Alasdair Young, energy director at Buro Happold, discusses the importance of retrofit in the country’s quest for decarbonisation
The UK’s built environment accounts for around 25% of national greenhouse gas emissions, making it one of the largest contributors to climate change and a critical battleground for net-zero delivery.
Heat amounts to 79% of these emissions, but because it is deeply embedded in the fabric of our buildings, decarbonising heat is particularly complex.
The recently published Net Zero Carbon Buildings Standard indicates a clear ambition for all existing buildings to be net zero carbon in operation by 2050, and all new buildings to meet that standard by 2030.
However, this is still voluntary – the more stringent Minimum Energy Efficiency Standards (MEES) regulation will force a quicker shift: to grant new leases or continue letting commercial properties, landlords are required to meet an Energy Performance Certificate (EPC) rating of A-E.
Alongside government-led policy, thinking is starting to take shape at the local authority and city levels, with London designating low-carbon energy as a priority pillar in its new Infrastructure Framework, part of the larger Growth Plan.
This all represents a groundswell of change in how regulatory bodies are approaching decarbonisation. But commercial building projects still face multifaceted challenges and ask one common question: how do you translate this direction into delivery?
The retrofit imperative
Well-designed new developments can be built to optimise for low energy demand from the outset.
However, around 80% of the buildings in the UK that will be standing in 2050 have already been built. This shows the real decarbonisation challenge isn’t about building new – it’s about improving our existing buildings.
Retrofitting is harder than building new in part because it requires navigating complex ownership and tenure arrangements, managing occupied buildings, and finding technical solutions that are compatible with existing systems rather than replacing them entirely. Going beyond the ‘easy wins’ can also be expensive – the capital costs of ‘deep’ retrofit are harder to quickly recuperate through energy savings alone, unless they are part of a broader refurbishment and/or extension approach. This leaves most building owners needing to choose between upgrading their heating system to a more efficient heat pump and seeking an infrastructure-based solution.
The urban area approach to decarbonisation
For lower-density areas, air- or ground-source heat pumps are often the right approach. For example, in residential areas where homes are detached or semi-detached, there is more space to install an external plant.
But dense urban environments are a different story. High-rise buildings and tightly packed mixed-use districts pose constraints that heat pumps cannot easily overcome. For example, external space for installation is scarce, and existing heating systems are often difficult or prohibitively expensive to upgrade. Another constraint is electrical grid capacity – in city centres, the grid may not support the simultaneous electrification of thousands of buildings. This is where heat networks come into play.
Heat networks as a city’s solution
Heat networks distribute thermal energy from a central source directly to connected buildings via insulated underground pipe infrastructure. This allows them to achieve efficiencies and economies of scale that no building-by-building approach can match.
The most advanced district energy network operates at near-ambient temperatures, allowing buildings to draw heat from the network or redirect heat back into it, depending on what’s needed at any given moment. This means that a building running its cooling system during a warm afternoon “donates” heat to a building that needs it. The network acts as a thermal bank, enabling continuous energy exchange across an entire area.
This approach is particularly powerful in city centres with diverse building types and mixed demand profiles. The variety of offices, residential buildings, retail, and civic uses creates opportunities for energy sharing that no individual building can provide alone. This is the approach being developed for Plymouth city centre, where a low-temperature foundation fed by a nearby wastewater treatment plant will provide heating and cooling across a mix of civic buildings, commercial spaces, and a university campus.
The ability to both heat and cool from the same infrastructure makes these networks uniquely suited to urban demands. As summer temperatures rise year on year – 2025 having been the hottest summer on record in the UK – the demand for air conditioning is only growing in cities facing the ‘urban heat island’ effect. Heat networks, which address both cooling in summer and heating in winter, are particularly useful in cities, catering for elevated demand without the need for a separate system.
Connecting buildings’ heat sources
Heat networks are a particularly valuable tool for decarbonisation as they can draw on a wide range of low-carbon heat sources – none of which are available to an individual building acting alone. For example, such sources could include large-scale heat pumps, geothermal sources, or recovered waste heat.
Waste heat is one of the most underutilised resources in our cities – from only a handful of waste heat sources, around 10% of London’s heat demands could be met. A report we conducted with the GLA found that in the North London Waste Authority (NLWA) alone, there is 2 TWh/yr of energy that could be used to heat hospitals, schools, and homes.
Transportation is also a large source of waste heat – the TFL tube system releases 500GWh of energy as waste heat annually. Capturing and redistributing that energy, rather than losing it to the surrounding environment, can be a cost-effective and low-carbon way of sourcing heat for buildings.
From framework to delivery
Decarbonising our cities is an area ripe for opportunity. But what remains unclear is how quickly this shift will materialise. Several advanced heat network zoning projects are out to tender or have been awarded to developers, with many nearing the end of their development phases. The sector is at a critical inflexion point – one where delivery must follow policy intent.
For this to happen, governments may need to go further, strengthening “zoning powers” and accelerating the capacity of local governments to deliver these rights in their own regions. We can also learn from international counterparts: for example, in the US and Germany, thermal energy networks are already being developed. With the right investment framework in place, we can start following suit. In Germany, ‘heat transition’ plans are mandatory, and infrastructure providers benefit from more generous grant support and access to cheaper power, meaning their transition is moving much more quickly than in the UK.
At the same time, property owners cannot remain passive: they must begin making informed, medium-term decisions about how to transition away from natural gas, whether through building-level solutions or by connecting to emerging shared infrastructure.
There is significant opportunity, particularly when considering the scale of untapped waste heat in urban areas. The question now is whether the UK can move at pace, learn from global best practice, and translate ambition into on-the-ground delivery.
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