS funding scheme for a range of public, private and ESCO heat networks.

From a high level, the following tasks are conducted within an optimisation study:

  • Detailed site based audit of all elements of the heat network – gathering information and performance data on plant room, network and dwelling components
  • Technical assessment of site audit and data gathered to determine optimal efficiency optimisation opportunities and address the root causes of sub-optimal performance
  • Development of full business case including detailed financial analysis using FairHeat’s internal pricing benchmarks or Contractor pricing to evaluate cost/benefit of the proposals
HNES Capital Works

Capital Improvement Works

FairHeat has delivered and supported many capital improvement works projects.

After improvement opportunities have been identified, we have been involved at every stage of capital works improvement projects, from initial design support and tender reviews through to delivery and verification of works on site.

FairHeat can offer support on the following:

  • Providing retrofit design (scope of works and full Stage 3 Plus design)
  • Quality assurance of contractor tender responses/costs, contractor proposals, installation and commissioning, as well as project management support
  • Delivery of works on site as the Principal Contractor with a team of subcontractors

Are you interested in our services?


Other network issues

I’m looking to retrofit,decarbonise or assess thedesign of heat network.

I need support with theoperation and maintenanceof your heat network

I’m interested in evaluatingthe performance of yourheat network portfolio