1. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Southampton City District Energy Scheme a partnership between and SUSTAINABLE DEVELOPMENT

2. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS INTRODUCTIONS Diana Maddock Director & Original sponsor of the Home Energy Conservation Act Tim Garner Business Development Manager Business Development Manager

3. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 1.What is CHP and District Heating 2.Group and Company Background 3.Why Southampton - how did it start ? 4.The First Step - The Partnership with the Council 5.The Energy Generation Plant 6.Our Consumers 7.Southampton - into the new Millennium PRESENTATION

4. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 1. What is CHP and District Heating

5. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Combined Heat & Power (CHP) - recovery of heat produced when generating electricity (usually wasted) What is CHP?

6. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS CHP - operates at 70-85% efficiency compared to typical power stations 25-35%. CHP - Replacing central power stations with more efficient local generation What is CHP?

7. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS On site heat, chilled water and electricity distribution network Used for distributing energy from boilers & CHP Current heating piping systems - heat losses are 1°C per km Reliability of current piping systems - 100% Large sections could use plastic PE-X Pipes What is District Energy ?

8. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 2. Group and Company Background

9. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Utilicom is the UK subsidiary of the Idex Group International Group of Family owned companies Established 1963 President - Alain Planchot Head office Paris Annual turnover 400 M Euros 3,000 employees Core business:-  Development, Operation & Maintenance of Community Heating Schemes

10. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Example Project: Palais de Congres - Paris 1,000 bed Hotel, cinema, theatre and retail complex – 200,000m 2 All plant in Energy Centre funded by Idex Energy supplies since 1972 Original 27 year contract renewed for a further circa 20 years Large scale heating, cooling and electricity generation plant

11. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Group turnover £11M, projected £20M in five years 80 Staff throughout UK Core Business -  Design  Development  Installation  Financing  O & M of district energy systems - including CHP, biomass etc….. Clients include BBC, Universities, City Council’s, Private Sector Housing Developers, and Local Authorities etc…. A stable, well established company, concentrating on our core business Currently supplying energy and managing services for over 20,000 dwellings across the UK

12. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Example Project: University of London CHP Schemes 4.5 MW of CHP serving UCL, UCLHT and five colleges of the University of London 20 year energy supply contracts – based on PFI/PPP model Operational since 1999 £6M capital cost Energy Sales £3M p.a. Already expanded to serve 3 third party consumers

13. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 3. Why Southampton ?

14. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Catalyst - The Geothermal Well and Resource

15. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Rock and the Pump

16. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 4. The First Step - The Partnership with the Council

17. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Cornerstone – The Joint Co-operation Agreement The Scheme has always had cross party support - the first step was to sign a Joint Co-Operation agreement - 1987 - first in the UK pre-dating PFI This committed Utilicom to : –Developing a district heating scheme in Southampton initially based around geothermal energy –Sell heat to Council buildings with agreed savings –Provide all necessary funding and technical/management expertise to ensure the scheme developed successfully –Provide open book accounting and a long term profit share to SCC and committed SCC to : –Take heat wherever practical for SCC buildings –Provide land for the Heat Station for a peppercorn –Help Utilicom promote the scheme to other potential users –Provide general support to Utilicom in developing the scheme - planning, highways etc… –Treat Utilicom as a ‘statutory utility’ within the boundaries of the City

18. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Company Organisation Structure UTILICOM GROUP LIMITED UTILICOM GROUP LIMITED UTILICOM LTD SGHC SOUTHAMPTON CITY COUNCIL UTILICOM LTD SGHC SOUTHAMPTON CITY COUNCIL CO-OPERATION AGREEMENT = Total Risk Transfer to the Private Sector

19. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Partnership Utilicom and SCC meet quarterly to plan new developments SCC representatives led by Executive Director (Mike Smith), building design, planning, environment, regeneration, highways etc.. Supplemented by regular, often daily, dialogue to ensure that the scheme develops to deliver the aims of both parties Currently saving organisations within the City over £0.25M per annum in energy costs and delivering 11,000 tons of Carbon Savings LA Councillor and Officer Champion are essential to making the scheme work – this has been one of the keys to the success of the Southampton scheme

20. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 5. The Energy Generation Plant

21. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Plant: 2 MW Geothermal Well 2 small scale CHP - 400kWe each Back up/top boilers around City operated by Utilicom - Civic Centre & Hospital 8 MW of chilled water plant – absorption and vapour compression 5.7 MW dual fuel Wartsila CHP generator All serving over 40 consumers via a network of over 11 km of heating & cooling pipes around the City Centre for a total capital cost of £7M Supplying over 70,000,000 kWh of energy each year with CO2 savings of 11,000 Tonnes p.a.

22. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS

23. Consumer interface/meter Buried Pre-insulated distribution mains Centralised Heat Sources CHP, Boilers etc The Southampton Energy Centre

24. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Our 5.7 MW CHP being delivered !

25. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS We also have smaller scale CHP and CH schemes !

26. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS HOLYROOD ESTATE City Council owned housing, approx 300 flats in 9 blocks, each with only a single room heater and electric immersion Utilicom designed and project managed installation of district heating and hot water system including CHP to serve entire estate Cost guarantee given by Utilicom to SCC for future energy supplies SCC Housing very satisfied - voids virtually gone and ability to let flats on the estate enormously increased.

27. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Holyrood Estate – 300 dwellings supplied with heat from local Energy Centre including CHP - guaranteed heat price, with full maintenance of all in dwelling equipment Public Sector Housing

28. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 6. The Consumers

29. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS WHO DO WE SERVE ? Consumers include: Civic Centre 4 Hotels RSH Hospital Offices Southampton Institute Swimming & Diving Complex Entire 53 Acre West Quay Shopping Centre Public and Private Sector Housing ……….. and many many more - largest Commercially developed district energy scheme in the UK - £2M of energy sales p.a.

30. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Why Connect ? Capital cost savings – connection charge up to 25% less than conventional plant Space savings – direct connections mean no plant space required – very valuable in urban areas Operating cost savings – at least 10% when compared to the alternative cost of heating/cooling/electricity - £0.25M Guaranteed savings – prices linked to basket of indices to ensure savings maintained throughout life of the contract Delivers on LA 21 and Kyoto carbon savings – 11,000 tons Ensures full and genuine outsourcing of energy supplies = risk transfer

31. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS How are connections funded ? Connection charges from the consumer Long term energy supply revenues – repaying bank or private sector finance Grant funding – Community Energy Fund and others…

32. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Do Consumers Connect ? Yes – because they understand the benefits, i.e. Barratt Homes a convert to the scheme However, many developers wish to use cheap electric heating – high emissions and operating costs Also building services consultants acting for potential consumers often prefer own plant as this is traditional and returns fees SCC/Utilicom work in partnership to demonstrate benefits and encourage use of Whole Life Cycle costing SCC can also encourage via the planning process, Section 106’s and land sale agreements

33. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Civic Centre – The first consumer

34. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS BBC TV Studios – heating 1990, cooling 2000

35. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Swimming and Diving Complex

36. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Connected Offices – Skandia, SCC, No.1 London Road

37. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS DeVere 5* Grand Harbour Hotel - Connected 1994 via 600m ‘energy link’ all heating and cooling from scheme

38. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS West Quay Shopping Centre - heated & chilled by our scheme

39. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Barratt’s Park View and the Dell developments – both connected to the scheme – circa 600 dwellings including Holyrood Estate - the first private housing in the UK to connect to an existing district energy scheme Private Housing

40. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Independent Study on Customer Satisfaction and Cost Effectiveness

41. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Barratt’s Park View Development Some of the Key Benefits: Capital cost savings - Barratt’s publish savings as £300 per unit Space savings No flues or gas pipework – removes gas from dwellings Unlimited supplies of hot water Operational cost savings The Residents Views: “The flat warms up quickly, it’s quick and cheap”, “the economy appealed to us” and “ we have constant hot water with good water pressure in the shower” The Survey: 78% were aware that the flat had community heating when they purchased it and 60% stated that it influenced their decision in a positive way ! 78% also replied that they would buy electricity from SGHC if available and 66% thought that lack of choice in a supplier wasn’t a problem

42. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Barratt’s - Urban Living Brochure

43. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Ex British Gas Offices being converted to 400 bedrooms 82 Flats and 40 one bed Studios for Student Accommodation Linked to our district heating scheme in June 2003 Key Worker Housing UNITE - Orions Point

44. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Civic Centre Heat Station De Vere Hotel The Dell - 164 Private Houses/Flats RSH Hospital Southampton Institute West Quay Shopping Centre

45. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS A selection of our satisfied consumers with their awards from us !

46. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS 7. Southampton - into the new Millennium

47. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS The Future – to 2010 Further large scale CHP - increase to 20 MW ? Heating and especially cooling mains continue to grow - energy sales doubled Electricity sales to local consumers Incorporation of other technologies –anaerobic digestion of the Cities Waste –fuel cells –biomass etc…- currently developing wood fired boilers/CHP schemes

48. WORKING IN PARTNERSHIP TO DELIVER SUSTAINABLE ENERGY SOLUTIONS Our Vision for SGHC Expand community heating/cooling throughout the City of Southampton - maximising use of CHP Demonstrate viability of innovative energy generation and distribution technologies Provide simple agreements for energy supplies ensuring long term energy savings Maintain 100% consumer supplies and satisfaction Promote Environmental issues whilst maintaining ‘No Green Premium’ Replicate & assist others in implementation of similar schemes