The National Wealth Fund has today announced financing for Hull City Council’s district heat project, which will provide low-carbon, reliable heat to buildings across the city centre.
Phase one of Hull District Heat Network (HDHN), a cheaper alternative to other decarbonised heat solutions such as individual Air Source Heat Pumps, will service council properties, educational establishments, development sites and residential properties.
It will also provide a return for the council over the lifetime of the project, by providing affordable, clean energy to buildings, which will allow money to be allocated to other services. This represents a major step forward in Hull’s ambitions to become carbon-neutral by 2030 and net zero by 2045.
HDHN is the second local authority heat network to be backed by the NWF and directly supports Government ambitions to decarbonise the UK’s building stock – currently the second largest contributor to carbon emissions after transport. The council also benefited from the NWF Local Authority team’s advisory service which supported the development of a strong financial plan for the project.
It is funded through a £15m grant from the Green Heat Network Fund, via Triple Point, £1.5m of Levelling Up Partnership funding and a £27m loan from the NWF which will be repaid through the operation of the network, representing a major investment into Hull’s future.
It will generate heat using heat pumps from an energy centre in Hull city centre for which planning permission has been secured and construction work will soon begin.
A series of underground pipes will supply the clean, renewable heat which will improve air quality, provide opportunities for new green energy jobs and create an environmentally friendly city.
HDHN will deliver an estimated 110,000 tCOe of carbon savings over 40 years, providing a significant contribution to Hull’s net zero targets.
Chancellor of the Exchequer, Rachel Reeves, said:
We are investing in Britain’s renewal, and this National Wealth Fund loan will heat buildings across Hull with clean energy, open up new jobs in green energy, and strengthen the city’s energy security. This is just one of billions of pounds worth of investments being announced today at our Regional Investment Summit, reversing decades of underinvestment and decline, slashing red tape to open up opportunities for businesses and kickstarting economic growth in every corner of the UK.
Lorna Pimlott, National Wealth Fund Managing Director, Local Authority Function, said:
Hull District Heat Network will provide affordable, low carbon energy, helping to cut council emissions on the path to net zero. We’re pleased to support projects such as this which have a crucial role to play in tackling climate change while helping to create jobs and deliver growth across the area.
Minister for Energy Consumers Martin McCluskey said:
Heat networks will play a vital role in our clean power mission, helping to deliver low-cost, low-carbon heating. This project in Hull will not only help deliver that, but will also generate savings for the local council, putting more money back into local services for the community.
Cllr Charles Quinn, the council’s portfolio holder for environment, said:
Hull District Heat Network is an ambitious project which reaffirms the council’s commitment to become carbon neutral by 2030 and net zero by 2045. It will provide sustainability for city centre council buildings in the long-term, as well as scope for expansion on demand in the future. Delivery will create employment and investment opportunities in Hull, really boosting the local economy.
Construction, operation and maintenance of HDHN will be completed by Vital Energi who will deliver £3m worth of community benefits, including utilising local supply chain.
Vital Energi will also provide school and college workshops, site visits, work experience placements, training for educators, apprenticeships and apprenticeship awareness sessions, voluntary organisation support and skills development for the council’s internal workforce.
Vital Energi has a strong track record of delivering complex district heating networks, including schemes such as Leeds PIPES, Queens Quay Heat Network and Torry Heat Network.
It already has a presence in Hull through its Hull MAGIC project which, when complete, will recover waste heat and deliver heat and hot water through underground pipes to homes and businesses in the region.
Andrew Wightman, regional director at Vital Energi, said:
We are proud to partner with Hull City Council on such a progressive project. The development of Hull District Heat Network will provide low-carbon, reliable heat whilst driving economic growth through job creation and investment in education across the Hull area.
Decarbonising heat is a crucial step in achieving Hull City Council's goal of becoming carbon neutral. With our expertise and existing presence in the city, we are well-positioned to deliver Hull’s ambitions.
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