Currently in the UK, building heating (residential heating, industrial heating, and hot water production) accounts for over a third (37 percent) of the country's CO2 emissions. Given the government's ambitious carbon reduction target, it is essential to offer innovative and environmentally friendly solutions for home heating.
In 2024, only about 3 percent of the UK's heating needs were met by district heating networks, but the government's target is to reach 20 percent by 2050 to support national decarbonisation goals. With this target, the UK's need for new district heating projects has never been greater, and the potential market value of district heating networks in the country is around £80 billion.
To meet growing demand, Veolia is actively working to finalise a portfolio of projects, worth a total of £1 billion for the Group, across the UK, including Wiltshire, London, Bristol, Yorkshire, and Cambridgeshire, which are expected to be awarded by 2030. This portfolio includes £210 million worth of projects already awarded by 2025.
Recent news from Veolia in this area includes the completion of the first phase of its "Southwark 2.0" district heating network (DHN) in south London - an extension of a network that currently supplies more than 2,500 homes with safe and sustainable heat in the long term, already saving around 8,000 tonnes of CO² annually . Once completed, the DHN network will supply nearly 7,000 homes in the capital with "surplus heat," produced by Veolia's waste-to-energy plant in Southwark, saving a further 14,000 tonnes of CO² each year. The second phase of the Southwark 2.0 project is expected to begin in March 2026, subject to regulatory approvals, and will see a further extension of the DHN.
Veolia has also been selected by Wellcome Genome Campus as a preferred partner to design and build a 5th generation heating and cooling network , which will recover geothermal heat as well as waste heat from a data centre.
The Wellcome Genome Campus is expanding its campus in Cambridgeshire from 50 to 180 hectares, aiming to become a global destination for leading institutes, companies and talent in the fields of genomics, biodata, health data and data science.
It is because of this immense growth potential that Veolia is investing in this sector and working closely with the UK government to promote the implementation of policies that benefit the market, the environment, and consumers. The policy changes needed now include:
Support for district heating networks through the UK Emissions Trading System (ETS) : Waste-to-energy facilities should be incentivised to supply local networks through reductions in ETS allowances for the provision of heat to communities, in order to encourage cleaner heat.
Long-term financing after the Green Heat Network Fund: longer-term financing mechanisms, going beyond existing subsidies, must be put in place so that heat network projects continue to develop in the UK and can continue to provide consumers with cheap, low-carbon heat.
Obligation to use the "waste heat" of buildings in heat networks: new buildings, and some existing buildings, should be required to connect to and use local heat networks, in order to ensure a stable demand for these systems once built.
“Veolia aims to be at the forefront of a new wave of district heating networks across Europe, and ultimately to become the number one district heating provider in Europe” said Estelle Brachlianoff, CEO of Veolia. “In doing so, we will pave the way for carbon-neutral heating and cooling, using a diverse range of energy sources and integrating AI-based smart controls and energy storage technologies to create the most reliable and flexible networks. To achieve this, we need financing mechanisms that offer certainty and stable regulatory frameworks in Europe and the UK.”
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