Centralised: Infrastructure Investor owns and operates the heat network
Infrastructure Investor generates heat centrally (via heat pumps, CHP, or other sources), distributes it through a pipe network, and charges customers a Heat Supply Agreement (HSA) for delivered heat (£/kWh or standing charge). Infrastructure Investor bears capex, opex, and regulatory/technical risk on the network. Customer relationship is long-term and asset-backed.
Decentralised: Infrastructure Investor supplies electricity; customer deploys own heat system
Infrastructure Investor's role is upstream: providing the last-mile electricity connection to the customer's premises. The customer procures, installs, and operates their own heat pump. Infrastructure Investor's revenue is from electricity distribution/supply (£/kWh, connection charges). Lower complexity for Infrastructure Investor but thinner margin; customer bears heat system performance risk.
Air Source Heat Pump (ASHP), Extracts heat from ambient air. COP typically 2.5–3.5 (lower in cold weather). Lowest capex, highest variability in output. Most common in residential/small commercial. Noise and siting constraints relevant for dense urban deployments.
Ground Source Heat Pump (GSHP), Extracts heat via ground loops (horizontal) or boreholes (vertical). COP typically 3.5–5.0, more stable year-round. High upfront capex (drilling/trenching). Strong fit for greenfield sites with land availability. Less affected by ambient temperature.
Water Source Heat Pump (WSHP), Uses rivers, lakes, aquifers, or mine water as heat source. Very high COPs possible (4–6+). Requires proximity to water body; abstraction licencing from Environment Agency. Mine water (e.g. Scottish coalfields) increasingly relevant for urban district schemes.
Large-Scale / District Heat Pump, Industrial-scale units (often >1MW) serving district heat networks. May use waste heat from data centres, sewage, industrial processes. High engineering complexity; typically requires anchor loads (hospitals, social housing blocks) for viable base demand.
Hybrid System (Heat Pump + Gas Boiler), HP handles base load; gas boiler tops up in peak/cold conditions. Lower capex than full electrification; maintains gas connection. Regulatory position evolving, may not qualify for full heat decarbonisation incentives. Transition technology rather than long-term infrastructure bet.