Heating Hexham: Unlocking Low-Carbon Heat for the Future

The feasibility study is starting to show that Hexham has a path to a cleaner, more affordable energy future. With the potential for Heating Hexham to be a pioneering district heating project in the UK. A project that would deliver low-carbon, cost-effective heat to homes, businesses, and public buildings.

The project continues to explore the feasibility of capturing waste heat from local industrial processes, such as those at EGGER, as well as potential heat sources from Northumbrian Water. By tapping into local, sustainable energy sources, the project could provide a reliable, lower-cost alternative to fossil fuels—helping to reduce emissions, lower energy costs, and support local jobs.

Project Progress & Timeline

The Heating Hexham project is moving forward, with feasibility work nearly complete. Commercialisation activities, subject to funding, could begin later this year.

Anchor loads have been identified across the town and letters of support for the scheme have been provided by EGGER, Northumbria Healthcare and the Green New Deal Fund.

Options for the most cost effective route have been developed, and are likely to include a new river and rail crossing for pedestrians, connecting up active transport routes in the town as a bonus.

Funding & Financial Outlook

Heating Hexham would be a significant (£48 million+) infrastructure project. A project that would be financially sustainable and deliver affordable low carbon heat for the town.

We are developing a financing strategy that combines regional and central government funding, installation fees, and private sector investment, including:

• The Green Heat Network Fund (GHNF), the Borderlands Deal, and the Green New Deal Fund (GNDF).

• Industrial, residential, and commercial customers covering installation and connection costs for their buildings. Fees would be similar to the costs of replacing existing, end of life, fossil fuel heating systems.

• Patient private sector debt finance.

The immediate focus is to secure Phase 1 funding.

Phase 1 (2025-2028)

The first phase of the project would have a budget of around £30 million. Detailed Design and Planning activities would ideally start towards to the end of 2025, in order to get 'Heat On' in 2029.

Funding discussions are ongoing with the Green Heat Network Fund, the Green New Deal Fund, and an expression of interest has been submitted to the Borderlands Energy Investment Programme. Debt financing options are being explored with commercial banks and the National Wealth Fund. Our preferred strategy is to limit borrowing until the network is operational and generating revenue. Helping to keep costs low and operate the scheme as not for profit venture.

Why This Could Be a Game-Changer for Hexham

Heating Hexham represents a transformational investment that would:

• Deliver heat that is competitively priced against gas and heat pumps, making low-carbon heating accessible for everyone. 

• Shield residents and businesses from volatile fossil fuel prices.

• Add nearly £2 million to the Hexham economy each year, once the scheme is operational.

• Reduce emissions by 4,266 tonnes of CO₂ each year.

The long-term vision is to scale the network across the town and provide the opportunity for as many Hexham residents as possible to connect to the scheme, securing even greater efficiencies and positioning the town as a national leader in sustainable heat infrastructure. Hexham could be the blueprint for economic growth and decarbonisation of rural towns across the country.

This is a bold ambition. But one that has already been achieved in other countries like Denmark (see here https://hotcool.dbdh.dk/view/1002887005/4/).

How You Can Get Involved

To make this project a success, we need as many people and organisations as possible to express interest in joining the next stage of work. The more expressions of interest we have, the more demand we are likely to generate and the lower the cost of heat for everyone.

Please share this blog with anyone living in Hexham.

Email projects@snz.org.uk to learn more and express your interest in the project.