Anthony Coates Smith, Managing Director of Insite Energy
The rapid rise in the number of heat network installations in the UK both contributes to and masks serious problems. According to the Heat Trust, the majority are only 35-45% efficient, when this should be closer to 65-70%.
As well as jeopardising the nation’s net zero targets, this concerning situation is putting the entire sector in a perilous position.
Lagging behind
One key issue is that the pace of market growth, stimulated by government policy, is outstripping the country’s capacity to provide experts to design, operate and maintain these highly complex systems. Like a luxury car, a heat network needs skilful and consistent servicing to optimise its performance and ensure its reliability and longevity.
Heat network technology has evolved enormously in recent years. It’s now much greener and more efficient, with far more emphasis on digitalisation and data. Used effectively, modern data-driven tools can generate vast improvements in efficiency, sustainability and cost-effectiveness.
However, smart technologies are still vastly underused by UK heat network operators, which almost certainly helps to explain why many systems perform so poorly here. It’s very different to other British industries such as finance, retail and manufacturing, where digitalisation has transformed businesses in recent years. It also contrasts with other European countries with more evolved centralised-heating sectors.
Wayfinders
As heat network specialists, we should show leadership in applying proven intelligent data-centric approaches to enhance efficiency, improve reliability, reduce costs and lower carbon emissions. We can also help heat network operators use technology to change consumer behaviours, boost engagement and improve customer experience.
But how does that look in practice? Let me share some notable examples.
One major UK sector innovation has been KURVE, the first web-app specifically for heat network residents on pay-as-you-go billing, launched in 2019. It lets users monitor and manage their energy consumption and pay for their usage quickly and conveniently anywhere, from any internet device.
By offering a quality of customer experience and functionality that banking customers, for example, have benefitted from for years, KURVE is encouraging a sector-wide shift towards more resident-centric service provision and sustainability. Energy use in KURVE households drops by 24% on average, thanks to easy access to real-time consumption data. Furthermore, analysis of KURVE data is informing and improving industry best practice around sustainability and user experience, benefitting even non-users.
Another important development was the 2023 introduction of motivational tariffs to the UK market. This European practice is a form of variable pricing, rewarding heat network users that look after the heating system in their homes, often positively impacting the energy efficiency of the entire network. It directly tackles the ‘What’s in it for me?’ issue inherent in communal heating systems, whereby customers’ heating bills are affected by their neighbours’ actions as much as their own.
Motivational tariffs have been highly effective in Denmark, where heat networks supply 64% of homes. In the UK, we’ve seen lower bills for 81% of residents and a 600% increase in engagement with necessary activities such as equipment-servicing visits.
Digital simulation
A third example of impactful use of data technology is digital twinning. Creating an accurate virtual replica of a heating system’s hydronic design can greatly help to tackle poor performance. A heat network is a vast ecosystem of interdependent components; any intervention can have unintended consequences system-wide. Digital twinning allows you to try things out virtually without the expense, risk or disruption of real-world alterations.
Real-life examples where twinning has been used include the optimisation of the heat network supplying Kew Gardens’ green houses, and the prevention of a huge, ineffective engineering project at a 190-unit London apartment building. However, the approach has yet to gain real traction in the UK heat network sector.
Smart start
I’m glad to say, though, that many data-driven technologies are now widely used with great results. Smart meters, monitoring systems, and pay-as-you-go billing give residents real-time data and better energy control. Smart systems monitor plant rooms and networks, detecting faults, reducing inefficiencies and adjusting to demand. And cloud-based services are enabling remote diagnostics or even repairs, cutting costs and improving efficiency.
In future, we can expect more use of integrated heat source optimisation, where dynamic monitoring selects the lowest-cost, lowest-carbon option in real time. Big data visualisation will also likely make performance monitoring clearer and more effective. With housing associations and local authorities managing heat networks alongside other priorities, tools that make complex data digestible are invaluable – both for operators and customers.
AI may well be increasingly deployed, too, to support smart information services. However, it will never replace humans with chat bots. The recent energy and cost-of-living crises have highlighted the need for authentic, empathetic customer interactions when it comes to essential services like heating.
This article appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.
