GUEST COLUMN:
Channa Karunaratne
District Energy Market Lead
AECOM
Every so often a policy decision comes along that changes the conversation and, for heat networks in Wales, this is one of those moments.
According to Wales’ Heat Strategy, heat accounts for around 50% of the country’s energy use, yet more than 85% of Welsh households still rely on fossil fuels for heating. Transforming how Wales heats its homes and buildings is therefore one of the country’s biggest infrastructure challenges and opportunities. Investment in cleaner, home-grown sources of heat will not only be critical to meeting net zero by 2050 but can also reduce Wales’ exposure to volatile global fossil fuel prices, strengthen energy security and, ultimately, help deliver more stable and affordable energy bills over time.
Against that backdrop, the UK Government's decision to extend the Green Heat Network Fund to Wales for the first time is more than another funding announcement. Coupled with the Warm Homes Plan, which commits £1.5 billion to heat networks over the next four years and continues support for the Green Heat Network Fund, it signals that low-carbon heat is finally being recognised as a national infrastructure priority rather than a niche technology.
The latest Green Heat Network Fund round is now open, with local authorities, NHS bodies, universities, businesses and charities across Wales all eligible to apply. For years, organisations have identified opportunities to develop heat networks, but too often the funding has not been there to move projects beyond the drawing board.
The question now is whether Wales can create networks that grow over time and become part of the country's long-term energy infrastructure.
Wales already has the heat
The idea behind heat networks is simple – heat is generated in one place and carried through insulated underground pipes to nearby buildings. As technology develops, the source of that heat can change without every connected building having to replace its heating system, making the network more efficient over time and able to adapt.
Wales is well placed because much of the heat it needs already exists. Heat from former coal mines, rivers, industry and wastewater treatment works is currently wasted, but heat networks can capture and distribute it as a reliable, low-carbon, low-cost, secure local energy source.
That potential is already being recognised in local energy planning across Wales. Flintshire, for example, has identified the potential for heat networks to meet around a third of total heat demand by 2050, while Cardiff has identified potential for around a fifth.
That matters for reasons beyond decarbonisation as recovering local heat reduces dependence on imported fossil fuels and helps shield communities from volatile energy markets. It also creates infrastructure that can serve thousands of buildings over its lifetime.
Cardiff is already demonstrating what that future could look like. Its district heat network captures surplus heat and distributes it across Cardiff Bay. Cardiff and Vale College is already connected, while buildings like the Senedd and Scott Harbour are joining the network. Crucially, the system has been designed so that additional heat sources can be added over time, showing how today's investment can continue delivering benefits for decades.
Think beyond the first project
The Cardiff scheme highlights an important lesson that the first connection is only the beginning because the real value comes as the network expands.
A hospital or university may provide the demand that makes a project viable, but homes built later can connect without entirely new infrastructure so every extension increases the return on the original investment while allowing more communities to benefit from lower-carbon heat.
The Leeds PIPES heat network followed a similar path, beginning with a relatively small number of buildings before expanding as more customers joined. Cities and towns in Wales do not need to copy Leeds, but it should adopt the same long-term thinking.
That requires coordination and leadership from the outset. Planning policy must safeguard future pipe routes, ensure new developments can connect as networks expand and prevent opportunities to capture waste heat being lost. Creating the right conditions for these projects to succeed now will help more communities access secure, affordable and low-carbon heat in the future.
It is also worth remembering that heat networks take time to deliver and large schemes can spend years moving from feasibility to construction, which is exactly why this funding matters now. The projects entering development today are the ones that will still be supplying heat well into the middle of the century.
Wales has the natural resources and government support is beginning to match the ambition so the challenge now is to seize this moment and build connected heat networks that become the backbone of a cleaner, more secure energy future for the country.
