Our clients undertake property developments which are years in the planning and completion yet need to be future proofed in their delivery of infrastructure services. This is set against a backdrop of increasing societal demands for low carbon, integrated energy solutions such as de-carbonisation of heat and the integration of EV, battery storage and smart energy systems.
Since 2001, we have played a pivotal role in helping our clients realise commercial value from ‘unusual asset’ opportunities that traditionally form a core element of their investments yet too often sit outside of their asset valuations.
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District Energy is becoming a familiar term in the UK and describes the delivery of heat, in the form of hot water, around a defined network of pipes, from a centralised energy centre.
The significant carbon benefits to be derived from these networks means that Property developers are increasingly including them in their development plans in order to comply with planning and/or achieve CO2 targets.
Whilst there is a growing body of expertise focused on the design and build of these assets far less attention is paid to the commercial value, future governance, the manner in which they will be owned and operated and the partners with whom a developer might work in order to maximise the benefits both to themselves and to the future occupiers.
With regulation on the horizon and technological solutions constantly evolving it is critical that the strategy for the development of these assets is properly considered and commercialised.
The UK’s electricity distribution network is divided into six areas controlled by 6 different Groups owning 14 different Distribution Network Operators (DNO’s).
In its role to ensure fair and competitive pricing OFGEM created the right for other regulated entities to own and operate local electricity distribution infrastructure within the DNO areas.
These are called Independent Distribution Network Operators (IDNO’s) and are licensed to own and operate extensions to the DNO networks on new developments and pay the developer an asset value. This has no impact on consumer choice or price.
Approximately 50% of UK developments work with IDNO’s with the other 50% working with the incumbent DNO's and receiving no asset value. Most developers leave the appointment of the IDNO to their main contractor.
The contractor will appoint an Independent Connection Provider (ICP) to carry out the design and build of the electrical infrastructure and the ICP will appoint an IDNO, often a sister company, to adopt the network. The asset value payable by the IDNO will go to the ICP, or the main contractor who will reduce the overall contract price.
Whether the full asset value is recognised and passed onto the developer is usually unknown as the asset value is not stated as a separate figure.
Separating the IDNO procurement from the main contract and procuring it separately creates transparency and usually leads to higher asset values and reduced reinforcement costs.
More recently we have applied our skills and capabilities to helping our clients understand and exploit the expansion of electric vehicle charging.
The provision of EV charging infrastructure is inherently attractive because it not only future proofs the asset in which it is installed, it also offers the potential for significant additional revenue streams.
However, for all property owners, it is not just the case of installing EV chargers, what is critical is the long-term business model supporting the provision and the evolution of EV charging services, and how it fits within their overall energy strategy.
The local storage of electricity is becoming a fundamental element in the delivery of low carbon energy strategies but its success depends on its proper integration into the whole gamut of utility and energy solutions deployed on a site or regeneration project.
Understanding how these assets can be strategically utilised to add value not only in their own right but to other assets such as district energy, EV charging etc. is fundamental to maximising both the carbon benefits and value for money.
With the right strategy on-site Battery Storage can significantly enhance the performance of other assets within the overall energy envelop as well as becoming a significant revenue generator in its own right.
PV is often required as part of low carbon planning conditions for developments, but it should always be considered in order to maximise the energy efficiencies for a development.
There is increasing energy demands on properties for heating, general use, and electric vehicle charging, and maximising the benefits of a renewable energy source in combination with considerations like battery storage will help future proof the energy strategy for property developments.
Increasingly there is a move away from gas driven, or biomass driven CHP for district heat networks, instead heat pumps are being considered as the engine for district heat networks.
Typically, air source heat pumps (ASHP) as they have the benefit of offering low carbon heating at a reasonable capital cost.
However, it should be considered that ASHP’s require power for operation and may need to be positioned on the outside of buildings.
This last point is mitigated by centralising the system (district heat network) which allows it to benefit from the diversity of heat demand across the development which decreases the peak heat loads with more connections. This will decrease the required capacity of the heat pumps, with a significant impact on the capital cost and replacement cost in the future.
Often ground source heat pumps (GSHP) are overlooked in district heat networks, and yet ground source heat pumps achieve higher performance than air source heat pumps due to stable ground temperatures.
