Net Zero News: 1Energy wins £17.6m funding for net-zero retrofit

Welcome to Net Zero News, where we bring you the latest developments driving the UK’s transition to a net-zero future. In a significant step towards the UK’s net-zero goals, low-carbon heat network developer 1Energy has today announced it has secured £17.6 million of UK government funding to deliver a city-wide heat network in Milton Keynes, with Milton Keynes University Hospital signed on as the anchor customer.

Net Zero News can reveal that the funding, awarded through the Department for Energy Security and Net Zero’s Heat Networks Investment Project, will support the creation of a low-carbon district heating network serving the hospital and expanding to other major heat users across the city. The announcement comes as 1Energy enters negotiations with several additional public and private sector organisations keen to reduce their carbon footprints.

This project forms part of Milton Keynes’ wider ambition to decarbonise heat and contribute to the UK’s legally binding net-zero emissions target by 2050. The proposed network will harness sustainable energy sources, including air-source heat pumps and waste heat recovery systems, to supply low-temperature hot water across a distributed pipe infrastructure. Technical studies undertaken by 1Energy indicate the system will achieve operating temperatures compatible with modern building standards while minimising distribution losses.

By integrating a mixed portfolio of renewable and recovered heat, the network aligns with the government’s Heat and Buildings Strategy and responds to the impending phasing out of high-carbon gas boilers. Net Zero News understands this forms part of the UK’s ambition to have at least 18 TWh of heat delivered by heat networks by 2050. 1Energy’s initiative is designed to exceed interim targets set in the Milton Keynes Local Plan and deliver a blueprint for future urban heat solutions.

The importance of this development extends beyond carbon savings. The network is projected to reduce carbon dioxide emissions by more than 10,000 tonnes per year once fully operational, supporting Milton Keynes University Hospital’s commitment to net-zero operations by 2035. Local modelling suggests the system will create upwards of 200 skilled jobs during the construction phase and sustain approximately 50 roles in operations, engineering and maintenance.

Key partners in the project include Milton Keynes Council, which has provided planning support, and the Department for Energy Security and Net Zero, which approved the grant funding. Private investors have already pledged over £78 million in capital to underwrite the network’s delivery, highlighting strong market confidence in low-carbon heat infrastructure. 1Energy has structured the model to combine public grants with private finance, de-risking early-stage investment and accelerating deployment timelines.

Net Zero News understands this forms part of a growing pipeline of heat network projects nationwide. The funding package will cover detailed design, network procurement and initial construction activities. Once construction begins in early 2026, the network is expected to be progressively commissioned between 2027 and 2029, with Milton Keynes University Hospital receiving first supply in the autumn of 2027.

This scheme sits firmly within the UK Government’s Net Zero Strategy and the recently updated Heat Networks (Metering and Billing) Regulations. By creating a replicable model that integrates multiple heat sources and customers, 1Energy is supporting the government’s objective to stimulate a commercial heat network market and drive down costs through economies of scale.

Communities across Milton Keynes can anticipate not only lower carbon emissions but also more stable heating costs, as the network shields end users from volatile fossil fuel prices. Local businesses and public institutions involved in the negotiations have expressed strong interest, recognising the dual benefit of sustainability and operational resilience offered by networked heat.

With groundwork due to commence next spring, 1Energy will host community engagement sessions to outline construction impacts and energy savings for prospective customers. Meanwhile, discussions continue with additional hospitals, universities and commercial estates to expand the network’s reach. Net Zero News will monitor these developments as the project progresses towards delivering a landmark low-carbon heat solution in Milton Keynes.

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