Improving your Heat Network's Performance

Health Checks, Optimisation Studies, Performance Improvements & Funding

Data is Your Ally

Measuring efficiency isn't abstract - it's based on clear, trackable data. Think of it as a health check for your entire system - uncovering hidden inefficiencies, benchmarking performance and giving you a roadmap to improvement. For property managers, this means you don't have to rely on gut feel or wait for resident complaints. You can quantify performance, spot the weak points, and make changes before they spiral into bigger issues.

Efficiency under HNTAS will be measured against six core KPIs. Think of them as the scorecard for your network - covering everything from generation losses in the plant room, through distribution losses in corridors, right down to how accurately residents are billed.

Once you know the numbers, the path forward becomes much clearer. Optimisation studies - usually carried out by specialist engineers - show where performance is slipping. And crucially, small, cost-effective tweaks (like balancing flow rates, tightening controls or insulating distribution pipework) can often yield huge improvements.

This is where data becomes your ally. Accurate metering and monitoring feeds into benchmarking, so you can compare your network against others and demonstrate compliance when Ofgem asks for evidence.

Key takeaway: Optimisation isn’t optional anymore. With Ofgem and HNTAS, efficiency is measurable, reportable and enforceable.

PMs who get ahead now can protect residents, control costs and build confidence in their networks.

When should you do an Optimisation Study?

At handover: to confirm the system is performing as designed.
Before regulatory deadlines: staying ahead of Ofgem’s rollout avoids costly last-minute fixes.
When efficiency drops: rising complaints, unexplained cost increases, or data showing poor performance are all red flags.
As part of long-term planning: embedding optimisation into your asset strategy helps protect value and future-proof compliance.

The most accurate way to assess efficiency is through metering data - comparing energy purchased to energy delivered.

With metering data:

Engineers analyse all aspects of metering data (including temperatures, flow rates, kWh etc.), highlighting losses and opportunities for improvement.

Without metering data:

Thermodynamic modelling by engineers can provide an estimate, though it’s less reliable.
System inefficiency can be identified through physical indicators, e.g. excessive heat loss in communal areas which may point to control issues or distribution losses.

Real-life Example

If you’re buying £100 of energy and only £40 reaches residents, that means £60 is being wasted. Not only does this drive up resident bills, but it also undermines trust and increases the risk of regulatory intervention.

Health Checks vs Optimisation Studies - What’s the Difference?

Both Heat Network Health Checks and Optimisation Studies support compliance and better outcomes for residents, but they look at different types of risk and go to different levels of technical detail. They are often used together, at different stages, to build a clear and proportionate improvement plan.

Heat Network Health Checks

A Heat Network Health Check is a non-intrusive assessment that confirms whether a scheme’s documentation, metering and billing arrangements are fit for purpose and aligned with consumer protection requirements.

It focuses on:

compliance of documentation, contracts and customer information
metering arrangements and data quality that support fair and accurate billing
evidence needed to demonstrate consumer protection compliance
a high-level review of the heat network installation

As part of the Health Check, the system’s performance is also reviewed at a high level, helping to highlight practical opportunities to improve efficiency or reduce risk.

Health Checks are designed to:

provide confidence that consumer protection obligations are being met
identify gaps in evidence, process or governance ahead of regulatory scrutiny
indicate whether deeper technical investigation is justified, or whether ongoing monitoring is sufficient

For many Property Managers, a Health Check is the right starting point, offering clarity without the cost or disruption of detailed technical investigation.
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Health Checks vs Optimisation Studies - What’s the Difference? (cont.)

Optimisation Studies

An Optimisation Study is a detailed and intrusive technical assessment of a heat network, focused on how the system is designed, operated and performing in practice.

It involves:

physical inspection and detailed analysis of plant, controls and distribution systems
assessment of system design against technical standards and best practice
identification of root causes of inefficiency or underperformance
development of design-level, costed improvement options

Optimisation Studies are typically used to:

address persistent performance or efficiency issues
support and justify capital investment decisions
demonstrate compliance with technical and performance requirements, alongside consumer protection outcomes

Where required, HNES revenue funding can cover up to 100% of eligible optimisation study costs, making this a practical next step once a clear technical need has been identified.

