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How Enfield is leading the way for municipally owned heat networks

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Enfield LBC’s energy company Energetik is on its way to revolutionise the local energy market and be the supplier to trust.

 

  • Project: Energetik, Enfield LBC’s heat network company
  • Objectives: To be a trusted supplier, providing better, environmentally-friendly energy
  • Timescale: At least 15,000 residential and commercial customers to be connected over the next 40 years, with the opportunity to supply 30,000 plus
  • Cost to authority: £58m council investment in this £85m capital project, with the remainder coming from heat sales and connection fees
  • Number of staff working on project: Seven
  • Outcomes: A series of low-carbon heat networks that put the customer first, while returning benefits to the local area
  • Officer contact details: Jeff Laidler

Energetik is the local energy company owned by Enfield LBC, set up to supply over 15,000 homes and businesses across north London with low carbon heat and hot water through a series of heat networks. We provide energy that is better value, reliable and environmentally friendly.

Now operational for almost a year, we are gaining recognition for our customer-centric approach and public-sector delivery model. 

Heat networks are recognised as the preferable source of sustainable heating in urban areas, forming an essential part of the UK’s clean energy infrastructure.

Unfortunately, the heat network industry is not yet regulated in the same way as gas and electricity, and recent research from the government and Competition & Markets Authority highlights the disparity between the level of service, reliability and pricing experienced by the UK’s 500,000 heat network customers.

Energetik has been set up to address these issues and ensure customers are treated fairly. It is one of the UK’s first publicly owned and publicly funded heat network companies.

The council role

Enfield LBC has major regeneration plans and identified an ambitious and innovative opportunity to support development objectives and add value to the way it addresses its key priorities.

In this vein, the council set up its own energy company in 2015, taking delivery of the borough’s low carbon energy infrastructure in-house. The company could go several steps further than a private-sector equivalent energy services company to control the quality of energy supply to new developments.

These steps include investing in heat networks of a higher standard than the industry norm, designing these networks to be expanded, and thinking holistically about the area’s resources to make use of waste heat. This all adds up to a more secure energy infrastructure for Enfield’s long-term future.

Enfield Energetik customer feedback

Energetik runs regular events for customers to ask questions and provide feedback

Energetik’s heat networks consist of energy centres that transport heat through highly insulated pipes to homes and businesses across Enfield. Its largest heat network at Meridian Water will supply over 10,000 homes, capturing waste heat from the new energy recovery facility at the Edmonton EcoPark when it goes live in 2026.

The other three networks at Arnos Grove, Ponders End and Oakwood are too far away to physically connect to the recovery facility at this stage. They have their own energy centres powered by gas-fired combined heat and power.

Located in key regeneration areas, each of the heat networks is scalable to supply additional residential and commercial customers.

Energetik’s vision is “to revolutionise the local energy market and be the supplier to trust”. Its mission is simple: to provide better value energy that’s reliable and better for the environment.

Company strategy

Energetik is private limited company that’s wholly owned by the local authority. Its business model is focused on putting its customers first, providing fair prices and fantastic service. Once operational costs are covered any profits will be reinvested back into the borough for local benefit. This is municipalisation of energy.

Setting up an energy company to do things differently hasn’t happened overnight. Already seven years in the making, Energetik started supplying its first customers in October 2017. The history is a complex one.

 

2011Commissioned a feasibility study to highlight the scale of the opportunity.

2012

Enfield LBC set up its own energy company.

2013

Recruited industry specialists to set up and run the company with over 100 years’ combined experience in operating heat networks.

 

Developed the Energetik brand: looking to challenger suppliers like Ovo and GoodEnergy to create a credible and trustworthy identity has been key to winning heart and minds.

2015

Registered at Companies House.

 

Recruited industry specialist non-executive directors.

2015 – 2017

Completed procurement exercises to appoint Energetik’s key delivery partners to

design, build and operate Energetik’s energy centre and heat network at Meridian Water and to provide excellent customer service, metering and billing.

 

Developed Energetik’s business plan and supporting cabinet report, including a gateway review and independent value-for-money assessment – due diligence and scrutiny was vital to securing council investment.

Jan 2017

Enfield Council approved Energetik’s business plan and agreed to invest £58m in this £85m capital project, with the remainder coming from heat sales and connection fees.

Oct 2017

Registered with the Heat Trust, the industry’s independent heat network customer protection scheme.

 

Started supplying the company’s first customers at Arnos Grove heat network: a mixed tenure estate regeneration scheme.

Dec 2017

Ponders End heat network went into operation, supplying customers at Electric Quarter housing development

2018

Energetik is on track to submit a planning application for its Meridian Water energy centre.

 

Sharing this learning

The heat network industry is set to grow rapidly over the coming years, and local authorities and registered providers are uniquely placed to form energy service companies to put their customers first.

Just doing heat networks is no longer good enough. We need to do them well, rolling them out at scale and to a standard that delivers better value energy. Eventually this will become the norm – but for Energetik it had to be the norm from the start.

As mentioned above, it was key to put the customer first. The equipment installed and the detail of the contracts must work for them. Remember, they don’t have a choice of heat supplier!

With stakeholder engagement, it is wise to start at the top, working with the chief executive, finance director and politicians to understand their drivers and the benefits of a heat network and create a clear mandate for action. At the same time, it’s advisable to use planning policy as a lever, requiring a standard of heat networks that deliver and can be expanded.

Enfield Energetik customer tour

Customers are invited on a tour of the energy centre that supplies their homes’ heating and hot water

Such projects must be commercially viable. Ensure your financial model is based on sound assumptions and operational reality not theoretical numbers. A strong business case is always able to be financed; leave the funding to the last possible stage to mitigate the risk of taking out loans before you need them.

To build strong governance, bring in a team with operational industry experience and non-executive directors who can constructively challenge this expertise.

Additionally, don’t forget about the government green book for evaluating projects. Even as a private limited company, it’s still public money that’s being invested. Due diligence is expensive and time consuming, but vital to ensuring the business plan is robust.

 

Jeff Laidler, business development director, Energetik’; head of sustainability, Enfield LBC

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