ED0389-25 Delivery of District Heating to the Cranbrook Expansion Areas by an ESCo

Description

East Devon District Council (EDDC) is seeking to engage the market in advance of procuring a long-term Energy Services Company (ESCo) to deliver a new District Heating Network to serve the expansion areas of Cranbrook. The scheme will serve the growth of Cranbrook new town, supplying low-carbon heat to approximately 4,500 new homes and 24,500m2; of commercial space, including three new schools. The project has successfully secured a £5.95 million capital contribution grant from the Green Heat Network Fund (GHNF), administered by Triple Point on behalf of the Department for Energy Security and Net Zero. This funding is intended to support the delivery of low-carbon heat infrastructure and will be made available to the appointed ESCo as a contribution towards eligible capital works. The scheme will be required to meet Future Homes and Future Building standards as set out in the updated building regulations. Planning consent for the network has already been secured under East Devon District Council’s Local Development Order (LDO) for district heating, adopted in July 2020. Additionally, the Cranbrook Plan has allocated two hectares of land for an Energy Centre and associated heat network plant and equipment within the development. The heat network will include heat distribution pipework, and a new heat generation source. The estimated annual heat demand from the new development is 34.05 GWh, with a diversified peak demand of 12.5 MW. A feasibility study has been carried out that has built the technical and economic case for the expansion. The successful bidder will need to develop the design to construction stage. This will involve coordination with the developers and their network builders/operators. The successful bidder will then operate and maintain the network for the duration of the contract in line with industry best practices and the Heat Trust Scheme Standards with a subsequent move to market regulations where applicable. The estimated contract value over a 25 year period is approximately £130 million (excluding VAT). This estimate is based on revenues generated from assumed 2025 variable and fixed tariff levels and connection charges with a 2% inflationary increase per annum. Bidders are encouraged to make value assessments for themselves to determine their own view of the value of the contract over the full term length. The given contract end date is indicative of the construction end, the expectation is that the successful bidder will then operate and maintain the network for a period of circa 80 years.

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