Rewiring heat: The UK’s commercial market heads for a Net Zero transformation
Steve McConnell, Director of ICOM In half a century, the UK’s commercial heating market will look radically different from the one we know today. The journey to Net Zero,
along with the need for secure, affordable and resilient heat, will have reshaped our technologies, infrastructure, business models and regulations. The heating sector will no longer be a separate, carbon-intensive utility; it will be an integral part of a flexible, digital, low- carbon energy system.
Electrification as the default By mid-century, high-efficiency electric heat pumps, such as air-source, water-source, and large-scale compression or absorption systems, will be the backbone of heating for most commercial, public, and industrial buildings. Where retrofits were challenging, advanced high-temperature heat pumps, hybrid systems and local heat networks enabled older building stock to decarbonise without complete radiator or plant replacement.
In dense urban and campus areas, massive carbon-lean district heating and cooling networks will dominate. These networks will run at lower temperatures to maximise efficiency, sourcing heat from industry, waste- to-energy plants, sewer systems, rivers and large central heat pumps.
Hydrogen will play a targeted but critical role, primarily in high-temperature industrial processes and in legacy sites where electrification is not practical. Large-scale underground hydrogen storage facilities will provide assurance of supply, particularly in periods of high demand.
The rise of flexible, digital energy hubs Local energy hubs will combine multiple technologies: heat pumps, thermal storage (both short-term and seasonal), combined heat and power units with carbon capture where permitted and grid-interactive controls. These hubs will not just provide heat. They will actively participate in the electricity system by offering demand response, thermal storage dispatch and even inertia services, helping balance a fully renewable power grid.
Digitalisation will underpin everything. Smart thermal grids, pervasive sensors, and building and plant digital twins will enable predictive control, continuously optimising comfort and cost. The data from these systems will also support new revenue streams as buildings sell their flexibility services back to the power system.
Regulation driving Net Zero Policy will remain a major driver of change. By 2075, the UK is likely to have binding net-zero operational emissions requirements for new commercial buildings and strict retrofit pathways for existing ones. Legislation will focus on performance outcomes rather than prescriptive technology rules – a shift that is already beginning today.
Mandatory energy performance diagnostics and continuous commissioning will ensure that buildings deliver on their design intent. Carbon pricing, combined with regulated heat network tariffs, will incentivise the use of low-carbon heat sources and ensure fair, transparent pricing. Incentives will reward not only operational carbon reduction but also lifecycle performance, including embodied carbon and resilience metrics such as on-site backup heat and thermal storage capacity. For hydrogen, national standards will tightly regulate fuel quality, pipeline safety, leak detection and installer certification.
A transformed industry
The structure of the heating market will change as well. Global manufacturers will supply modular, upgradeable and recyclable equipment designed for long life and easy refurbishment. Local service hubs will provide long-term performance contracts, guaranteeing measured outcomes for energy savings and carbon reduction.
Financing models will shift CAPEX away from building owners and toward third-party investors through energy-as-a-service agreements, green bonds and performance contracting. This will result in lower risk for building operators and faster uptake of decarbonised heating solutions.
Social and economic impacts The decarbonisation of heat will have deep societal consequences. Local heat planning will be a statutory function, mapping waste heat sources and planning networks to maximise efficiency and minimise cost. Heating will become an active participant in system flexibility markets, with commercial buildings routinely pre-heating or dispatching stored thermal energy in response to grid needs.
Crucially, the transition will be equitable. Government-backed programmes will support low-income building upgrades and fund workforce reskilling, ensuring no one is left behind as the market shifts away from fossil fuels.
Conclusion
The commercial heating market of 2075 will be almost unrecognisable compared to today – electrified, integrated, digital and circular by design. This transformation will help the UK meet its Net Zero targets and will also deliver more reliable, efficient and affordable heating for businesses and public services. The industry’s challenge today is to prepare the supply chains, skills and regulatory frameworks that will make this vision a reality.
HVR 65th Anniversary Supplement
www.heatingandventilating.net
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