Vattenfall said the planned review would consider the ownership of its separate heat network businesses in the UK, the Netherlands and Sweden in line with wider plans for future investment into low carbon energy.

No timeline has been outlined for completing the review process, which will determine whether the company wants to sell any of the operations, as well as looking at what potential buyers there would be for maintaining and operating the existing sites.

For the group’s UK operations, the review would encompass all heat networks currently managed in the country, along with its electricity distribution business (IDNO).

The company said it would consider the options for divesting its district heating businesses, which collectively supply heat to an estimated 550,000 households across European markets as well as serving businesses.

Vattenfall Heat UK says that around 6,000 households are currently served from its UK heat networks, with potential for further expansion. This potential is backed by a range of government incentives looking to push the development and connection of more energy efficient and sustainable district heating solutions.

In the UK, the company’s heat networks are in place in London, Bristol and Midlothian in Scotland.  The operations in London also include linking up buildings with heat derived from the Riverside 1 Energy from Waste (EfW) facility operated by Cory Group.

Vattenfall Heat UK does not currently own or operate any energy from Waste (eFW) sites in the UK, which can potentially be connected to networks as a potential source of heating that is then distributed to customers through pipework.

A recent government review of EfW capacity in England has pledged to introduce stricter environmental conditions on approving future plants to ensure they can be linked to networks or carbon capture and storage functions.

A company spokesperson said that any potential decision to sell any part of these heat networks was not expected to impact their operation.

It is understood that the decision is also not linked to any specific piece of legislation or policy reforms in the UK energy market that encompass waste or EfW operations.

Vattenfall said it would also continue to operate in the UK through its onshore and offshore wind businesses – even if it chooses to sell the heat networks.

The company also argued that district heating had strong potential for delivering more cost effective, efficient and low carbon heating for home, public building and businesses.

Heat networks have been identified by the Climate Change Committee (CCC) watchdog of having the potential to supply up to a fifth of UK’s heating needs by 2050 as part of plans for meeting the country’s net zero carbon legal commitments.

However, Vattenfall stated that large amounts of capital investment were required for building heat networks, with the company looking to review its current investment plans.

It said: “[The company] must prioritise its projects carefully, also taking into account the need for fossil-free electricity generation like wind and nuclear, as well as distribution and storage solutions to meet future energy demands.”

Jenny Curtis, managing director of Vattenfall Heat UK, said that district heating and electrification presented huge markets for growth to help support UK net zero transition aims.

She said: “There is a significant opportunity for investment in long term, regulated, sustainable infrastructure for the right owner.”

“Our commitment to our customers, partners, and employees remains unchanged while the assessment of future ownership options takes place, and we will continue to grow both Vattenfall Heat UK and Vattenfall IDNO in line with existing business plans.”

Alexander van Ofwegen, senior vice president and head of business areas customer and solutions – including the group’s heating business – said the review would take time to complete with the aim to determine the most suitable ownership for its heat network operations.

He added: “Vattenfall continuously prioritises and weighs investment opportunities to contribute to the energy transition in the best way. There is no doubt that there is a sustainable future for district heating in all three markets and for the electricity distribution business in the UK.”

“Our assessed businesses will continue to operate as normal, working alongside our partners in all our markets.”