Why are we seeing more interest in heat networks in 2026?

In this episode - one of three looking at heating options for Future Homes Standard Homes - Chris speaks with Ed Levein, Business Development Manager at Rendesco, and Jon Ponting, Future Homes Standard Policy Lead at AES Sustainable Consultants.

Welcome to the Future Homes podcast where we look closely at the ideas, policies and practical challenges shaping how homes are being designed, built and delivered in the UK today.

My name is Chris Gaze.

This episode is one of a set of three looking at heating options for future home standard homes.

This time we're looking at heat networks.

Our guests are Ed Levien, Business development manager at Rendesco Rendesco Design, build and fund heat pump and battery storage systems and Jon Ponting, future home standard policy leader, AES Sustainable Consultants doing all things sustainable and built environment.

And we'll kick off by asking Ed, why are we seeing more interest in heat networks at this time?

The future home standards just prompted a thinking process with what is the move away from gas?

A lot of people have made the move already to air source heat pumps and there are other options out there and they're asking what they could be, they're hearing heat networks out there, it's wider world and trying to work out whether they would work for them, what it means to them, what it might cost, how it benefits them, their clients, etc.

Etc.

Initially it's looking at them as an option and then it's sort of once they understand the benefits of them for their particular projects, then taking that forward and going right, yeah, this is right for me.

This is right for my target client who's going to be buying my apartment or my house, whatever it might be.

A lot of what we do as a business is an information piece.

It's just giving developers information to compare and contrast against what they might be doing.

Already there are still developers installing gas on legacy sites.

The forward thinkers have made the move to air source and they're thinking what comes next?

And air source ticks a box.

But how can I make, how can I get, how can be better?

How can I make everything that Jon inputs into his software?

How can I, how can I maximize that to make my house more salable or whatever the driving force might be?

Okay, and broadly speaking, are there many different types of heat networks in what we do?

There are two.

Your sort of traditional centralized network with a plant room and distribution pipework to heat interface units in every property.

And the sort of more popular or gaining more popularity in what we're doing is the ambient or decentralized or fifth generation heat networks where you have a ground source heat pump and each property connected to an ambient network in the ground that is then in turn connected to a heat source.

95% Of what we do is that's those are boreholes.

But it could be waste Heat from a supermarket, it could be, could be for an air source heat pump on the roof.

But we're a ground source LED business so there are different options.

They offer advantages to different types of projects.

They behave differently when Jon puts them into his software.

So we need to understand what the client requirements are and help them navigate through the compliance which is getting stricter and stricter.

And Jon, are you seeing more inquiries from your clients with regards to networks?

We're in that really interesting point that, that transitional time when we know that approved document partner is changing.

We know there are new targets in there.

We know that the kind of the headline rules about you won't be able to use fossil fuel heating systems and you must have some way of generating electricity on site.

So developers are coming to us, coming to the SAP assess and, and just saying, right, what alternative solutions are out there?

What do we have to do?

As Ed has said previously, there are some developers who are still working with individual gas boilers.

Some developers have already moved over to heat pumps.

So there are these different conversations going on.

But I think really it's down to the personal preference.

It is down to which developer.

What have they done historically, what are they open to exploring in potential future developments and also what kinds of developments they're working on.

Are they working on smaller rural sites where traditionally you wouldn't expect to find heat networks or shared systems or are they working in urban areas dealing with high rise because that's kind of where ambient loop systems and fifth generation systems kind of, that's where they come into their own.

I think we're also seeing the soft advantages of heat networks in terms of against the counterfactual of air source heat pumps being no external plant.

So you don't have a piece a box on the side or the rear of your house that generates noise, cold air.

In some smaller sort of developments with smaller gardens it can take up, it can be quite a large part of the, the back garden sitting next to the terrace, back door.

And so that is those, those softer benefits which might help help salability down the line.

It might improve the street scene, whatever it might be.

It's not just necessarily the technical compliance, it's also those softer benefits.

Okay, great Jon.

I mean your world has been a world of SAP up to now.

We've got the HEM model coming in, the home energy model.

Do you see that changing the way that we think about heat networks?

Is it going to shake things up a bit?

Do you know, I would love to be able to answer that question.

Yes, it's certainly going to shake things up a bit, but quite how we're going to be shook up, I can't answer at this stage because HEM hasn't been fully implemented yet.

As assessors, we're going to have far more buttons to play with, far more settings, far more information we can feed into HEM so that the forecasting it creates is more accurate.

