Combined heat and power (CHP) projects and heat pumps

Introduction

This is an overview of the key content to be found in our Combined Heat and Power (CHP) Projects and Heat Pumps subtopic. It briefly explains the nature of this content and provides links to it.

CHP Projects and Heat Pumps—content

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Practice Note: The Energy White Paper—an overview [Archived] which has been archived and is no longer maintained—considers some of the key measures announced in the Energy White Paper published on 14 December 2020 by the UK Department for Business, Energy & Industrial Strategy (BEIS) (which has subsequently been replaced by the Department for Energy Security and Net Zero (DESNZ)) and their expected impact on the energy sector. It also provides a comprehensive overview of all commitments announced

Project types and structures

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Practice Note: An introduction to Combined Heat and Power (CHP) Projects introduces what CHP projects are and the key contracts involved, the revenue streams typically available to CHP projects, and provides an explanation of the key contractual and regulatory issues faced by CHP projects
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Practice Note: Combined heat and power—technology explains CHP technology, and outlines some of

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NESO submits connections reform proposals to Ofgem

The National Energy System Operator (NESO) has submitted a series of connections reform proposals to Ofgem, including Code Modifications CMP434, CMP435, and CM095, along with three proposed connections reform methodologies. If approved, these reforms will prioritise projects based on readiness and alignment with the government's Clean Power 2030 (CP30) Action Plan 2030, introduce new delivery requirements, and eliminate stalled projects from the queue. Ofgem is expected to make a decision on these proposals in Q1 2025. Subject to approval, these changes, along with associated licence modifications, will facilitate the implementation of a reformed connections process starting in May 2025. An evidence submission window will open in Q2 2025, providing project developers in the current queue a minimum of two weeks to submit a Gate 2 declaration/application. NESO will then review submissions and work with network companies to establish the new connections queue via the ‘Gate 2 to Whole Queue’ exercise. NESO plans to begin issuing Gate 1 offers from Q2 2025 and aims to issue Gate 2 offers as soon as possible in 2025.

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DESNZ launches call for evidence on Ofgem review

The Department for Energy Security and Net Zero (DESNZ) has launched an in-depth review of Ofgem, launching a call for evidence to seek feedback on Ofgem's role in supporting an innovative energy market that benefits consumers. The review will examine Ofgem’s mandate, consumer protection powers, its scope and remit, standard-setting processes, and redress mechanisms. Key proposals include shortening complaint response times, strengthening the energy ombudsman, and expanding automatic compensation schemes. The review will also consider Ofgem's role in approving infrastructure projects. Ofgem has welcomed DESNZ's review, viewing it as an opportunity to explore new regulatory approaches, potentially including powers similar to those of the Financial Conduct Authority. The call for evidence closes on 28 February 2025.