The £19.1 million funding announced comes from the government's £320 million Heat Networks Investment Project, which supports the development of heat networks across England and Wales.
The money will be used to set up five new heat networks in Bristol, Liverpool, London and Worthing.
Heat networks use heat from a central source to consumers, such as large rivers and heat from sewers via a network of underground pipes carrying hot water, and act like a large central heating system that provides heat to multiple buildings. This is more low-carbon and cost-effective than installing individual heating systems such as boilers.
The current heat networks provide around 2% of heat demand, but could grow to around 20% of demand by 2050.
There are several government funded heat networks being developed including:
Minister for Climate Change, Lord Callanan, said:
"Almost a third of all UK carbon emissions come from heating our homes and addressing this is a vital part of tackling pollution, driving down bills and reducing our reliance on costly fossil fuels. Today's announcement builds on our commitments made in the Heat and Buildings Strategy to regulate the UK's heat networks, protect consumers, and create opportunities for green jobs and investment across the country."
To ensure consumers have a reliable source of heat and fair prices, the Office of the Gas and Electricity Markets (ofgem) have been appointed as the heat networks regulator. Ofgem will be responsible for enforcing rules and guidance on pricing and quality of service while facilitating the growth and decarbonisation of the market. Citizens Advice will also be appointed as the consumer advocacy body.
Jonathan Brearley, chief executive of Ofgem, said:
"We welcome the government's announcement that it will appoint Ofgem as the new heat networks regulator. Heat networks can play a key role in reducing carbon emissions from heating and helping to achieve the country's climate goals.
We will work with the government to design a regulatory framework which attracts the investment needed while ensuring heat network consumers, especially those in vulnerable circumstances, receive a fair price and reliable supply of heat for their homes as we make the transition to net zero."
The government has also committed that legislation to regulate the sector will be introduced soon.