One of the issues we've always had with SAP when it comes to heat networks is it just asks very basic questions and we're very limited on what we can feed into it to get the compliance reports out of it.

So I am very much looking forward to seeing how that's going to change with hem.

It is certainly a brave new world.

I know there's a bit of nervousness in our industry just about this massive shift, retiring, SAP, moving into something completely different, but I'm optimistic that when it comes to new technologies and more complex designs of heating systems, I think HEM is really going to step up and show us what SAP should have been doing for years.

So watch this space.

Definitely.

Yes.

For the big reveal.

Okay.

And I know also you're very keen to make sure everybody's aware about Energy Performance certificates and them changing, because I think we've probably all been a little bit distracted.

So what are we going to see there and does that have any implications for the sorts of things we might be choosing to do?

Well, yes, and thank you for mentioning this as well, Chris, because as you say, I've been trying to promote this, but there's so much other noise at the moment.

Quite rightly so.

Future Home Standard is a big change and there's lots of other things going on.

But, yes, Energy Performance Certificates in the next two to three years, they're going to look completely different.

When we transition away from SAP to using the home energy model, we're not going to have that single metric EPC anymore, that A to G rating for a house.

It's going to be split into different categories.

So you'll have one that just looks at the insulation standard, one that just looks at the heating system.

But that's the proposed at the moment.

Anyway, final details to be confirmed.

I say that a lot, but, yeah, there is expected to be an 8G metric that just looks at the heating system, so that is going to encourage not just developers of new buildings, of how do we get those A and B ratings, but it's also going to make people who are living with older heat networks.

Just to take notes, my new EPC is telling me I've Got an F rating for my heating system.

Why is that?

So it's going to start this conversation, but at the moment it's just trying to raise awareness that this is going to happen and it's not a long way away from being.

We're going to see these new EPCs rolling out.

Yeah.

I mean, and it's going to be interesting.

Is it?

Because often, often we may make trade off decisions between, you know, potentially between fabric and heating systems or vice versa or whatever and suddenly you're going to get a rating on all on each element.

That's going to change the way we think about stuff, which is going to be going to be a big difference.

Okay, so that's a little bit about the background about making the choices for developers and what they're going through there.

Ed, I wanted to ask you about what is, what's the customer experience like here?

I mean, what do they actually see?

We know they're not going to have an air source heat pump sitting at the back of the house, but what do they see physically at their end with both scenarios that you've talked about and how do they interact with that?

Again, it depends on the type of network.

So you're the fourth generation centralized networks, you would see a heat interface unit in the property that is akin to a gas combi boiler, hot hug on the wall, tucked in a cupboard somewhere.

And with a fifth generation ambient heat network, you would see a ground source heat pump in the property sort of replacing the external air source heat pumps.

I think what's really key to stress is that residents shouldn't need to understand the complexity of whatever they're connecting to.

It is the surety of supply that they're getting for the heat or the ability to be able to take heat out of the network is key.

Like I say, you've lost all of the external plants, you've lost your flue, you've lost your gas boiler.

And it just comes down to thinking of heat as a utility, more of a utility than a standalone heating system.

You have on the ambient networks, you pay a standing charge to be connected to the network, much like you pay a standing charge to have a connect to the gas or water.

And for your centralized network, you, you have a heat meter much like you have a gas meter and you pay for the amount of heat you take out of the network.

So I think we have to try and simplify things from a consumer point of view.

They understand what they're getting, but have the comfort that there's a lot going on behind the scenes to make sure that what they're getting is priced right.

They're protected in terms of ongoing maintenance and running of the system, getting the right custom support.

So there's a lot of things going on behind the scenes with OFGEM and Heat Network Technical Assurance scheme that is giving consumers the protection.

And all they need is heating and hot water and coolth as long as that is clearly available to them and they don't understand how to use it.

I think the transition away from gas or air source heat pumps is seamless.

It's just a different way of getting that heat or coolth into the building.

And can you tell us a little bit more about the role of OFGEM and the heat Network technical Assurance scheme?

When do they come into play and how does that support consumers?

OFGEM came in this year, they took over from the Heat Trust.

That was the voluntary scheme previously.

So OFGEM sort of give that sort of regulatory backstop, consumer protection and step in rights, etc, etc.

There are still things being developed as part of that.

It's not a fully finished system.

And then the heat networks technical Assurance scheme is ongoing.

And a lot of that is about the design, the implementation and then the ongoing running of a heat network.

