Strategic Innovation Fund

HeatNet

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What the project is about How we’re doing it What makes it innovative What we’re learning

Project Data

Start date:

03/01/2024

End date:

03/31/2025

Budget:

£683,598

Summary

HeatNet is developing new tools to support the electricity network in managing the energy used by heat pumps and enabling coordinated smart home heating.

What is the project about?

As we work towards achieving Net Zero, it’s essential to transition away from fossil fuels for heating our homes. The UK government has set a target of 600,000 heat pump installations per year, aiming for around 15 million installed by 2050.

This shift will significantly increase demand on the electricity network, so we need smart, efficient tools to help manage that demand and maintain a reliable energy supply. Traditionally, networks respond to rising demand by upgrading infrastructure. However, the HeatNet project is taking a different approach.

HeatNet is exploring the development of a service that allows groups of heat pumps to work together to balance demand and manage voltage across the network. This would be especially useful in areas like new housing developments or clusters of social housing.

How we’re doing it

HeatNet is exploring how Artificial Intelligence can optimise the use of heat pumps to manage localised peaks in electricity demand and keep voltage within safe limits. For instance, if a customer wants their home to be 20°C by 6pm, the system might preheat the home slightly earlier to a comfortable temperature. By doing so, the demand is spread out over time rather than peaking all at once, helping to balance the load on the network.

This approach is being tested across a variety of settings — rural and urban areas, new builds, and retrofitted existing homes. We’re also comparing this smart, AI-driven method with the traditional approach of upgrading physical infrastructure, to assess which is more efficient and cost-effective for supporting the network.

In parallel, we’re examining the types of business models that could support this shift. This includes looking at potential incentives for customers to participate, as well as the regulatory frameworks that would need to be in place.

What makes it innovative

HeatNet is an innovative solution aimed at enabling the widespread installation of heat pumps without the need for costly upgrades to the electricity network. While existing smart control systems can remotely manage distributed energy resources, HeatNet goes a step further by applying machine learning to optimise the control of local groups of heat pumps based on real-time capacity and voltage constraints. This kind of targeted, intelligent control has not been done before.

Our innovation focuses on two key areas:

  • Technical: How can we use existing network data to better manage electricity demand and maintain grid stability by intelligently controlling heat pumps?

  • Commercial: What new business models can be developed to ensure customers benefit from participating in these services?

What we’re learning

HeatNet is helping us understand the opportunities and challenges of creating a service that minimises voltage issues by automatically coordinating local groups of heat pumps. The project also aims to inform future policy, regulatory decisions and standards around the active management of low-carbon heating technologies.

During the Discovery Phase, HeatNet explored how smart controls could enable greater deployment of heat pumps without the need for costly infrastructure upgrades, by improving efficiency and reshaping electricity demand.

In the Alpha Phase, the project focused on developing a more accurate voltage drop matrix aligned with a definitive distribution network model. A key finding was that voltage drop is a more significant issue than previously expected, particularly in urban areas and new-build networks. However, optimisation and coordination of heat pumps demonstrated clear benefits:

  • 18–30% reduction in peak demand

  • 25–39% reduction in voltage drop

The project also modelled wider benefits for the energy system, forecasting savings of over £3 billion across Great Britain by 2050.

Market analysis identified two primary use cases for a service like HeatNet:

  • Low voltage (LV) networks in new-build housing developments, often managed by Independent Distribution Network Operators (IDNOs). From 2025, these are expected to see over 200,000 heat pump installations per year

  • Large-scale retrofits in high-density social housing estates, where significant uptake is also expected over the next decade.

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