We are delighted to announce that our client West Dunbartonshire Council (WDC) has secured £6m capital investment from Scottish Government for the Queens Quay District Heating Network. This funding matches the £6m funding commitment already made by the Council.
Since October 2016, we have been working with West Dunbartonshire Council (WDC) on innovative plans to use water from the River Clyde to heat and cool homes and businesses in Queens Quay, a 160-acre brownfield site located at Clydebank, Scotland.
In order to ensure long term control over expansion and investment, the council will establish a Municipal Energy Supply Company which will procure the construction, operation and management of the district heat network.
The project is an ambitious proposal to redevelop the former shipyard, famous for building some of the world’s greatest ships which closed over thirty years ago, to provide a modern mixed-use development which will be delivered over a number of years. Up to 200 rented homes will be developed on the site by Registered Social Landlords (RSLs) as well as 1,000 private homes, which will benefit from the new heat network. A number of public buildings will also receive their heating supply via the network including West College Scotland, Clydebank’s new Leisure Centre, a new 80 bed care home and health centre, the Council’s offices at Aurora House, Titan Business Centre, the Town Hall and Clydebank Library.
WDC enlisted our services, alongside F1F9 a financial modelling consultancy, to deliver a business and investment case and financial model for the project.
The business case adopts the Five Case Model Methodology, of the strategic case, the economic case, the commercial case, the financial case and the management case. This model has been successfully used by UK Government departments and the wider public sector for many years,) and in this case supports the grant application to the Low Carbon Infrastructure Transformation Programme.
The financial model supports the investment case and demonstrates that, in the long term, the network can generate a positive return. The model developed passed through three rounds of investment scrutiny, including independent review from Ernst and Young.
Senior Manager, Ben Lynch said “We are very proud to have taken this project from concept to an investment grade proposition. Too many district heating projects get stuck in an iterative cycle between the technical and commercial. We hope that this example gives other Councils the confidence to press ahead with transformational low carbon infrastructure projects”
Richard Cairns, West Dunbartonshire Council’s Strategic Director for Regeneration, Environment & Growth said “Clydebank is an area where there is a relatively high incidence of fuel poverty. The availability of a district heat network with reduced heat tariff would contribute towards social inclusion through the alleviation of fuel poverty. Furthermore, utilising the abundant local renewable resource of river water as an alternative to fossil fuel will make a major contribution towards the Council’s climate change targets to reduce CO2 emissions by 15% over the next 7 years.”
A new purpose built energy centre will be created at Queens Quay where water source heat pumps will extract heat from the river water on a commercial scale and distribute it via a district heat network to end customers.
For more information on this project or to seek our advice on your own district heating project, please contact us contact us.