And that's more applicable to the centralized networks than the decentralized.

The decentralized is a much simpler offering.

There's no plant externally to the properties.

The heat pumps remain in the properties.

The consumers control, how they turn on the heat pumps, who they buy electricity from, whether that's coming from a dynamic tariff and their solar and a battery, and they're really driving down the cost of heat.

That's one of the huge advantages of the fifth generation networks.

So it is a moving landscape.

OFGEM just provides an official stamp that again provides consumer confidence that what they're buying into is regulated rather than the voluntary scheme.

That was very good, but some people question it as voluntary.

So the OFGEM taking that over and taking on the mantle is only a positive thing.

And with hot summers, we've talked about the wonderful thing coolth.

I love the concept of coolth, but how does that work and how much cooling can be achieved?

So cooling is best delivered from the fifth generation networks, the ambient networks.

So the schemes we're building are connected to boreholes in the ground.

So we're taking heat out the ground to provide heating and hot water during the heating season and hot water throughout the year.

But we can turn the heat pump around and take heat out of the building and dump that excess heat back into the ground.

There are advantages to do that in certain geologies and in terms of sort of storing that heat for later use in the heating season.

But in terms of delivering coolthe into the building, there are two types of cooling.

There's sort of active and passive cooling.

Passive cooling is what I probably refer to more as air tempering rather than cooling.

And then your active cooling is your replacement.

For air conditioning, we can deliver a source temperature of 6 degrees for whatever cooling system is in the property to be able to deliver that, whether that's by.

And that's traditionally via fan coil.

So there's a change in how you might design your system.

So take from, for example, we're delivering the ambient heat network at Welborne Garden Village down in Hampshire.

Every house built there will have cooling in the bedrooms and that's delivered by fan assisted sort of fan core radiators in the bedrooms.

So that blows air over a heat exchanger in a radiator type casing, because cooling is best delivered by the movement of air rather than underfloor heating or a passive radiator.

So there are some slight changes required, but we can deliver as much cooling or as little cooling.

And we'll always start with passive cooling and then change to active cooling.

But in the hot summer, we've had one of my colleagues, he's got the passive cooling installed in his house as a retrofit.

It was 35 degrees outside and inside it was 22 degrees.

Okay, well, yeah, I mean, very comfortable at 22.

Jon can just bring you in on this.

I mean, as a consultant in this area and doing saps and hems and all sorts of other things.

I think traditionally we've always been very shy of the whole idea of.

And this isn't air conditioning, this is something else.

But what impact does cooling have in your calculations?

And Jessica, reality is different from calculations.

What impact does it have environmentally?

Well, if we start with SAP calculations, there are a few buttons in SAP that allows us to enter a cooling system, but it is incredibly basic.

And the reason for that is because SAP the foundations.

When SAP was designed, this was a good 20, 25 years ago.

It was unheard of that we'd ever imagine having some kind of cooling system in a house.

So SAP was never designed with that in mind.

We do now have these little buttons that we can put in, like the efficiency of a cooling system and which rooms it can provide cooling to.

Personally, I would say that it's not very advanced.

It's based on quite a lot of simplified methodology.

Because of that, it doesn't really impact the calculations.

When we're creating a SAP calculation, if we're told there's a cooling system there, then it doesn't do much to the calculation quite often.

If it's one of these, if it's a system where, as Ed's just been describing, a primarily heat driven system which can also provide cooling on the off chance, the current approach we're taking is just to ignore those in the SAP, because SAP's just not really geared up to fully understand how one system can do both heating and cooling at the same time.

Again, it will be different when we move into hem, this brave new world that I keep banging on about with hem, because we're going to have that extra detail, we're going to be able to put in multiple different systems, it's going to understand new technology far better and it's going to be giving us far more accurate forecasting for how a house is expected to require energy through summer.

Okay, right.

Okay, well that's really useful.

I didn't know any of that, so that's great.

Ed, just in terms of understanding your role and the role of companies like yourselves vis a vis the developer who owns the network and how is it installed and maintained.

So how does it fit into the development program and the post development world?

So the projects we're involved in, we own the network.

So we design, build, adopt and operate, maintain that network in perpetuity going forward.

So we are a fully integrated business and we're able to offer the funding to housing, to developers for the networks and then we adopt them going forward and operate them.

And the billing for the standing charge to be connected to it or the heat usage in a centralized system comes from us and we're in charge of taking that forward.

