The Higher Education Funding Council for England (HEFCE) carbon reduction strategy commits all UK universities to delivering a 43% reduction in carbon emissions by 2020, compared with a 2005 baseline. When the University of Reading needed help developing a heat network to deliver carbon emission reductions across its campus, it turned to us to provide energy market expertise and funding application support.
A heat network is a system of insulated pipes that deliver heat from a central source to a number of different users. In addition to helping to reduce CO2 emissions from heating, heat networks also bring financial savings through increased energy efficiency and a reduction in fuel use. In 2015 the Government launched the Heat Network Investment Project (HNIP), which will provide up to £320 million of funding for new heat networks and support up to 200 projects by 2021. This scheme has been live and open for applications since October 2018.
As part of its efforts towards meeting the HEFCE 43% carbon reduction target, the University of Reading was considering a number of heat network projects, including a surface water source heat pump at Greenlands Henley Business School.
We supported the University in preparing applications for HNIP funding towards the commercialisation of these heat network projects, including
- Reviewing the eligibility requirements for the scheme, covering themes such as organisation type and ownership rights, commercial structure of the heat network, funding requirements and additionality tests;
- Identifying the potential investment structures, associated contractual structures, delivery models, key investor requirements and investor appetite for this type of investment;
- Analysing the evidence against the eligibility and financing requirements of the HNIP pilot programme in order to identify any gaps in the evidence base to show where further detailed work was required before approaching investors.
Subsequently, the University has decided to explore the possibility of taking the water source heat pump forward into development, and expects it would deliver carbon savings of 263 tonnes per year. We will be supporting the University in approaching the investment community in the future.
Dan Fernbank, Energy & Sustainability Manager at the University of Reading said:
“The University of Reading is committed to cutting its carbon emissions, and it’s something we know both our staff and students care deeply about. With support from Eunomia, we’ve been able to identify potential funding sources for our innovative heat network, and look forward to developing these opportunities further with them. Once implemented, we believe this scheme can be a flagship for similar low carbon heating solutions for other large organisations.”
Project Manager Laura Williams said:
“Eunomia has considerable experience working on the design and management of funding programmes, and has a proven track record of supporting successful applications. We also have strong links with investors and private equity funds and can offer support on project financing options and investor requirements. All of this puts us in a position to help with heat network projects at any stage of development. Moreover, working with the University of Reading has given us a valuable insight into both the challenges faced by institutions when developing heat network projects and the potential advantages.”