April, 2026 by Oliver Riley

We’re measuring heat networks wrong and it’s costing us billions.

At some point, we have to stop peering down the pipe and notice the rest of the system attached to it.

In brief
  • Heat network appraisals systematically undercount value by ignoring health, education and community outcomes.
  • Cold homes cost the NHS £2.5 billion annually and drive school absence and lost productivity.
  • Layering public data reveals civic heat clusters where multiple pressures overlap and opportunity is greatest.
  • Whole-system modelling turns marginal business cases into ten-year returns exceeding 3:1.
  • The value was always there. We just were not measuring it. Now we can.

Last month, residents stood outside Westminster City Hall holding a banner that read: "We can't afford your heat network." Their bills to decarbonise the Pimlico District Heating Undertaking (Britain's oldest heat network) could reach £66,000 per household. A funding architecture that was never designed for a network of this scale has left real people facing an impossible ask.

It's a crisis. But it is also a symptom of something deeper. And understanding that deeper thing is where something unexpected starts to happen.

Because once you see what we have been missing, you cannot unsee it. And what you find on the other side is not just a better argument. It is a fundamentally more exciting reason to do this work.


The numbers we use, and the ones we don't

Here is the standard heat network business case: capital cost, operating cost, carbon savings, maybe a nod to resilience. These matter. But they are not the whole picture. In many cases, they are not even close.

The Pimlico network was not originally built as an energy project. It was built as a public health intervention. A direct response to the choking London smogs of the early 1950s. Its construction stopped thousands of households from burning coal, wood and oil in their homes. The question someone on LinkedIn posed this week is the right one: how do you account for seventy years of cleaner air? What did that do to local health? To school attendance? To pressure on the NHS? To the local economy?

Nobody put those numbers in the original business case. Nobody has really put them in since. And that absence, that systematic failure to count what actually matters, is where the argument breaks down.

Cold homes cost the NHS around £2.5 billion every year. Respiratory admissions are significantly higher in lower-income households. Mould exposure is strongly linked to childhood asthma. Poor housing costs the UK economy £18.5 billion a year. UK children miss 80% more school days due to cold and damp housing than the European average. These are not soft benefits or peripheral co-effects. They are real costs landing in real departments, just not the one writing the cheque for the heat network.

This is the framing problem. And it is also, when you flip it around, the opportunity.

The value was always there. We just were not measuring it. Now we can.


What if we counted everything that actually changes?

Here is the thought experiment worth running.

Take a dense cluster of pre-war terraced homes in a London suburb. High fuel poverty. Poor EPC ratings. Respiratory admissions running above the national average. School absence spiking every winter. A hospital nearby, a secondary school two streets over, a leisure centre that has been trying to reduce its energy costs for years.

Under a conventional appraisal, this is a challenging site. The heat demand is real but the economics are tight. The business case looks marginal. The project may or may not proceed.

Now look at it differently. Apply the whole picture.

A heat network here does not just reduce carbon and lower bills, though it does both of those things. It reduces the respiratory illness that is filling GP surgeries and hospital beds every winter. It stabilises household finances for families already close to the edge. It improves the home conditions that are contributing to school absences. It retains money in the local economy that would otherwise disappear into avoidable energy waste. It gives the hospital, the school and the leisure centre a stable, affordable heat supply that improves their own financial resilience. It makes the area more attractive, more stable, more capable of sustaining itself over the long term.

When you model all of that, not just the energy economics but the health savings, the avoided council crisis costs, the productivity gains, the NHS spend avoidance, the local economic retention, something remarkable happens to the numbers.

In areas like this one, conservative whole-system modelling produces ten-year value figures in the range of £6.8m to £19m for a cluster of around 800 homes. Returns on investment exceeding 3:1. Business cases that go from amber to green, and sometimes to something closer to a no-brainer.

This is not wishful thinking. It is what happens when you stop counting some of the value and start counting all of it.


The signals are already there, we just haven't been reading them together

The data needed to see this whole picture is not exotic or inaccessible. It is largely open, national, regularly updated and already used by councils, health teams and housing departments, just rarely in the same room, never layered on top of each other, never asked to tell a single story.

EPC registers. Fuel poverty statistics from DESNZ. Public health data from NHS Fingertips: respiratory prevalence, winter admissions, cold-related mortality. Index of Multiple Deprivation. School absence data from the Department for Education. Building density. The location of hospitals, schools, leisure centres and civic buildings that could serve as anchor heat loads.

