The Heat Network Investment Project Nick Allen, Principal Corporate Finance Advisor BEIS 24 Jan 2019

Climate Change requires action! Source: https://www.theccc.org.uk/publication/the-fifth-carbon-budget-the-next-step-towards-a-low-carbon-economy/

Heat is the biggest source of carbon emissions Estimated UK emissions attributed to heat, 2015

Options for decarbonising heat are challenging… ELECTRICITY HYDROGEN EMISSIONS REMOVAL Heat demand is estimated. Courtesy of Imperial College 4

… but heat networks can help Reduce emissions Reduce bills Increase resilience Increase flexibility Technology agnostic

What is a Heat Network?

Reducing carbon, reducing cost…

…and, uniquely, utilising waste heat and renewables otherwise inaccessible Water, air, ground Energy from waste Industrial waste heat Buildings Geothermal Electrical infrastructure Tube ventilation shaft

If heat networks are so great… … why don’t they just happen? High initial capital cost Relatively complex Risks too high before operational Role of the Heat Network Investment Project Gap funding to help make schemes investable Drive the market to improve skills and drive down costs Involve a wider range of investors and clients Test and learn from innovations Driving towards the creation of a self-sustaining heat network market

Role of the Heat Network Investment Project Gap funding to help make schemes investable Drive the market to improve skills and drive down costs Involve a wider range of investors and clients Test and learn from innovations Driving towards the creation of a self-sustaining heat network market £280 million funding available Seeking to support projects worth £1-2 billion Grants or loans Grants mainly to public sector Loans mainly to private sector Funding can cover commercialisation and construction, or just construction 20 Nov 2018

Key Roles of Partners Comprised of a number of professional firms with a demonstrable track record of engaging with investors and supporting project developers to deliver a wide range of infrastructure projects, Triple Point Heat Networks Investment Management includes the following organisations:

How does HNIP work Two stage application Projects scored on: Quick test of eligibility and sufficient development Full assessment requiring a well developed scheme and significant data input Projects scored on: Heat delivered per £ of grant requested Carbon saved per £ of grant requested Potential future carbon savings and Deliverability Applications will compete with each other at an investment panel – only the best will be funded 20 Nov 2018

Timing Launched in October 2018 1st Round applications deadline by late Feb / early March 2019 1st Round decisions in April 2019 Then each quarter thereafter until 2021 20 Nov 2018

Relevance to you? You look after an estate with multiple buildings in one location You could develop a scheme – talk to us for advice You look after one or more single buildings You may be invited to join a scheme – consider it carefully You are developing a new building Consider being ‘District Heating ready’ – it will be much easier later 20 Nov 2018

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