Energy firm pledges £100m for new city-wide heat network

Energy firm 1Energy has pledged £100 million of private capital for a city-wide heat network in Derby, a project forecast to create and support hundreds of jobs.

The move follows the business securing £23 million of investment into the project from the UK Government.

1Energy’s ‘Derby Energy Network’ aims to cut city-wide gas demand by about seven per cent.

It will supply the city with low-carbon heating via underground hot water pipes, using water source heat pumps to repurpose surplus heat from local businesses.

1Energy said it could invest more than £140 million into the network as it grows.

The firm pledged its initial investment to the project at an event held earlier this month at Derby Museums’ Museum of Making, which was attended by city leaders.

Andrew Wettern, chief executive of 1Energy, said: “Derby has long led the world in terms of innovation, from water networks to defence.

“We are delighted to bring long-term investment to the city and build on its rich industrial heritage, enabling leading businesses to play a key role in delivering a new utility model.

“Home to world-renowned innovators, Derby is uniquely placed to lead the transition to a more secure energy future.”

Major organisations in the city, including Derby City Council, the Royal Derby and Florence Nightingale Hospitals, the University of Derby and Derby College Group, are working with 1Energy to advance the network, with plans to begin construction in 2026.

Andrew said: “Alongside transforming the city’s energy infrastructure, the Derby Energy Network will give businesses greater choice and long-term price certainty.

“All while unlocking economic, health and environmental benefits for the city, the region and the country.

“We are excited to continue working with Derby’s trailblazers to develop the network.”

The Derby Energy Network is designed to enable the city to bolster energy security, cut costs for businesses and protect against sudden gas-related energy price hikes, with buildings being warmed by low-carbon heat rather than gas boilers.

Additionally, businesses such as Rolls-Royce and SmartParc could soon be linked up via the project.

It is projected to save about 20 tonnes of air pollutants that can cause respiratory problems – equivalent to taking 16,000 cars off the road for a year – by cutting pollutants from connected buildings by around 86 per cent.

The network also expects to reduce carbon emissions by 19,200 tonnes through slashing emissions from buildings by up to 77 per cent.

Baggy Shanker, MP for Derby South, said: “The Derby Energy Network represents a huge opportunity for our city to deliver another cutting-edge project, continuing our long-standing leadership on innovation.

“By combining private capital and public investment, it will bring hundreds of millions of pounds into Derby. I see it playing a key role in boosting economic growth.

“It is great to hear the project will also create hundreds of skilled local jobs, including apprenticeships. As a former apprentice myself, I know first-hand how transformative they can be.”

Councillor Carmel Swan, the city council’s cabinet member for climate change, transport and sustainability, said: “This is brilliant news for our city.

“1Energy’s £100m investment in low-carbon heating will mark a transformative step forward for Derby – not only in our mission to tackle climate change by cutting carbon emissions, but also in fostering healthier, more resilient communities.

“This initiative will help to keep homes and buildings across Derby warm in a more sustainable way while delivering wider benefits, from improving air quality and reducing fuel poverty, to enhancing public health and wellbeing.”

Phil Lovell, chief operating officer at SmartParc, said: “At SmartParc, we are pleased to be working with 1Energy Group, to jointly explore opportunities to provide low carbon heat to the Derby Energy Network.

“Collaboration opportunities offer greater scope to harness the work we’re already doing at SmartParc for the benefit of the wider city.

“By harnessing innovative technologies and shared values, we’re contributing to a cleaner, greener Derby while supporting businesses and organisations across the city in their transition to net zero.”