There are several stages required to fully engage with potential off-takers. Typically the process commences with an explanation aimed at dispelling the myths and misconceptions surrounding heat networks, the perceived lack of pricing control and the ability of the Network Operator to maintain resilience and guarantee continuity of supply.
Following an invitation to positively engage, the below process usually ensues:-
- In depth, physical site surveys, accompanied by historic data analysis and energy consumption profiling, for heat, electricity and cooling over the site/estate.
- Physical infrastructure audit, scheduling all existing plant and equipment, its location on site, age, capacity, interfaces and connections. The operating efficiencies, if available, and any “backlog maintenance schedule” together with any planned equipment replacement strategies.
- Current heating fuel type, historic costs (for gas and electricity) and duration of supply contract for each.
- Existing on-site renewable technologies and plans for such.
- Major capital projects planned, including energy saving retrofit schemes
- Secondary heat distribution and conservations projects planned.
- Resilience and back-up requirements (on site).
- Future energy strategy, consumption predictions (to accommodate potential increase in service demands).
- Decarbonisation trajectory and associated reporting functions required.
- Examine future stakeholder options for “energy strategy” with Risk Assessment and benefit analysis. Sensitivity analysis of each option, in comparison to ”do-nothing”, compared with connection to the OPEN.
Following completion of the above (which remains without obligation to Stakeholder) MEPL submits a draft appraisal, broadly setting out a methodology to connect to the OPEN, together with a set of achievable outputs/objectives that the Stakeholder it is capable of benefiting from, by it connecting to the OPEN. These are referred to as the “Deliverables” and broadly cover : –
- Carbon emission reduction targets and achievable trajectory.
- Future energy cost, Tariff and Pricing structure over the life of the Off-taker Agreement.
- Reductions, both in Capex and on-site maintenance costs.
- Energy reduction and conservation measures and their funding.
When the Stakeholder agrees the MEPL approach and methodology, a Memorandum of Understanding (“MoU”) is be entered into between the parties. The purpose of the MoU is to detail the undertakings, obligations and exchange of information, required between Stakeholders and MEPL to work together, within a strictly observed time-schedule, to enable the Stakeholder to consider a Detailed Proposal from MEPL (including a Works Programme and Timeline, with a “go-live” date), and as appropriate, formally approve and commit to contractual obligations (an Off-taker Agreement) that satisfy the agreed commercial objectives (within a tariff and pricing structure), with fully quantified Deliverables.
This enables MEPL (within the comfort of the MoU) to develop a bespoke physical technical engineering solution with Detailed Design Development and supply strategy, together with an accompanying financial and pricing structure bespoke for each off-taker, which is then embodied into a Detailed Proposal, capable of being incorporated into a Business Case and then into the Supply Agreement. We would then enter into Legal and Development workstreams