Combined Heat & Power, District Heating & Cooling, Demand Side Services, Energy Efficiency

BEIS publish finance review of heat network investment in the UK and guidance on procuring finance

9 August 2018

The Department for Business, Energy and Industrial Strategy (BEIS) has published a report: Infrastructure Finance Review: insights for district heat network investment in the UK, which allows comparisons to other infrastructure sectors in the UK. As well as a guidance document on procuring finance for heat networks for local authorities.

Infrastructure finance review: insights for district heat network investment in the UK

The review of key UK infrastructure sub-sectors by Deloitte was designed to identify lessons learnt from relevant infrastructure sub sectors that will help unlock third party finance for district heat/cooling networks in England and Wales.

Sectors explored include:

  • energy from waste
  • offshore wind
  • ground mounted solar
  • smart meter portfolios
  • licenced offshore transmission links (OFTOs)
  • interconnectors
  • licenced Regulated Asset Base (RAB) networks under economic regulation
  • infrastructure provider model as used in Thames Tideway Tunnel
  • PFI / PF2 / PPP

Read the webversion here, and the print-version here

Heat networks: procuring finance

This guidance document was designed to help local authorities which recognise the potential benefits of engaging with a non-public investor (NPI) to deliver a heat network, but want to better understand:

  • at what stage the local authority can engage with the NPI
  • what role the NPI could play in developing the heat network project
  • the procurement law and state aid implications of involving the NPI
  • the alternatives for delivering the project in a way which meets the local authority’s objectives, complies with legal requirements and supports investment from non-public sources

Similarly, NPIs considering investment in a heat network project with a local authority may want to better understand the procurement law and state aid considerations which are relevant to the structuring of the project, and how these influence the local authority’s approach.

Read the full guidance document here

The ADE will be publishing a briefing for members on these soon. 

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