Heating

District heating networks and Energy Supply Company (ESCo) structures are increasingly important tools for delivering low-carbon heat at scale, particularly in urban areas, mixed-use developments, and public sector estates.

These models allow a single infrastructure owner or operator to supply heat (and sometimes electricity and cooling) to multiple connected buildings under long-term supply agreements, offering a lower-carbon alternative to individual gas boilers.

QMPF has worked on heat and energy infrastructure projects across the UK, advising public sector bodies, local authorities, developers, and ESCo operators. Our experience spans the full project lifecycle, from early-stage options appraisal and outline business case development through to detailed financial modelling, procurement support and transaction advice for M&A and fundraising processes.

District Heating Networks

District heat projects require careful consideration of a number of interconnected commercial and financial challenges: the heat load and connection pipeline must be robustly evidenced; heat pricing must be set at a level that is competitive for consumers while generating sufficient revenue to service project costs; and the capital structure must reflect the long-term, infrastructure nature of the asset. We have produced detailed financial models and business cases for heat network projects on behalf of local authorities and developers, including supporting grant funding applications through the UK Government’s Green Heat Network Fund and the Scottish Government’s Scottish Heat Network Fund. Our team has advised on buy and sell side processes, provided financial advisory bid support for public procurement processes seeking development partners and advised institutions (including Universities, Local Authorities and NHS Trusts) on opportunities to connect to district heat networks.

ESCo and Energy Supply Structures

ESCo models where energy services are supplied to connected customers under long-term contracts, are increasingly used in mixed-use developments, university campuses, housing schemes, and public sector estates. Developing these structure structures requires consideration of a range of commercial, legal, and financial aspects. These include: the terms of energy supply agreements; connection charges; maintenance obligations; governance arrangements; and the interaction between any public grant funding and private investment. QMPF can advise on the appropriate structure and financing for ESCo projects, drawing on our experience across the public and private sectors.

Heat Pumps and Emerging Technologies

Large-scale heat pump installations, drawing on air, ground, water, or waste heat sources, are increasingly viable as an anchor heat source for heat networks, particularly where combined with thermal storage and smart controls. We can advise on the financial and commercial assessment of heat pump projects and their integration into district heat and ESCo structures.

How We Can Help

QMPF can assist across the full range of heat and energy infrastructure projects:

• Options appraisal and business case development, including outline and full business cases for public sector clients;
• Detailed bankable financial modelling with full capital structure capabilities, including heat load, connection, tariff, and revenue sensitivity analysis;
• Project structuring advice, including ESCo structures and public/private partnership models;
• Procurement support, providing financial advice to public sector bodies seeking private sector investment, or advising private sector on responding to procurement opportunities (financial model, funding and commercial advice);
• Fundraising and financing advisory for district heat and ESCo projects;
• Ongoing financial advisory support for operational networks; and
• Buy-side and sell-side M&A advisory on development and operational assets.