Project Development Funding

There are significant challenges at the pre-capital stage of heat network project development in Scotland, such as a lack of skills, knowledge and resource. The Heat Network Support Unit (HNSU) is designed to help overcome these challenges and rapidly develop the heat network pipeline.

For projects at the pre-capital stage, the HNSU can offer the following grant funding: 

  • Up to 100% of a detailed feasibility study up to a value not exceeding £50,000. Applicants have the option to utilise either their own consultants or consultants appointed under the Zero Waste Scotland Feasibility Framework.
  • Up to 50% match funding for Outline Business Cases up to a value not exceeding £75,000. It is expected that successful applicants will procure their own consultants for this stage.
  • Commercialisation costs, with the amount of funding determined on a case-by-case basis. Funding may be supported through the HNSU or Scottish Heat Network Fund depending on the project’s stage.

Funding is available to all successful applicants to the HNSU fund. In situations where financial support is unavailable or unsuitable, support in the form of advice or guidance may be available. 

To receive a copy of the application form and guidance, please contact us at

Proposals are welcome from new low or zero emission heat network projects. They must be able to evidence:

  • a lead organisation identified, with an identified lead officer(s), and evidence of organisational commitment to developing the opportunity;
  • project location, i.e. a project layout; and
  • heat off-taker(s) and potential anchor loads identified.


It is anticipated that eligible projects will demonstrate the following qualities:

  • ability to demonstrate a contribution to delivery of ambitions to decarbonise Scotland’s heat demand at scale;
  • ability to demonstrate compatibility with Scotland’s Heat in Buildings Strategy and the relevant local authority’s Local Heat and Energy Efficiency Strategy (LHEES);
  • the potential to have a positive and significant social and economic impact on Scotland;
  • the potential to have a positive and significant impact on skills and supply chain in Scotland;
  • ability to demonstrate additionality, i.e. the need for grant support from the Heat Network Support Unit, including clear evidence of any funding gap to develop the project to the relevant next stage;
  • ability to provide confirmation of sources of funding/finance that will contribute towards the final capital delivery costs of the project;
  • ability to demonstrate organisational commitment to the project at Director level or above; and
  • ability to demonstrate organisational commitment to the Fair Work criteria.


Desirable criteria that may have the potential to be demonstrated by eligible projects:

  • demonstrate clear plans for community and consumer engagement;
  • demonstrate a potential for replication and an intended route to commercialisation [should demonstration prove successful or a plan for integration into business as usual]; and
  • demonstrate that the organisation seeks to build internal capacity to support the future delivery of heat networks.


  • Alignment with the relevant local authority’s LHEES (if applicable) and/or the local authority’s heat network ambitions
  • The project is a designated heat network zone, as stipulated in Part 3 of the Heat Networks (Scotland) Act (if applicable)
  • Alignment with any areas that have been subject to review (in accordance with Section 47 of the Heat Networks (Scotland) Act) and that were considered particularly suitable for the construction and operation of a heat network, but were not taken forward by the local authority for designation (if applicable)
  • Provision of completed appraisal form
  • evidence of the ability to secure other sources of funding/finance that make a minimum of 50% contribution towards the project’s initial capital costs;
  • provision of feasibility study with recommended option that the project is financially viable and technically feasible; and
  • ability to demonstrate that the project will provide heat at an affordable cost to consumers and support the alleviation of fuel poverty (if applicable)

We welcome applications from local authorities and other public sector organisations. Applications from social housing organisations will be considered on an ad-hoc basis. Any other organisations seeking support should contact in the first instance.