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Greener buildings

The UK is leading on the development of technologies and construction principles for a more sustainable built environment.

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The UK has set a target of net zero carbon emissions by 2050. Making buildings more energy efficient through modern construction methods and circular economy principles, and moving away from fossil-fuel boilers, are key to industry meeting this target. This transition is being driven by the cross industry C02nstruct Zero programme. This was set up to remove carbon from the UK construction sector and provide a consolidated action plan, clear targets and a single ambitious vision.

Opportunity highlights

The breadth of the opportunity in the UK is enormous and spans industrial and residential new build and retrofit markets, with a key focus on sustainable construction and heating. In Q4 2019, the UK had the second largest construction output in Europe.

Heat networks

The heat network project pipeline is valued at £1.2 billion and growing. This represents a significant early investment opportunity across distribution, generation, storage, controls and customer interface. For example, across Bristol, the most populous city in southwestern England, a network of underground pipes that will deliver affordable, low-carbon heat and energy being installed as part of Bristol’s commitment to become carbon neutral.

Heat pumps

As part of the UK government’s commitment to cleaner energy, 600,000 heat pumps are to be installed every year by 2028. The UK is keen to expand its manufacturing base in this technology. Companies like Mitsubishi Electric are paving the way with their Ecodan residential heating system manufacturing plant in Livingston, Scotland, providing energy efficient hot water and heating for radiators and underfloor heating.

Sustainable design and construction

By adapting circular economy principles, using sustainable materials for construction, and embracing digital technologies, the construction sector can play its part in reaching the UK’s 2050 net zero target.

An example of sustainable design and construction opportunities is the Timber Square net zero carbon scheme in London, where the aim is to be the largest commercial development in the UK to use cross-laminate timber. Timber Square’s use of innovative construction techniques and ethical materials demonstrates a significant milestone for the wider construction community and sustainable development.

Commercial maturity

As part of the UK government’s £500 million Heat Networks Transformation Programme, the Green Heat Network Fund (GHNF) will tackle some of the most prominent barriers to decarbonisation of heat networks.

Heat pumps are likely to play an increasing role in the decarbonisation of the UK heating sector. This is creating opportunities for heat pump manufacturers, as well as innovators in biomass boiler systems, combined heat and power systems, hydrogen boiler systems and solar thermal panel manufacturing.

Key UK assets

About 14,000 UK heat networks provide 2-3% of the UK’s heat, but the UK government wants them to supply about a fifth of the UK’s heat by 2050. To achieve this, early investment opportunities have been identified:

North East and Tees Valley

A pioneering low-carbon cluster with more than 20 potential heat-network schemes identified so far, at an estimated total value of £280 million. Significant opportunity exists to use natural resources and deploy low-carbon heat technologies in the region.

Manchester

A district heat network (DHN) project was awarded £14.6 million in funding and is set to become one of the largest and most diverse decentralised energy networks in the UK. It will deliver decarbonised, lower cost heating and electricity to stakeholders.

R&D capability

The £4 million Clean Growth Innovation Fund will be used to invest in projects that decarbonise, digitise and decentralise energy and help achieve a sustainable transition to cleaner energy.

Eleven projects have been launched to decarbonise heating and cooling and are supported by a £14.6 million investment from the Engineering and Physical Sciences Research Council (EPSRC) and the Natural Environment Research Council (NERC).

The UKRI transforming construction challenge is investing £170 million to accelerate the shift in construction towards sustainable manufacturing and digital processes and a value outcome approach.

The Construction Innovation Hub has been tasked with changing the way buildings and infrastructure are designed, manufactured, integrated and connected in the built environment.

R&D centres across the UK

Other heat network R&D centres across the UK provide solutions to some of the industry’s greatest challenges. These include the National Centre for Energy Systems Integration (CESI), the North East Centre for Energy Materials (NECEM), the H&C Zero Network, the Energy Systems Catapult and the UK Energy Research Centre.

Business and government support

The Heat and Buildings Strategy will set out decarbonisation plans to help the UK meet its net zero target.

The UK government expects to publish a market framework for heat networks in 2022 that aims to increase private investment.

To future-proof new buildings and avoid costly retrofits, the UK will seek to implement the Future Homes Standard and consult on increased standards for non-domestic buildings, so new buildings have high energy efficiency and low carbon heating.

The UK Green Building Council (UKGBC) has also developed a framework definition for net zero carbon buildings, making it more accessible for companies to enter the sector.

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Case study

BEIS Heat Investment Vehicle

The Department for Business, Energy and Industrial Strategy (BEIS) will establish a dynamic purchasing system (DPS) for heat networks: BEIS Heat Investment Vehicle (BHIVE). It will allow public sector heat network owners and developers in England and Wales to procure funding and funding-related services for heat network projects from potential funding providers.