How They Work Together

A Health Check often provides the evidence and confidence needed to decide whether an optimisation study is required, and whether HNES funding is appropriate.

This staged approach:

avoids unnecessary cost and disruption
targets technical investigation where it adds real value
supports both consumer protection compliance and long-term system performance

At a Glance

	Health Check	Optimisation Study
Type of compliance	Consumer protection & governance	Technical & design-level performance
Level of technical detail	High-level, non-intrusive	Detailed, intrusive
Main focus	Billing, metering, documentation, evidence	Plant, controls, distribution, system design
System inspection	High-level review	Physical inspection and detailed analysis
Typical questions	Are we protecting residents and meeting regulatory expectations?	Why is the system underperforming and how do we fix it?
When to use	Early assessment or compliance review	Persistent issues or before capital works
Funding	Typically client funded	HNES funding may cover up to 100%

Further reading:

The Importance of Heat Network Optimisation Studies

What is HNES?

The Heat Network Efficiency Scheme (HNES) is a government grant programme designed to help existing heat networks move away from “business as usual” and towards better performance, efficiency and evidence.

It allows networks to investigate issues, improve performance and plan next steps without placing the full financial burden on operators or leaseholders. It helps to:

reduce inefficiency and heat loss
improve system performance and reliability
support better outcomes for residents
build evidence for investment and regulatory planning

Funding is released in multiple rounds through to 2027–28, covering both revenue and capital projects. Current rounds are open for applications.

Funding availability and timings are set by government and may change. Always check the official HNES guidance before planning an application.

Who’s Can Apply?

HNES funding is available to organisations responsible for, or managing, existing heat networks, including public bodies, private operators, landlords and managing agents.
Applicants must be a legal entity able to commit to delivering the project. Individuals cannot apply.

Types of Funding

Revenue Grants – Optimisation Studies

For most Property Managers, the most relevant part of HNES is the revenue funding for optimisation studies. Revenue grants can cover up to 100% of eligible study costs.

Optimisation studies are independent technical reviews of how a heat network is performing. They typically:

analyse current performance, energy use, plant and controls
identify inefficiencies, risks and performance gaps
provide a report with costed and prioritised improvement options

These studies help to create clear evidence for system improvements, justify future capital investment and support technical compliance and long-term planning. Key points to note:

funding is often available before any capital work is committed
where capital funding is later sought, applicants usually need to fund at least 50% of the project cost

Capital Grants - Physical Improvements

HNES capital grants support the delivery of physical improvements that improve efficiency and performance.

Capital grants typically cover up to 50% of eligible project costs.
The remaining funding must be provided by the applicant or another source.

Eligible capital works can include:
•    plant and pump upgrades
•    distribution system improvements
•    insulation and efficiency measures
•    controls and automation upgrades

Capital funding must be supported by clear evidence, often from an optimisation study.

Next Steps

Optimisation Study Providers

HNES-funded optimisation studies must be delivered by suitably qualified, independent specialists. Applicants should always confirm provider eligibility and ensure the scope meets HNES requirements.

Providers commonly used for this type of work include:
•    Fresh Heat Networks
•    Fairheat
•    Heat Network Delivery Consultancy (HNDC)

Need Help Deciding What’s Right for You?

If you’re not sure whether a Health Check, an optimisation study or HNES funding is the right next step, we can help.

We work with Property Managers to:

assess compliance and performance risks
identify whether technical optimisation is actually needed
support HNES funding decisions and next steps
coordinate with trusted technical specialists where required

Get in Touch

HNES: The Upgrade Path Every Heat Network Needs

Insight by Tharina Conradie, Associate Director - HNDC

Right now, most operational networks weren’t designed with today’s standards in mind. High return temperatures, aging HIUs, missing data, and resident complaints are common, and they all cost money, time and reputation. HNES is specifically designed to help you close these gaps.

What HNES Is

HNES provides government funding to diagnose and fix inefficiencies in existing networks.

Think of it as a structured route to move from:
Firefighting → Understanding → Optimising → Performing.
It covers both revenue funding (studies and audits) and capital funding (physical upgrades). If your network is struggling with temperature control, heat loss, billing issues or resident complaints, HNES is the fastest route to improvement.

