Agenda item

The Climate Commissioner provided the Members with an update on the market engagement to date on a potential heat network in Belfast. She referred to work undertaken with institutional investors, heat developers and other councils as part of that process.

            The Members were informed that Belfast, with its density of buildings, was ideally suited to the introduction of a heat network which formed a key part of the local energy plan, alongside the retro-fit of buildings, as part of the Council’s net-zero carbon ambitions.

            The Climate Commissioner reported that a Heat Network Working Group had been established to inform the development of the Council’s approach to incentivising the development of a heat network in Belfast, and that the Group would be encouraging public sector bodies, which owned buildings in the city with a high heat demand, to engage in discussions and market engagement as potential heat off-takers.

            The Committee was informed that it was proposed to appoint a commercial and legal advisor to support the market engagement process, including the appointment of a technical advisor to support the market engagement and the provision of advice on technical requirements, subject to the approval of the Strategic Policy and Resources Committee.

            The Climate Commissioner provided the Members with an overview of the key elements associated with a heat network. She outlined measures to increase the viability of heat networks, including the introduction of waste heat into the heat production process, and the installation of a direct wire to alternative off-grid sources of energy.

            The Committee was informed of the importance attached to securing off-taker heat agreements to encourage investment in heat network schemes and provided the Members with a range of delivery models for heat networks, which could be incorporated as part of any future delivery scheme. It was reported that early market engagement with heat developers had suggested that there was strong private sector interest to invest in heat networks with the provision of lands for the development of an energy centre, provision of grant finance and an available source of waste heat energy, as being strong support structures as part of the heat network development process. The Climate Commissioner reported on some of the barriers in place currently to the creation of viable heat networks in Northern Ireland, namely, the fact that there was currently no financial support available for heat-network schemes and no regulatory system in place.

            The Climate Commissioner reported that the £150,000 secured from the Innovate UK Project – Belfast Net-Zero Pathfinder project, was instrumental in securing business funding analysis, including commercial and legal assistance to develop and secure commercial contractual arrangements in the absence of statutory regulation.

            The Committee was informed that it was important to establish the heat demand requirements prior to the establishment of a series of round table discussions, with relevant parties invited to attend, including off-takers, investors and industry representatives.

            In response to a request from a Member, the Climate Commissioner agreed to invite representatives from other authorities who had developed successful heat-network schemes, including off-takers, to present to a future  meeting of the Committee. The Committee agreed also that representatives from Bradford City Council be invited to attend a future meeting of the Committee in order to provide information on the development of their heat-network scheme.

            A Member raised concerns in regard to the development of 15 year heat-network contracts and the viability of such contracts should changes occur in terms of occupancy levels and associated heat demand for those public sector buildings. The Member referred also to the problems associated with previous district network schemes which had been developed in certain parts of the city.

            In response, the Climate Commissioner reported that contracts were required to be agreed which protected the consumer in terms of price, and that greater priced leverage could be achieved by collaboration with other stakeholders to ensure that customers got the best value on the unit costs of heat and energy.

            The Committee noted the information which had been provided and agreed also to receive a presentation from representatives from neighbourhood district heating schemes which had been developed successfully, and which could provide a valuable insight into both, the technical and contractual  frameworks to secure the best value for money in terms of the operation of long-term district heating energy contracts.