Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: April 30, 2025

Purpose:

Content: 11.1 Sheffield is a participant in the Department of Energy Security and Net Zero’s (DESNZ) Advanced Zoning Programme, which aims to; ·       Identify the opportunities for accelerating the scale and pace of zonal heat network delivery with cities ·       Support the acceleration of zonal scale heat network delivery, aligned with emerging zoning policy ·       Capture lessons learned, establish standardised outputs and provide feedback for policy development from key stakeholders.   This paper; ·       provides an update to the TRC Policy Committee on the Advanced Zoning Programme (AZP), an overview of the AZP reference project and Zonal Outline Business Case, including the submission of a grant funding application to the Green Heat Network Fund (GHNF); ·       seeks approval to proceed to the development of the procurement process utilising the AZP’s route to market models developed by DESNZ; ·       seeks delegated authority to the Director of Investment, Climate Change and Planning to take a decision on the route to market once further legal and commercial work has been undertaken through the AZP.     11.2 RESOLVED UNANIMOUSLY: That the Transport, Regeneration and Climate Policy Committee:-   (a)  notes the update on the Advanced Zoning Programme (AZP) and conclusions of the Zonal Outline Business Case (ZOBC);   (b)  notes the update on the grant funding submission to the Green Heat Network Fund (GHNF) of £10m and approve acceptance of the grant, if successful, under the Grant Memorandum of Understanding (MOU) terms of which the funding is expected to be given;   (c)  delegates the power to finalise the Grant MOU to the Director of Investment, Climate Change and Planning, should the grant application be successful;   (d)  approves commencement to next stage of the AZP to procurement of a Development Partner; and   (e)  grants delegated authority to the Director of Investment, Climate Change and Planning to determine the route to market strategy for the procurement of the Development Partner of the AZP reference project and wider zonal area opportunity.     11.3 Reasons for Decision     11.3.1 Heat networks form a significant opportunity to decarbonise heat and as detailed in the council’s Growth Plan also provide an opportunity for green growth through jobs, skills and supply chain opportunities.     11.3.2 Continued participation in DESNZ’s AZP provides access to funded support, enabling Sheffield to be at the forefront of heat network developments and readiness for forthcoming heat network zoning legislation as well as contributing to the city’s decarbonisation.     11.4 Alternatives Considered and Rejected     11.4.1 Alternative Option 1: Do nothing Under this option, the council doesn’t prepare for forthcoming heat network zoning legislation and buildings remain on gas boilers. This option is rejected as it misses decarbonisation targets as well as negatively impacting on local air quality. In addition, jobs, skills and supply chain opportunities are missed. Under this scenario, the council also loses any support and guidance that the participation in this programme to date has offered.     10.4.2 Alternative Option 2: Heat pump roll-out Under this option, connecting buildings to new or expanded heat networks are not considered priority and instead heat decarbonisation is achieved through the roll-out of heat pumps. This option is rejected as the Heat Network Zoning policy is based on designating zones where heat networks provide the lowest cost route to heat decarbonisation compared to air source heat pump, so whilst for some buildings heat pumps may offer the best solution, over the proposed zonal area it is considered that heat networks provide the best option for heat decarbonisation.