National Wealth Fund backs Solihull’s new low carbon Energy Network

The project will be the first heat network to receive funding from the NWF via a £9.6m loan provided through its Local Authority function. This low-cost long-term financing option will enable the Council and its delivery partners to complete installation of the pipework for the first phase of the project.

The project aligns with the NFW’s clean energy mandate and supports Government ambitions to increase the use of low carbon heat networks to 20% by 2050, up from 3% today. This drive is intended to help decarbonise the UK’s building stock, which is currently the second largest contributor to carbon emissions after transport.

The first phase of the network in Solihull will provide heat and power to public and private sector customers, including Council-owned buildings and education campuses. It is intended that future phases will then connect other buildings in the town centre and link to planned commercial or residential developments in line with the Council’s Town Centre Masterplan.

The project is being delivered by Vital Energi who will design, build, operate and maintain the new network. Vital Energi is a leading national player in the heat network and low carbon energy sector and has successfully delivered a range of exemplar, high-profile networks including Leeds PIPES and Mersey Heat.

The initial funding required to get this carbon saving scheme off the ground was provided by the Government’s Heat Networks Investment Project (HNIP) and West Midlands Combined Authority.

Minister for Energy Consumers Miatta Fahnbulleh said:

Heat networks like this one, which will provide buildings in the heart of Solihull with low-carbon, affordable heat and electricity, will play an essential role in the clean power transition.

By helping homes and businesses in Solihull to stay warm in a cheaper and more efficient way, this investment will help more people feel the benefits of our drive towards clean power as part of the Plan for Change.

Lorna Pimlott, National Wealth Fund Managing Director, Local Authority Advisory & Lending, said:

Heat networks have a key role to play in the nation’s transition to net zero and we’re pleased to support Solihull Council in this important project. The NWF’s lower cost of finance will enable the council and Vital Energi to deliver the first phase of the heat network on time and within budget, enabling consumers to cost-effectively decarbonise their buildings while providing greater energy price resilience in the future.

Councillor Andy Mackiewicz, Portfolio Holder for Climate Change and Planning said:

For individual buildings, decarbonising heat is expensive and often disruptive to occupants. A town centre energy network enables existing buildings and new developments to benefit from centrally based low carbon heat generation with minimal disruption and in a cost-effective manner benefitting from economies of scale. It also provides opportunities to instal rooftop solar panels that can supply the energy network customers, utilising roof space and ultimately protecting the green belt.

The real beauty of this scheme is that it can expand through subsequent phases to meet growing demand and link into new buildings and developments. As we progress with the scheme, we anticipate signing up many more customers who will be able to see the obvious benefit it can provide.

Before embarking on this exciting scheme, we undertook detailed financial modelling as part of the business case, the favourable loan we have been able to secure from the NWF improves the financial case for the scheme which will recover all of its capital investment costs over its lifetime.