Layer these signals spatially, map them against each other across a borough or a district, and something starts to emerge that no single dataset reveals on its own. Clusters. Places where housing inefficiency, fuel poverty, health pressure and civic infrastructure are all concentrated together. Places where heat investment would not solve one problem but several, simultaneously, measurably and in ways that flow outward into the wider life of the area.

We are calling these civic heat clusters. Not administrative zones imposed from above, but patterns that emerge from the data itself. And identifying them could change everything about what gets prioritised, how investment gets justified and what becomes possible.

Layer the signals together and the places where intervention matters most start to reveal themselves.


This is what the work actually is

Here is what genuinely excites us about this moment.

For years, the people working on heat networks, estate decarbonisation and retrofit have been making their case with one hand tied behind their back. They have known, intuitively, professionally, sometimes from direct experience, that this work matters in ways that go far beyond kilowatt hours and payback periods. They have seen the cold homes. They have understood the connection between damp walls and a child missing school. They have felt the weight of a funding case that doesn't quite capture why this matters.

What is becoming possible now is to make that case explicitly, quantitatively and in a language that every department in a local authority can understand and act on.

Not just a housing case. A health case. An education case. An economic case. A climate case. A social justice case. A public services case. All of them, simultaneously, from the same intervention, in the same place.

When a housing director can show a public health lead that the cluster they are planning to retrofit also contains the borough's worst respiratory outcomes, something shifts. When a finance officer can see projected NHS savings and avoided council crisis spend as line items in the model alongside energy economics, the conversation changes. When the team preparing a funding bid can demonstrate not just carbon reduction but school attendance improvement, household financial resilience and local economic retention, all from the same scheme, the case becomes something that is genuinely hard to argue against.

This is not a rebranding exercise. It is a more accurate description of what good heat infrastructure does. The value was always there. We just weren't measuring it. Now we can.

What changes when you start from here

Start from whole-system thinking and the first decision that shifts is where to act. Not: which sites are technically viable? But: where will investment unlock the greatest combined value, across health, housing, climate, education and community, and why?

That is a more ambitious question. It requires bringing data together that is usually kept apart. But it produces a fundamentally different output: a strategic picture of the places where intervention matters most, backed by evidence that every relevant stakeholder can see themselves in.

In one area we are currently working with, this kind of layered analysis identified clusters where the overlap of housing inefficiency, fuel poverty, health pressure and civic anchor infrastructure was most pronounced. These were not simply the areas with the worst housing, or the highest deprivation. They were the places where multiple pressures were already interacting and where a well-designed heat strategy could relieve several of them at once. The whole-system value modelling in those clusters produces figures that make the conventional business case look like it has been leaving most of the money on the table. Because it has been.

The second thing that changes is the conversation about investment. Projects framed narrowly get treated as costs to be minimised. Projects framed in terms of civic infrastructure get treated as what they are: long-term investments in the stability and resilience of a place, with measurable returns across multiple public budgets.

That reframing matters commercially too. When the brief is shaped by whole-system thinking from the beginning, the conversation is no longer just about who can deliver most cheaply. It is about who understands the systemic context well enough to help the client make genuinely good decisions about where to act, what to prioritise and how to build the case across the departments that need to move together.

The tools to see it are coming

We are building something that makes this kind of analysis accessible, not just to large authorities with sophisticated analytical teams, but to any organisation carrying long-term responsibility for place.

The goal is to be able to search a postcode, an estate, a ward and see immediately where heat investment is likely to unlock the greatest whole-system value. To understand not just the energy performance of an area but its health context, its social pressures, its civic anchors, its carbon intensity. To produce a picture that a housing lead, a public health director, a finance officer and an elected member can all read and act on.

We are not describing a future that might arrive. The data exists. The evidence is robust. The frameworks are becoming clear. What is being built now is the thing that puts it all in front of the people who need to see it, clearly, quickly and in a form that enables decisions rather than delaying them.


The bigger idea

Pimlico was not built as an energy project. It was built as a public health intervention. The air was killing people and shared infrastructure was the answer.

Somewhere along the way we started building heat networks as energy projects. Then climate projects. Each era picking one lens and missing everything else.

What if the next chapter was different?

What if we built them as all of those things at once. Not energy alone. Not just climate. But health, education, economy, social justice and community resilience together. Not in silos with co-benefits bolted on as an afterthought. But as whole-system civic infrastructure from the very first brief.

That is not a harder argument to make. When you see the work that way, it becomes the easiest and most compelling argument in the room.

We are actively developing frameworks and tools to make whole-system heat analysis practical for planners, councils and place-based organisations. If you are working on estate decarbonisation, legacy heat networks or borough-wide retrofit strategy and want to explore what this kind of thinking could unlock for your work, we would love to hear from you.