To address the growing energy demands of AI, the AI Energy Council was established. The Council offers expert insights into preparing the UK’s energy system to manage AI’s energy footprint, as well as harnessing AI’s potential within a modern energy system - aligned with the Clean Power 2030 goals.

Heat network zoning will enable heat sources to be connected to a network. This will allow for strategic heat networks to be built across the country, making use of recoverable heat sources, including data centres, where available.

The department is undertaking research into best practice for connecting heat sources to heat networks. This includes learning from national and international case studies.

The Department for Energy Security and Net Zero (DESNZ) does not hold an estimation of heat recovery potential specific to the hospitality sector, though in 2014 the Department of Energy and Climate Change published research on the potential for recovering and using surplus heat from industry.

DESNZ also incentivises Combined Heat and Power (CHP) across many sectors, an efficient process that captures and utilises the heat that is a by-product of the electricity generation process, via the voluntary Combined Heat and Power Quality Assurance (CHPQA) Programme.

Sites with CHP typically see savings of around 20% on their energy costs. In 2024, there were 206 CHP installations in buildings classified as hotels in the UK (Digest of UK Energy Statistics 2025), the closest approximation to hospitality in the data.

The Department is looking at how waste heat from data centres can be used to support the development of large scale, strategic heat networks.

Through heat network zoning, certain buildings and heat sources, including data centres, can be required to connect to a network within set timeframes.

Additionally, the Green Heat Network Fund provides £195m p.a. in capital grants up to 2029–30 for low‑carbon heat networks in England. One supported project is a major new network in North-West London that will utilise data centre heat, powering 10,000 new homes and 250,000m² of commercial space.

The Warm Homes Plan will help households and businesses make the switch to clean heat and save money on their bills. Heat networks can offer low-cost, low-carbon heat, and reduce everyone’s bills by using surplus heat that would otherwise be wasted.

The Government is investing £13.2bn in the Warm Homes Plan over the Spending Review period (up to 2029/30). Further detail on the Warm Homes Plan, including deployment targets and funding to deliver heat network schemes, will be set out by October.

Data centres produce significant heat, most of which is currently wasted into the environment. The technology exists to capture this heat and reuse it in district heating networks, or for heat intensive industries. We welcome the inclusion of heat recovery systems within applications for AI Growth Zones alongside other sustainable solutions.

We are engaging with developers and operators to determine whether further interventions are necessary and appropriate to encourage adoption of heat recovery. The Greater London Authority is currently developing a pilot to test heating up to 10,000 homes and at least one hospital from London-based data centres.

The £315 million Industrial Energy Transformation Fund (IETF) supports a wide range of projects, including waste heat recovery, at industrial sites with high energy use across the UK.

The IETF has supported a number of these projects thus far, one such example is the recovery project undertaken by GSK Ltd in County Durham, which includes the installation of a heat pump to recover waste heat from site compressors and displace heat demand on natural gas boilers. The Fund is currently open for applications and will have a further two application rounds this year.

Building Regulations set minimum energy performance standards for heating systems in new homes and when they are replaced or fitted into existing homes.

Under these regulations, when a gas combination boiler is installed in an existing dwelling, an additional energy efficiency measure must also be installed, with passive flue gas heat recovery systems being one of four options. The English housing stock is diverse, so the requirement is flexible to allow a suitable choice to be made that reflects the nature of the building, and the needs of the individual household.

When these regulations were introduced, many system and most regular boilers on the market were considered incompatible with passive flue gas heat recovery systems and compensation controls, or required an additional component, and therefore were exempt from the additional energy efficiency measures.

For new builds, buildings regulations around energy efficiency and space and water heating are deliberately couched in performance terms and do not prescribe the technologies, or fuels to be used, allowing manufacturers and builders the flexibility to innovate and select the most practical and cost-effective solutions in particular circumstances.

The extent to which a passive flue gas heat recovery system can increase the efficiency of a dwelling and reduce natural gas consumption is dependent on many factors. Analysis undertaken on behalf of BEIS showed that the typical household could increase boiler efficiency between 1% to 5% by adding a passive flue gas heat recovery system.

Passive Flue Gas Heat Recovery System’s (PFGHR) with thermal storage can deliver total annual gas savings for heating hot water of around 30% for a typical domestic building. This is equivalent to a boiler efficiency improvement of around 5% versus a system without. These savings can vary significantly depending on the volume of the thermal store, space heating demand, usage patterns and property type.

Domestic hot water gas savings will typically be close to 20% for a new-build dwelling, and up to 35% for a larger existing property.

In his Summer Economic Update, my Rt. Hon. Friend Mr Chancellor of the Exchequer announced a £2bn Green Home Grant scheme that will support homeowners and landlords in England to improve the energy efficiency of their properties, reducing energy bills and carbon emissions, and supporting a green economic recovery.

The funding will be spent on paying for accredited tradespeople to install a range of measures, for example insulation, to improve the energy performance of their homes. Further detail on the range of measures will be announced in due course, before the full launch.