I think consumers need to understand that heat networks are long term utility infrastructure.

And when developers are picking a company like us, the challenge isn't just building the system, but it's in operating it for decades to come.

So it's clear understanding of what's included, what's not included, who does the maintenance, is it in house, is it subcontracted?

And all these sort of things do make a difference.

And how is the network monitored?

Is that reliant on someone going into a building and looking at some meters, or is that actually connected to a smart platform that is dialed into and can send notifications to an O and M team sitting wherever they are in the country and reacting or being proactive with introducing sort of AI into things I think that's the sort of due diligence developers should be doing.

It's not just what's this shiny box of a Heat Network that you can deliver.

But it's okay, you have the competency to design it, you have the competency to install it, but you also have the competency to maintain it and stay within the statute requirements for that period.

And that ongoing management is all covered in the, in the Heat Network Technical Assurance scheme, I assume, is it?

Yeah.

And that, that guides, that's guidance on what happens when, you know, because companies, some, some companies start, companies finish, but the network goes on.

And that, that covers all of that to give.

Give consumers and developers the confidence they need, presumably.

Yeah, from my reading of it, it's sort of.

I'm not sort of.

I wouldn't.

It's sort of.

As I said, I'm an expert on exactly what's coming down the line with it.

But in overview, it requires us as a owner and operator networks to maintain a certain amount of data on the network, so that if, if we were to cease trading for whatever reason, we're not going to, but if we were, then there is that information for others to come in and adopt it and run it.

So all these things should be seen as a positive.

Probably there are going to be some, some teething issues with any introduction of new regulation, but overall it should be seen as a positive.

Okay, brilliant.

Now, this is the point when I like to.

I like to pretend that I have the power to grant you wishes.

I'm going to grant you a bit of a power trip, really.

There's one wish each.

What's the one thing you would like listeners to this podcast to take away from today's conversation?

And I'll start with you, Jon, and then I'll go on to Ed, I think.

Okay.

To take one idea away from what we've been discussing, there are a lot of changes happening in a very short space of time.

So we've already mentioned about the future home standard and Partel we've mentioned about.

EPCs are changing.

We're expecting to have a consultation coming out in the near future about Parto changing the legislation around overheating, which could be.

Could then look at integrating cooling more into building regulations.

I don't know, it's not been released yet.

I'm second guessing but there's a lot of stuff coming down the line that says very quickly, just don't be scared of it.

A lot of people I think in our industry fear change.

And like for me as a SAP assessor, I know there's a lot of people in the SAP world who are looking at the home energy model and very uneasy about just how radically different it's going to be.

But don't worry about what's coming along the line.

Yes, there are some big changes, like the big step away from fossil fuel, far more larger requirements for on site electricity generation.

Yeah, we know the headlines.

We just need to get into the nitty gritty and it's all going to work out.

Everything's going to be okay, everything will be fine.

That's what I love to hear.

We've got Ed on our team, so.

You know, okay Ed, what's the one thing you'd like us to take away as a business?

Rendesco.

I think we do both networks, but we're seeing a real sort of interest in the ambient heat networks.

And I think modern ambient ground source heat networks are fundamentally different from many legacy communal heating systems which might have got a bad rep in the past.

Our ability to be able to provide asset value funding against the networks reduces the capital cost to developers.

Cost is king in the house building world, especially with the headwinds that they see at the moment.

So if we can offer a future homes compliant solution for less than the cost of air source heat pumps with all of the added benefits, the soft benefits that we've touched on previously, when you're comparing against air source or other technology, the ability to be able to offer cooling to integrate with your solar, your batteries, I think it is a much more enhanced offering.

And if I can just piggyback on what Ed was saying there just.

I know I'm saying that it's all going to work out okay, but one of the biggest questions we're being asked at the moment with this move to the future home standard is what are the most viable options in terms of cost, in terms of practicality, in terms of what's available technically.

So yeah, there are going to be some leaps that we have to make as a construction industry.

Future home standard is going to cost more for developers.

It's a question of how we mitigate that.

It's a question of how we take on board of the overheating elements.

All the other sections are building regulations that we've not discussed today because we're just looking at one volume of all of the burden regulations.

Everything needs to stack up, doesn't it?

So I'm confident that we'll find a happy place for building in years to come.

Ed and Jon, that was brilliant.

Thank you so much for joining us on the podcast.

Thank you.

Thanks Chris.

Thank you.

Thanks for having us.

Thanks once again to Ed and Jon.

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