Guidance

Heat network detailed project development

This set of documents is a reference resource for heat network projects that are moving towards commercialisation.

Documents

Strategic and commercial case development

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Heads of Terms template

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Economic and financial guidance

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Procurement and State Aid

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Details

This guidance, commissioned by BEIS, is a reference resource for heat network projects that are moving towards commercialisation.

The documents are structured around the first 4 cases of HMT’s ‘Five-Case Business Case Model’, which considers the viability of the project from 5 perspectives:

  • strategic
  • economic
  • commercial
  • financial
  • management
  • procurement and state aid

Strategic and commercial guidance

This guidance supports completion of the Strategic Case and Commercial Case for a heat network project:

  • Strategic Case - a summary and reference matrix of relevant legislation, policy and strategy, and guidance on key drivers for delivery of heat networks

  • Commercial Case:

    • the different roles in the delivery of a heat network, and the risks and opportunities associated with each role
    • typical contracts used to govern relationships between parties
    • delivery models for heat networks, i.e. combinations of role allocations to different parties and the contracts which govern relationship between the parties; and tax and insurance implications for heat networks

Heads of Terms

15 contract heads of terms (HoTs) documents for use by local authorities as a starting point for developing bespoke agreements for particular heat network projects.

Economic and financial guidance

The journey through the development of a Financial Model, which underpins the commercial reality of the Outline Business Case (OBC): use to identify areas where commercial viability of a project can be improved, and where customer protection for the end user can be offered. Topics covered include:

  • developing the Techno-Economic Model into the Financial Model
  • heat pricing
  • revenue streams and avoided costs – maximising opportunities

Procurement and state aid

An examination of the public law factors that will govern a district heating scheme, with practical advice alongside the legal analysis. It provides case study examples and practical tips for managing the often complex, and occasionally over-lapping, public law issues that arise on a district heating scheme. Topics covered include:

  • “powers”
  • procurement law
  • state aid
Published 3 July 2018