Whilst in summer the COP (ratio of useful heating or cooling provided to energy input required) of the ASHP might still be competitive, the COP in winter drops to roughly half of the COP of the GSHP, at a time when the heat demand is at its peak.
Lorraine is Chairman of Sellafield Limited, Schroder Real Estate Investment Trust Limited, the Radioactive Waste Management Advisory Council and Inventa Partners Limited. She recently stepped down as Chairman of London & Continental Railways Ltd, as a Non-Executive Director of Thames Water and as a Governor at the University of the Arts, London.
Lorraine was Chief Executive of Chesterton International plc and prior to that held various senior positions at Prudential Corporation, Morgan Stanley, and Regus.
She is a former Chairman of London Thames Gateway Development Corporation and Central London Partnership and was a Non-Executive Director of Circle Holdings plc, St Ives plc and DTZ Holdings plc. Lorraine was a Board Member of the Olympic Delivery Authority and Chaired the Planning Committee.
Lorraine is an Honorary Member of the Royal Institution of Chartered Surveyors and a Past President of the British Property Federation. She was awarded an OBE in the Queen’s Jubilee Honours.”
Kerry has over 35 years’ experience in corporate business development and operations experience in the sustainable energy, financial, IT and telecommunications industries. He has significant innovative commercial and business development expertise in new and emerging sustainable energy and utilities infrastructure solutions, building technology, new media and blue-chip financial services and in emerging technology start-up companies where he has held Board and interim Chief Officer positions.
Kerry acts as principal advisor to a number of Inventa clients including Battersea Power Station, Henderson Global Investors, Quintain, London Boroughs of Islington and Southwark, the London Development Agency (LDA), Hammerson PLC, Laing O’Rourke, Taylor Wimpey, U & I Group, where he has provided strategic, commercial and financial advice on the establishment of sustainable, low carbon energy and utility infrastructure including water, waste and data (telecoms) strategies, securing investment capital and the procurement of strategic, long term delivery and operations partners.
He has significant business management expertise in blue chip global infrastructure networks, consultancy and corporate strategic planning and has extensive experience in defining, financing and establishing joint ventures in the property, financial and technology sectors.
His previous roles have included interim COO of a mobile wireless technology start-up; CTO of a Swiss private equity investment bank; Managing Director of the European arm of a USA consultancy and a Director level member of the Corporate Development Team at Barclays Bank Plc.
Howard is an Executive Director and a co-founder of Inventa Partners, helping form the company in 2001. As a qualified Chartered Surveyor Howard worked in both the private and public sectors and whilst working for Prudential moved to become the Head of internet Services for their Investment management business. Prior to setting up Inventa Howard took on the role of Commercialisation Director for the UK division of the Stanford Research Institute where he was responsible for the identification and delivery of new ventures.
Since 2001 Howard has worked extensively with Inventa’s clients across the property sector developing and delivering commercialisation strategies for a variety of energy related assets with the primary focus being district energy.
Identifying strategies to extract value from an asset outside of a conventional property portfolio has enabled Inventa to expand its repertoire to look at Solar PV, Heat Pumps, conventional utilities and latterly Electric Vehicle charging and battery storage.
Gideon is an Executive Director and a co-founder of Inventa Partners, helping form the company in 2001. Prior to the formation of Inventa Partners, Gideon’s earlier career spanned over 20 years’ experience in roles that have focused on marketing, business development and strategy consulting across many industries; from FMCG to telecommunications to R&D institutes, always working with board level clients in order to bring about significant commercial advantage.
Over the last 17 years, Gideon has been key in developing and delivering Inventa’s services for its Clients. Inventa’s property client’s value Inventa’s approach and understanding of how district energy will impact their property and land portfolios, especially in the ability to understand and monetise the boundaries between land, property and the energy sector, and to date Inventa has had in excess of 50 district energy projects.
More recently Gideon has been leading Inventa’s strategic service offering helping clients to understand and get to grips with the UK’s nascent EV charging opportunity. Gideon works with Property developers and owners to assist in identifying and evaluating the opportunity to participate in the commercial benefits of EV charging, exploring the EV service offerings, the respective business models and how it fits within the client’s overall energy strategy, whilst mindful of the evolving nature of this early market.
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