Why It Matters (Right Now)

This Playbook shows just how fast regulation is shifting and how intensely Ofgem will scrutinise data, reliability and efficiency (see regulatory timelines on p.32–34.

HNES is not a “nice to have”. It is your head start.

With Ofgem introducing:

Authorisation (Jan 2026 registrations)
Guaranteed Standards of Performance
Consumer protection rules
Data visibility expectations

…operators will need to evidence performance, not just claim it. HNES gives you the diagnostics and upgrades needed to be regulation-ready, before the regulator arrives.

Tharina is an experienced heat network consultant specialising in commercially viable, low-carbon energy projects across the UK. With a background in business development and strategic delivery, she supports public and private sector clients from feasibility to implementation, combining technical insight with a pragmatic, collaborative approach to accelerate net-zero infrastructure.

Who Can Apply

HNES is open to organisations responsible for operational/existing heat networks:

Local authorities
Housing associations
Private freeholders
Developers holding legacy networks
ESCOs / management companies

If you manage a portfolio of blocks, you can apply for several sites in one programme.

What HNES Does / Key Benefits

HNES helps you fix the issues you know about, and the issues you don’t yet see.

Revenue Funding (Studies)

Network performance diagnostics
Hydraulic modelling
Temperature optimisation
Metering audits
Data flow analysis
Resident impact assessments
Prioritised upgrade roadmap

These form the evidence base for compliant, defensible decisions.

Capital Funding (Upgrades)

Pump and control optimisation
HIU replacement
Pipework insulation upgrades
BMS and sensor improvements
Return temperature reduction projects
Flow balancing
Data logging and monitoring
This is where complaints reduce, efficiencies improve, and costs stabilise.

HNES turns insight into intervention, and intervention into measurable performance.

If your heat network is underperforming today, HNES is your opportunity to put it right, to turn risks into resilience, and performance into proof - before Ofgem regulation makes performance a legal requirement.

Tharina Conradie, HNDC

How to do it

KPI	KPIs focus
Start with evidence	Collect meter data, system temperatures, complaints logs and maintenance records.
2. Identify the pain points	If residents are unhappy, bills seem inconsistent, or plant performance is unclear, you already have your case.
3. Apply for revenue funding to carry out the optimisation study	HNES revenue funding is your first gateway: it finances the diagnostic work needed to understand your network and create a defensible upgrade plan. Evidence → Revenue Funding → Optimisation Study → Upgrade Pathway
4. Commission an optimisation study	This is the backbone of a successful HNES capital application and aligns directly with the “Optimisation Studies” approach in the Playbook (p.19).
5. Build a costed improvement plan	Link every intervention to a measurable benefit, lower return temps, reduced losses, improved reliability.
6. Apply with a clear narrative.	HNES assessors want a straightforward story: Problem → Evidence → Intervention → Outcome.
7. Deliver, measure, and monitor.	The data you generate post-upgrade will form your compliance evidence package under Ofgem.

Further Resources

HNES is the single most effective way to improve network performance, cut inefficiencies, reduce complaints and build a compliance-ready heat network without placing the full financial burden on leaseholders.

If you’re responsible for an operational network today, HNES is your opportunity to turn risks into resilience, and performance into proof.

Need help with your application, reach out to the HNDC Team at info@hndc.co.uk

Every network is different - so is the right level of review.

Whether you’re planning a full Optimisation Study or just want an affordable Health Check to benchmark performance, we can help you take the next step.

Discover your Health Check options

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In this article from d-Analysed, Daniel explores why so many heat networks operate below their potential - and what can be done about it. The article, The Importance of Heat Network Optimisation Studies, looks at how regular technical reviews help bridge the gap between how systems were designed to perform and how they actually do.

Daniel explains the role of both full Optimisation Studies and tiered Health Checks in achieving that balance. Optimisation studies provide the detailed, specification-level analysis needed for long-term planning and investment, while Health Checks offer scalable, structured insight - from baseline compliance to continuous performance monitoring.

Together, these approaches form a complete picture of network health, helping operators move from reactive maintenance to proactive management.

Read the article

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