Our market-leading team has been deeply involved at the heart of the district heating industry for nearly a decade, acting on many of the biggest schemes in the UK.
Recognised for our deep expertise in structuring, applicable legislation and contract drafting, team members were selected by the Government to assist in the drafting of guidance for local authority and private district heating scheme promotors and developers and by industry body, the Heat Trust, to sit on its committee.
We provide a wide spectrum of services to our heating and cooling clients, ranging from commercial structuring, governance and supplier of last resort arrangements, to drafting of heat concessions, heat connection and supply agreements, D&B and O&M agreements as well as use of system agreements and bulk supply agreements for unbundled networks.
Some examples of our district heating and cooling work include:
Department of Energy and Climate Change, Heat Networks Delivery Unit, drafting district heating guidance
The Department of Energy & Climate Change’s Heat Network Delivery Unit set out to produce accessible and valuable guidance for local authorities to assist their understanding of district heating schemes and support their production of high quality business cases.
- drafting guidance on procurement and state aid issues;
- working alongside Arup, drafting guidance on commercial structures;
- drafting guidance on contracts.
- promoting a new approach to understanding the anatomy of district heating projects, distinguishing between governance, commercial structure, choice of vehicle and contract matrix before understanding the overlaps between them;
- building from the ground up (real opportunities) rather than top down (that can sometimes lead to a mismatch between ambition and reality).
London Borough of Enfield set-up of the “Lee Valley Heat Network”
- one of the most ambitious local authority led new build district heating schemes in the UK, led by the London Borough of Enfield (through its wholly owned subsidiary, Energetik);
- aiming to supply heat to more than 8,000 domestic customers plus commercial customers;
- taking heat from the North London Waste Authority’s EFW plant at Edmonton in North London, and from dedicated energy centres operated by Energetik, connecting to the strategic heat network or on satellite schemes.
- advice on structuring and governance including reports on vires, company law and procurement;
- advising on funding from various sources, including loan agreements and state aid considerations;
- drafting separate out-sourced works packages (including combined DBOM, separate satellite network O&M, separate metering, billing and customer support agreements);
- drafting all major bespoke agreements, from development of portfolio contracting framework, to connection and supply agreements.
Bringing full project experience, end-to-end and including regulatory expertise.
Plymouth City Council, structuring for the “Cultural Quarter Heat Network”
Plymouth City Council have ambitious plans to create a city-wide district heating network, connecting the University of Plymouth, the History Centre and the wider Cultural Quarter, as well as further afield.
- facilitating stakeholder engagement meeting, seeking to distill relevant stakeholder objectives and to form the platform for commercial negotiations;
- drawing up heads of terms of agreement and full contract drafting;
- addressing governance and broader commercial-legal issues.
- leveraging extensive experience in the heat market to help stakeholders identify areas of agreement as well as gaps requiring further exploration;
- fast-tracking efficient production of deliverables through use of extensive library of heat precedents;
- promoting adoption of simple and effective solutions before complex ones.
Knight Dragon, set-up of the “Greenwich Peninsula Heat Network”
- regeneration of the Greenwich Peninsula in London by Knight Dragon;
- UK’s largest new-build district heating scheme
- connections already being made to 10,000 new homes and 3.5m square feet of commercial space.
- advising on the structuring, governance, funding and contracting of the DH scheme now serving customers on the Peninsula;
- advising on State Aid and consumer protection issues;
- on-going work associated with connection and supply arrangements and providing market intelligence.
- to reflect client objectives, implementing a structure using an AssetCo (procuring D&B of the heat network and retaining and enduring ownership right), leasing through a Use of System Agreement to a HeatCo (operating and maintaining and supplying heat on an enduring basis), with day-to-day operation outsourced to an Operator (ensuring continuity in consumer contracting);
- creating a novel Governance Agreement (a private sector structure established to mimic a municipal HeatCo), to ensure that consumer protection and ‘supplier of last resort’ concerns were met.
Metropolitan Homes, grant of concession for the “Clapham Park District Heating Scheme”
- Under procurement (January/ February 2016)
- New district heating scheme to provide low carbon, low cost heat to approximately 2,000 homes
- ESCO procured to provide end to end services from installation of pipework to customer care
Lux Nova is advising housing provider, Metropolitan, on its procurement to engage a strategic partners for the financing, construction and operation and maintenance of a District Heating Scheme on the regenerated Clapham Park. Lux Nova Partners has developed the energy service company Concession Agreement and ancillary documentation for delivery of these energy service company services and has assisted the Housing Association with the procurement (under restricted procedure).
Given Lux Nova’s broad and in-depth knowledge of DH Schemes, we have been able to provide Metropolitan with robust concession documentation which is known by us to be acceptable across the DH market, enabling Metropolitan to undertake a restricted procedure procurement and ensure costs are kept down.
LendLease, grant of concession for the “Elephant & Castle District Heating Scheme”
- Under construction
- E.ON installing, operating and maintaining a district heating scheme under Lend Lease concession to serve Elephant Park
- Innovative structure with bio-gas offsets used to lower the carbon content of heat provided
- Low carbon, low cost heat will serve almost 3,000 homes
We advised Lend Lease, the master developer, on the drafting of the full suite of contracts associated with the grant of a concession to E.ON to supply heat infrastructure and services to the predominantly residential and affordable housing regeneration of the Elephant & Castle area. We now have an on-going role, advising on each plot connection agreement, as plots are developed out in sequence.
From the outset, we advised on how best the client could achieve its aggressive timetable and delivered ‘value add’ through the transferability of our experience working with the client and opposite the energy supplier on other projects, familiarity with the negotiating team and our stake in the documentation in use. From our engagement in earnest, this project will have made record progress for a scheme of this size and complexity, closing in just under 9 months.