Strategy 1 of 8
It is vitally important to ascertain from the outset of a scheme what are the principal drivers of any Energy scheme. District Heating Schemes need to offer the end-user a low cost, secure and reliable service whilst also delivering value to the leading developer and/or investor. This needs to be achieved whilst providing the target environmental benefits and the planning conditions imposed on the site. Using its experience and industry know-how, Ener-Vate can work with the client to ensure all aspects of the scheme requirements are evaluated in a balanced way. The scheme begins with the correct motives and understanding of how each driver impacts the others. An essential aspect of initial project development and strategy is awareness of the risks and how each should be modelled and balanced. Each scheme is unique; therefore, a thorough assessment of risk and potential reward should be undertaken early to establish the strategy. This should include the short, medium and longer-term ambitions of the investor.
Market Knowledge 2 of 8
Ener-Vate has vast experience within the UK District Heating market, with each director having worked within the industry for over ten years. Our wide-ranging portfolio of clients has led us to work with and alongside most of the major market suppliers, enabling us to build a thorough database of information that we can use to help clients evaluate market players. We consistently update the costs we hold based on the most recent information received and use these within our modelling assumptions. Having this deep and wide market knowledge enables us to help the client develop schemes from the outset in a way that will attract the best investment from the ESCo providers and Design & Build/Operation and Maintenance providers. We understand the market's strengths and weaknesses and this knowledge help to deliver the required results.
Procurement 3 of 8
With the knowledge of the market in place, Ener-Vate can provide our clients with a full experienced and knowledgeable end-to-end procurement service of market engagement. With the full input of the client and based on the strategy required by the investor, we can write the initial tender pack that are used to engage with the market, evaluate and interview the tenderers and then produce full scoring and evaluation matrix that aid final appointment by producing an auditable trail of procurement whilst gaining the most value.
Structure 4 of 8
Once the initial evaluation of the scheme investors, the scheme’s drivers and the scheme’s intended outcomes are developed at the initial stage, it is vital to prepare the scheme's structure in the most appropriate way to deliver the required outputs. Ener-Vate understands the most common structure options prevalent in the market today and evaluates alternate structures bespoke to the client depending on his current and future aspirations and potential exit strategies. It is imperative that the structure balances all of the potential risks and rewards of each of the parties involved whilst maintaining the continuity of responsibility of delivering the heat to end-users in a secure, low-cost manner. Knowing the most common structures in the market helps us ensure that it is engaged in a way that will produce the best possible response and investment.
Commercial Modelling 5 of 8
Commercial Modelling of a project has to be a process that adapts to the changing conditions of the property and energy sector. The way the commercial modelling is carried out takes into account all aspects of the scheme. It is imperative to understand how each of the commercial inputs, the client information, the project information and timelines and masterplan assumptions can impact the outputs and viability of a scheme. Ener-Vate is very experienced in this aspect of project development. We know which are the most important items to balance correctly to achieve the best result for developers and customers alike. The commercial models produced are presented to clients in an easy to view format, which highlights the main areas of risk. We create an easily adaptable model in which different input and masterplan scenarios can be considered to assess the impact on the modelling outputs without fundamentally changing the background model.
Technical Design 6 of 8
A technical design is an obvious requirement for all district heating schemes to ensure the drivers and target outputs can be met. However, sometimes the technical aspect of the development of a scheme can dominate all other factors that can lead to an imbalance. Clients can spend unnecessary early cash producing a high level of technical design not required at early project development stages.
Ener-Vate has a good depth of understanding of all the factors, such as building blocks of the technical solution based on years of producing early modelling outputs and options solutions for clients that can be applied to schemes at the early stage. Once the direction and basic structure of the scheme are known, we then engage with and help the client to develop a more detailed technical solution alongside the client design team or external, recognised industry design contractors.
Contractual Structure 7 of 8
Our excellent knowledge of the structures and inter-relationships of the legal agreements helps the client to ensure all risk transfers are carried out in the best way possible to deliver a successful scheme. The legal agreement’s structure is one of the largest tasks that need to be undertaken to develop a district heating scheme. The various contracts between the parties of the agreed structure must deliver heat to the end customer in a secure and low-cost way that can be forecast long into the future. Ener-Vate sits with the client and his legal team to negotiate the contract suite with the suppliers. This includes the main project agreement between the client and the nominated ESCo (often known as the Concession Agreement) along with all the schedules such as:
• Customer supply agreements (Residential and Commercial)
• Guaranteed supply conditions
• Price methodologies and comparator
• Plot connection agreements.
• Housing Authority Agreements
• D&B Contracts
• O&M Contracts
• Loan/funding agreements
• Government benefit applications
• 3rd Party Thermal Party Agreements
ESCo Performance Monitoring 8 of 8
ESCo Performance Monitoring
Once a scheme is operational, it is important that it delivers the requirements on customer cost and satisfaction and all environmental targets. In addition, there will be reporting requirements within the ESCo project agreement with the client requiring it to report its operational performance regularly. Using its experience, Ener-Vate can provide a supporting asset management service to the client providing knowledgeable insight into ESCo performance. We will aid the client to identify any early signs of poor performance and/or trends mitigation.
We also help to liaise with customers of the ESCo, providing an independent view to any operational issues that arise. Another aspect of the operational phase is to evaluate the benefits of 3rd party connections or sources of heat that can add additional value to the scheme.