UK Government launches £1.5bn fund to boost low-carbon heating networks

SEOUL, 25 SEPTEMBER 2026 —

The UK government has committed £90 million (US$119 million) to accelerate the rollout of low-carbon heating networks, targeting over 750,000 households in England and Wales as part of its push to decarbonise urban heating systems by replacing fossil fuel boilers with centralised, low-carbon alternatives.

The funding marks a significant step in the UK’s transition away from individual gas boilers, leveraging district heat networks that utilise surplus heat from industrial sources, data centres, and energy-from-waste facilities. The initiative aligns with broader global trends, including established systems in Copenhagen, Vienna, Seoul, and parts of China, where large-scale heat transmission mains have proven effective in reducing emissions and improving energy security.

The Department for Energy Security and Net Zero (DESNZ) has already allocated £53.1 million to two major projects under the Green Heat Network Fund (GHNF), administered by Triple Point. The largest grant, £41.6 million, has been awarded to the London Strategic Heat Main, a project led by RHN Developments, a subsidiary of the Cory Group. Of this, £1 million will fund commercialisation efforts, while £40.6 million will cover construction.

A separate Riverside Heat Network has received £11.5 million for construction.

The London Strategic Heat Main will span over 25 kilometres, extending from Cory’s Riverside Campus in Belvedere, Bexley, into central London. It will serve seven boroughs—Bexley, Greenwich, Lewisham, Southwark, the City of London, Lambeth, and Westminster—with potential expansions into Barking and Dagenham, Tower Hamlets, and Kensington and Chelsea. The network aims to displace gas boilers in connected buildings, cutting heating-related carbon emissions by 95% while eliminating nitrogen oxide emissions from boilers.

RHN estimates the project could unlock £5 billion in additional investment in local heat networks and create jobs in tunnelling, engineering, and river logistics.

Until permanent tunnels are completed, the scheme will use electric thermal barges to transport heated water along the Thames, delivering it to insulated tanks on pontoons. Services are expected to begin in 2028, with plans to develop some pontoons into public "Thames Floating Gardens", though final approvals are pending. Cory, which operates an energy-from-waste facility at the proposed Belvedere energy hub and a river barge fleet, will oversee the barge operations.

The project’s scale and ambition have drawn comparisons to established European and Asian heat networks, with proponents arguing that such systems enhance energy security by reducing reliance on volatile gas markets—a concern exacerbated by recent geopolitical disruptions, including Russia’s invasion of Ukraine and tensions in the Middle East.

The UK government’s funding follows a broader push to modernise heating infrastructure, with the GHNF’s new Strategic Heat Main category specifically targeting large-scale transmission projects capable of serving multiple demand centres.

For Malaysia and regional markets, the UK’s initiative offers insights into how advanced economies are structuring decarbonisation efforts, particularly in urban areas where energy efficiency and emissions reduction are critical. While Malaysia’s own energy transition—focused on renewable integration and gas-to-power projects—differs in scale and context, the UK’s approach highlights the potential of district heating networks to combine industrial symbiosis with urban sustainability.

The project’s reliance on surplus heat from data centres and waste-to-energy plants may also resonate with Malaysian policymakers exploring similar synergies, particularly in industrial zones like Johor’s Iskandar Malaysia or Penang’s Free Industrial Zone, where waste heat recovery and energy efficiency are increasingly prioritised.

The UK’s funding announcement follows a period of heightened global energy price volatility, with the London Strategic Heat Main explicitly framed as a mechanism to shield consumers from gas price shocks. For Malaysia, where domestic gas prices remain a policy-sensitive issue—particularly amid fluctuations in global LNG markets—the UK’s model could serve as a case study for diversifying heat supply chains.

However, the project’s reliance on extensive tunnelling and river logistics presents logistical challenges that may not directly translate to Malaysian urban landscapes, where infrastructure constraints and land-use patterns differ.

The next phase for the UK’s Green Heat Network Fund will focus on scaling similar projects across England and Wales, with the London Strategic Heat Main serving as a blueprint for future strategic heat mains. The timeline for full operationalisation—currently set for 2028—will determine the fund’s immediate impact, though early indicators suggest strong private-sector interest, particularly from firms like Cory, which stands to benefit from both infrastructure development and operational revenue streams.

For regional observers, the project’s success will hinge on its ability to balance cost efficiency with emissions reduction, a dual challenge that Malaysian energy planners are also navigating in their own decarbonisation roadmaps.