The response I gave to the noble Lord on 7 July 2020 to Question HL6124 applies to passive flue gas heat recovery systems with and without thermal storage.

Analysis undertaken on behalf of BEIS showed that the typical household could increase boiler efficiency between 1% to 5% by adding a passive flue gas heat recovery system. The 1-5% boiler efficiency level includes both product types with the 5% being an upper maximum for a passive flue gas heat recovery device with thermal storage (typically a 5 to 10 litre store) in a large house.

Introduced in 2018, Boiler Plus regulations raised standards for all domestic boiler installations, supporting efforts to reduce carbon emissions while making it easier and cheaper to heat homes. In addition to raising the minimum efficiency standards for boilers, the regulations required an additional energy efficiency measure to be installed alongside combination gas boilers that accounted for 78% of the market. The measures include flue gas heat recovery.

Many system boilers and most regular boilers on the market were incompatible with flue gas heat recovery systems and compensation controls when boiler plus regulations were introduced and therefore were exempt from the requirement.

The extent to which a passive flue gas heat recovery system can increase the efficiency of a dwelling and reduce natural gas consumption is dependent on many factors including the annual space heating and domestic hot water demand of the specific building and importantly whether the system installed has built-in thermal storage. However, analysis showed that the typical household could increase boiler efficiency between 1% to 5% by adding a passive flue gas heat recovery system.

Waste heat capture can play an important part in the decarbonisation of heat, specifically when used in heat networks. In its 2015 assessment the Committee on Climate Change suggested that waste-heat recovery should be contributing a third of heat supply to heat networks by 2050 in order to meet our net-zero target.

The Government recognises that waste-heat is a cost-effective form of low-carbon heat. In the Budget on 11^th March the Chancellor announced a new £270m Green Heat Network Fund. This will fund large-heat pumps, solar thermal installations and waste-heat recovery in heat networks between 2022 and 2025; and we will be consulting later this year on scheme design.

This paragraph refers to a method of averaging data over time rather than selecting information. This method has been used by the Buildings Research Establishment where raw test data cannot be used directly in its methodology for assessing Flue Gas Heat Recovery Systems. This is because the raw data would create anomalous fluctuations in the temperature gradient due to measurement uncertainty in the individual readings. This approach will be considered as part of the review.

The Department is in the process of procuring a third-party organisation to carry out the review. Our aim is to have the review completed around the turn of the year. However, this is subject to the detailed requirements identified by the reviewing organisation, such as the extent of laboratory testing required. Manufacturers will be informed of the outcome of the review when it concludes.

The entry for this product in the Product Characteristics Database (PCDB) is based on amendments to the standard methodology, which have been used on a provisional basis. The Department is commissioning a full review of the methodology for assessing Flue Gas Heat Recovery Systems. This is intended to confirm which amendments, if any, are necessary to ensure the methodology can accurately assess all such systems.

The reasons that entries for products from two manufacturers have not been calculated in full accordance with the standard BRE methodology are specific to each product. They have been communicated to the relevant companies.

This paragraph refers to a pre-processing (averaging) method that has been used by the Buildings Research Establishment (BRE) where raw test data cannot be entered directly into its methodology for assessing Flue Gas Heat Recovery Systems (FGHRS). BRE intends to publish a document that describes the averaging method shortly.

The methodology used by BRE for assessing FGHRS for the Product Characteristics Database is published already at the following URL: https://www.ncm-pcdb.org.uk/sap/filelibrary/pdf/calculation_methodology/SAP_2009/FGHRS_calculation_method_28_10_10.pdf.

A label has been applied to entries for certain Flue Gas Heat Recovery Systems in the Product Characteristics Database where the entries for those products have not been calculated in full accordance with the standard Buildings Research Establishment methodology and there is a risk that such entries might materially overestimate the energy savings associated with the product. The Department is commissioning a review of the methodology for Flue Gas Heat Recovery Systems. Pending the outcome of the review, we intend to change the label to state “The SAP FGHRS methodology is currently being reviewed. This entry may change.” This label is necessary to keep all users of the database appropriately informed as they may base important decisions on the database.

This paper gives the view of the Building Research Establishment on a proposed amendment to its methodology for assessing Flue Gas Heat Recovery Systems. This will be considered as part of a full review that the Department is commissioning on the methodology.

The Department works with colleagues in Defra to collate publicly available information on waste-incinerators in England and Wales which received planning permission or environmental permits to be ‘enabled’ to supply heat through district heating facilities. This is published on the Renewable Energy Planning database page on Gov.uk. It is a commercial decision for the enabled facility whether to then supply heat through the district network; this information is not collected centrally.

Based on this information the locations (as of March this year) of waste incinerators which are heat and power ‘enabled’ are as follows:

BEIS officials understand that the Building Research Establishment has had discussions with Canetis Technologies Ltd. about the representation of its Flue Gas Heat Recovery System products in the Product Characteristics Database.