Veolia’s project pipeline is part of the company’s deployment of a new ‘Ecothermal Grid’ offering in the UK under which it plans to grow its district heating using a mix of different sources of energy, including from waste-to-heat plants.

Heat in buildings (heating up space, industrial heating and providing hot water) currently makes up over a third (37%) of the UK’s CO₂ emissions, according to Veolia. As of 2024, only around 3% of UK heat demand is met by district heating networks; however, the government target is for this to reach 20% by the year 2050 to support national decarbonisation goals.  

‘With this target set, the UK’s need for new district heating projects has never been stronger and the potential market value for district heating networks in the country is around £80bn,’ reports the company.

Veolia’s £1bn project pipeline will cover district heating initiatives across the UK, including planned projects in Wiltshire, London, Bristol, Yorkshire and Cambridgeshire. The programme includes £210mn of 2025 projects already awarded.  

For example, Veolia has completed phase one of its ‘Southwark 2.0’ District Heat Network (DHN) in south London. This is an extension to the DHN that currently supplies heat to over 2,500 homes, saving around 8,000 tonnes of CO₂ every year, according to the company. Once completed, the DHN will supply nearly 7,000 homes in the capital with ‘excess heat’ generated from the energy-from-waste plant that Veolia operates in Southwark, saving an additional 14,000 tonnes of CO₂ every year.

Phase two of the Southwark 2.0 project, which will see a further expansion of the DHN, is due to begin this month.

Veolia has also been selected by Wellcome Genome Campus in Cambridgeshire as its preferred partner to design and build a heating and cooling network, which will recover geothermal heat alongside waste heat from a data centre facility.  

Veolia says its sees ‘immense potential growth’ in district heating in the UK and is calling on the UK government to implement policies which it believes ‘will benefit the market, the environment and the consumer’.  

These policy changes include support for heat networks through the UK Emissions Trading Scheme (ETS), with energy-from-waste facilities incentivised to supply local networks through ETS allowance liability reductions for providing heat to communities.

Veolia is also calling for the development of longer-term funding mechanisms beyond existing grants to help promote the development of heat network projects in the UK.

It also proposes to require by law the use of waste heat from buildings on heat networks. (This ensures stable demand for such systems once built.)

Estelle Brachlianoff, Veolia Chief Executive Officer, said: ‘Veolia’s ambition is to be at the forefront of a new wave of heating networks across Europe, and ultimately to become the number one player in urban heating in Europe. In order for this to happen, we need – across Europe and in the UK – funding mechanisms that provide certainty, and stable regulatory frameworks.’

Heat networks could save UK tens of billions by 2050, says ADE

Meanwhile, the Association for Decentralised Energy (ADE) says heat networks could deliver billions in annual cost savings for the UK, ‘no matter how fast battery prices fall or how quickly they roll out’.  

According to its latest analysis, heat networks could save £3.46bn/y, with cumulative savings of £86.6bn by 2050. Even ‘modest deployment’ could save £1bn/y, rising to £6.45bn ‘if ambitious deployment is coupled with similar ambition across the energy sector’.  

The findings mean it would be £1bn/y cheaper to invest in heat networks over individual air source heat pumps, according to the ADE. ‘Crucially, in this scenario we also see £2.4bn a year in savings for the broader electricity system, including half a billion in annual distribution savings,’ it added.

The ADE says its analysis ‘is backed by government, industry and academic experts’. It found that ‘heat networks slash energy generation costs and require less investment than individual air source heat pumps in every scenario tested’.  

Freddie Wilkinson, ADE Senior Researcher, said: ‘The numbers don’t lie: heat networks are the solution. Whether we go big or start small, these systems cut costs, year after year. Heat networks are key to an energy system that pays us back. Every pound saved is a pound for schools, hospitals, or cutting bills. The faster we act, the faster we win.’