Bevan Brittan welcomes the district energy programme which aims to leverage £1billion of private investment

Bevan Brittan welcomes the district energy programme which aims to leverage £1billion of private investment

As market leading lawyers in the district energy sector, we are pleased to see the formal launch of the main scheme for the Heat Network Investment Project (HNIP) as part of Green Great Britain Week.

As a legal advisor on 5 of the 9 HNIP pilot projects, we are acutely aware of the challenges in structuring, financing and delivering a district energy project from both a commercial and legal perspective. 

Nadeem Arshad, a Partner at Bevan Brittan said:

"This launch will help accelerate the growth of district energy across England and Wales and will be welcomed in particular by private sector organisations such as developers, operators, investors and project sponsors". 

Department for Business, Energy and Industrial Strategy (BEIS) has appointed Triple Point Heat Networks
Investment Management as its delivery partner for HNIP.  The programme will no doubt build on the lessons learnt from the pilot phase which was limited to public sector organisations.

By offering grants and loans to both the public and private sectors, BEIS intends to leverage £1billion of private and institutional capital to accelerate growth in this sector.

As part of the Government's Clean Growth Strategy, HNIP has already attracted investment in the market from a number of key players like Engie, EON, Metropolitan, Pinnacle, Vital and SSE. It is hoped that HNIP and new market entrants like Vattenfall will lead to third party investor interest.

The HNIP funding will be available to support the commercialisation and construction stages of a project and the investment costs eligible for support include:

• The building of new heat networks (generation, distribution and customer supply);
• Development of existing heat networks including expansions, refurbishment or the interconnection of
existing networks where additional carbon savings can be demonstrated;
• Commercialisation phase and construction costs;
• Building connections (unless these fail the additionality test i.e. planning conditions would have already required the works); and
• works to access recoverable heat from industry.

Bevan Brittan LLP has been advising in this sector since its infancy and is currently advising developers, project sponsors, industrial heat generators, ESCOs and public sector organisations on heat and electricity network projects across the UK.  

If you would like to discuss how HNIP might be able to help you deliver your district energy project please contact one of our sector specialists, Nadeem Arshad, Nathan Bradberry or Maxim Laithwaite.