Derby Heat Network Lands Major £100M Investment to Transform Urban Energy

Image: Derby City Council's Cllr Carmel Swan and the 1Energy team

In a bold move to reshape how Derby heats its homes and buildings, low-carbon heat network developer 1Energy has pledged £100 million in private capital to develop a city-wide heat network. The announcement was made at a recent event attended by key city leaders, immediately following the company's securing of £23 million in government funding to kick-start the project.

What sets this initiative apart is its zero-cost approach for the local council and community. The Derby Energy Network is designed to cut the city’s overall gas demand by around 7 per cent. It will deliver low-carbon heating through a network of underground hot water pipes, powered by water source heat pumps that reuse surplus heat from local industries. According to 1Energy, total investment in the project could exceed £140 million as the network expands.

The commitment was unveiled on the historic site of the world’s first factory, with local MP Baggy Shanker and other city officials in attendance. The event brought together leaders from both the public and private sectors, with discussions focused on securing Derby’s energy future, sparking innovation, and creating skilled jobs and apprenticeships. It also highlighted the need to modernise infrastructure in a way that prepares the city for future challenges.

Several major institutions are already on board. Derby City Council, the Royal Derby and Florence Nightingale Hospitals, the University of Derby, and Derby College are working closely with 1Energy to bring the network to life. Construction is set to begin in 2026.

The vision is clear. The Derby Energy Network will reduce the city’s dependence on gas boilers and instead supply buildings with cleaner, more reliable heating. Businesses can benefit from lower energy costs and increased protection against fluctuations in gas prices. Some of the country’s most innovative companies, including Rolls-Royce and SmartParc, are expected to connect to the network, reinforcing Derby’s leadership in sustainable and circular economies.

Andrew Wettern, CEO of 1Energy, said:

Derby has long led the world in terms of innovation, from water networks to defence. We are delighted to bring long-term investment to the city and build on its rich industrial heritage, enabling leading businesses to play a key role in delivering a new utility model. Home to world-renowned innovators, Derby is uniquely placed to lead the transition to a more secure energy future. Alongside transforming the city’s energy infrastructure, the Derby Energy Network will give businesses greater choice and long-term price certainty. All while unlocking economic, health and environmental benefits for the city, the region and the country. We are exciting to continue working with Derby’s trailblazers to develop the network.

Beyond the economic benefits, the environmental impact is significant. The network is projected to eliminate 20 tonnes of harmful air pollutants, equivalent to removing 16,000 cars from the roads annually. By reducing emissions from buildings by up to 77 per cent, carbon output could drop by 19,200 tonnes. That means cleaner air, better public health, and meaningful progress toward the UK’s climate targets.

Baggy Shanker, Member of Parliament for Derby South, said:

The Derby Energy Network represents a huge opportunity for our city to deliver another cutting-edge project, continuing our long-standing leadership on innovation. By combining private capital and public investment, it will bring hundreds of millions of pounds into Derby. I see it playing a key role in boosting economic growth.It is great to hear the project will also create hundreds of skilled local jobs, including apprenticeships. As a former apprentice myself, I know first-hand how transformative they can be.

1Energy also claims it is the first company in the UK to build city-scale low-carbon heat networks using funding from institutional investors. The company has ambitious plans to scale, aiming to deploy £1 billion over the next eight years in similar projects nationwide. These future developments will build on the lessons learned in Derby and partner with some of Britain’s most forward-thinking businesses.

Councilor Carmel Swan, Cabinet Member for Climate Change, Transport and Sustainability at Derby City Council, said:

This is brilliant news for our city. 1Energy’s £100m investment in low-carbon heating will mark a transformative step forward for Derby – not only in our mission to tackle climate change by cutting carbon emissions, but also in fostering healthier, more resilient communities.This initiative will help to keep homes and buildings across Derby warm in a more sustainable way whilst delivering wider benefits, from improving air quality and reducing fuel poverty, to enhancing public health and wellbeing.This initiative will be a game changer for communities across Derby, and I look forward to working closely with 1Energy to deliver lasting benefits for Derby.

By reducing reliance on gas, these heat networks won’t only lower emissions, but also improve energy efficiency. They’ll help stabilise energy prices, protect households and businesses from market shocks, and reduce long-term public health costs. That’s a win for the planet, the economy, and the people who call Derby home.