£90m data centre heat network plan: what it means for your bills

The government has unveiled a £90 million plan to pipe waste heat from data centres into homes, according to TechRadar, with 750,000 homes expected to get cheaper heating as a result.

What's being announced

Per the report, London, Manchester, Newport and Abergavenny in Wales, Solihull in the Midlands, and Bradford in Yorkshire will all benefit. The biggest single scheme is in London, where £41 million of the funding will help unlock £5 billion of wider investment to build a network distributing heated water drawn from a data centre's excess heat to 650,000 homes. TechRadar reports that, while the pipe network is being laid under the Thames, the project will initially rely on "electric barges" moving hot water 25 kilometres along the river each day into insulated riverside tanks — a detail TechRadar says has "drawn ridicule" online. Those barges aren't expected to start operating until 2028, and will run until the permanent underground system is finished.

Elsewhere, £9.7 million is going towards extending Bradford's existing heat network, which dates back to 2024, and schemes in Gorton and Levenshulme in Greater Manchester will replace old heating systems in social housing blocks. TechRadar notes that similar waste-heat schemes have run for decades in Copenhagen, Amsterdam, Vienna and Berlin. Local Energy and Jobs minister Martin McCluskey said the work is "reindustrialising the UK," with jobs created in construction, engineering and river transport alongside the heat network itself.

What it means for your costs

Heat networks like this only reach homes in the specific streets they're built along, so for the vast majority of homeowners nothing changes immediately — but the announcement is a useful prompt to look at what heating upgrades cost right now, and what's already funded.

If you're not on a heat network route. The main national scheme remains the Boiler Upgrade Scheme, which currently offers £7,500 off an air source or ground source heat pump in England and Wales (Scotland's equivalent, the Home Energy Scotland grant, offers up to £7,500 plus an optional £7,500 interest-free loan), provided the installer is MCS certified. A typical Air source heat pump costs £12,900 installed, against a range of £10,100 – £16,800, before that grant is applied. Installation also qualifies for 0% VAT on energy-saving materials, which runs until 31 March 2027, so the price you're quoted should already exclude that tax.

If you're keeping a gas boiler for now. A straightforward New boiler runs to £2,800 typically, with a range of £2,200 – £3,650. Like-for-like combi swaps sit at the lower end; converting a regular or system boiler to a combi, or fitting a smart thermostat, pushes costs up. Any gas work has to be carried out by a Gas Safe registered engineer — it's illegal for anyone else to touch it.

Insulation still does the most for a home not on a heat network. External wall insulation is the bigger job — typically £26,000, range £20,300 – £33,800 — but it also qualifies for the 0% VAT rate while it's in place, and it's the upgrade that makes the most difference to how far any heating system, heat pump or heat network, stretches your money.

The bigger picture. The Warm Homes Plan, published in January 2026, sets out £15 billion of spending to 2030, including grants for low-income households and low- or zero-interest loans that are being phased in over time. Waste-heat networks like the one described above sit alongside that plan rather than replacing it — most of the country will still be upgrading heating home by home, not connecting to a shared pipe.

Our take

We build our cost figures from labour hours multiplied by local trade rates plus materials, then check the results against market prices and real quotes, so the ranges above reflect what installers are actually charging right now, not list prices. If you already have a quote in hand for a heat pump, boiler or insulation job, it's worth running it past our "is my quote fair" tool before you sign anything — regional rates vary more than most people expect, and a quote that looks high for one part of the country can be normal for another.

For homes that do end up on a future heat network extension, the economics should look similar to a boiler in practice — a fixed standing charge and a per-unit rate for heat, agreed with whichever operator runs the local network — but no details of tariffs have been published for the schemes named above, so we're not putting numbers on it until they are.