A £1bn low-carbon heat distribution system in central London will be delivered by a joint venture (JV) between power specialists Vital Energi and Hemiko.
The pair, operating as the Swan Partnership, will fund, build and operate the South Westminster Area Network to capture waste heat from local sources and pump it into buildings. This will include parts of the London Underground network (from Victoria to Temple station), the River Thames and the capital’s sewer network.
Heat will be distributed through a network of insulated subterranean pipes filled with hot water.
Construction of the South Westminster Area Network is expected to start in 2026, the JV announced yesterday (6 November).
Consultancy Aecom is providing network design support.
Over time, the project is expected to save 75,000 tonnes of carbon dioxide every year, equivalent to removing 40,000 cars from the road. It is also planned to create 500 jobs, improve local air quality and create opportunities for businesses.
Adam Hug, leader of Westminster City Council, said: “The council has been actively supporting the government through the early stages of this pioneering network and will now take on a principal role to ensure that the project delivers the best outcomes for our residents and businesses.”
Hemiko chief executive Toby Heysham said the heat distribution market “offers an investment potential the size of the UK offshore wind industry. Steps like this show that the UK heat networks market is open for business”.
Blackburn-based Vital Energi increased its turnover by 7 per cent in the year to 30 June 2023, from £209m to £224.4m. Pre-tax profit was slightly up at £4.8m compared to the previous year’s £4.5m.
Hemiko’s turnover grew from £17.4m to £17.7m in its latest accounts for the year to 31 March 2023. But the Carlisle-based firm saw its pre-tax profit worsen from £79,000 to £5m.
Its chief strategy officer Nick Gosling said: “Heat networks are the most cost-effective way to decarbonise our densely populated cities. The Government’s heat network zoning regulations, introduced last year as part of the Energy Act, have now created the right market conditions for private sector investment.”
The government said last month that it is providing £5.8m in early-stage funding to develop similar schemes in Bristol, Leeds, Plymouth, Sheffield and Stockport, as well as one other in London.
Construction on all these projects is expected to begin in 2026.
