City centre heating system to be expanded - despite low revenues and high costs

[dutchman]

University buildings and courts could be heated by expanded low-carbon network



Plans to expand a low-carbon heating system that currently feeds key buildings in Coventry city centre looks set to get the go ahead this week along with a contract extension to the company behind it.

The Heatline district heat network supplies recovered heat from the Energy from Waste (EfW) Facility on London Road to nine city centre buildings including the Council House, two sports facilities including the Wave, the Herbert Art Gallery and Museum, a hotel, a student accommodation block and Coventry Cathedral. All the locations are fed through a series of underground pipes more than 6km long.

The original network cost around £5.6m which was paid for through £2.2m of Homes and Communities Agency (HCA) grant funding with the remainder financed by the Coventry District Energy Company (CDEC). This was set-up by Cofely but has subsequently changed ownership several times and is now a wholly owned subsidiary of Bring Energy.

The network has already been expanded at a cost of around £3.6m. This was funded using £850k developer contributions from Friargate Coventry LLP and £1m of Coventry City Council capital investment with the remainder financed by CDEC through its parent company.

At a meeting of the council’s business, economy and enterprise scrutiny board, councillors were told that overall revenues have been lower than forecast whilst costs have been higher than anticipated. A report prepared for the meeting explained that the relatively low customer base for the scale of investment was an underlying factor for the current financial performance.

Funding from the West Midlands Combined Authority is also being used to potentially connect a further 18 buildings but in order to maximise the grant support that CDEC can attract, a contract extension to 2043 has been requested. The report adds: “Without the contract extension, CDEC would not be able to offer the new customers a commercially viable heat price and the expansion would not take place. The overall expansion will be funded through a combination of customer contributions, grant funding and CDEC investment.”

https://www.coventrytelegraph.net/news/coventry-news/coventry-city-centre-heating-system-32950175