Today, as part of the BEIS funded Heat Networks Investment Project (HNIP) programme, the HNIP consortium has released the suite of template heat network contracts, drafted by Lux Nova.
The work was commissioned by BEIS and these templates have been developed based on feedback received following two rounds of consultation. We are confident that they will be of significant value, and that they will offer a useful starting point to contract creation and negotiation.
The suite of contracts includes templates for Concession Agreements, Plot Connection Agreements, Framework Supply Agreements, Customer Supply Agreements, Energy Centre Leases, DBOM frameworks and Operation and Maintenance Contracts.
To access the Heat Contract Templates known as the “Sales, Operations and Maintenance Set (SOMS)”, please click here.
For information on possible future revision of the documents, please contact: consult@luxnovapartners.com
Background
The Government is committed to investing £320 million in heat networks through the Heat Networks Investment Project (HNIP) as part of its plans to deliver low carbon heating and cooling. Following the recent announcement that £40 million of this funding has been awarded to applicants both in the private and public sector, the benefits of that low carbon heat are expected to be felt as the heat networks are developed. Importantly, the scheme is still open for applications and the HNIP team anticipates further funding announcements as the scheme continues, and as the heat network market gains momentum.
With just 2% of buildings in the UK currently benefiting from heat networks, the expectation is that this will rise significantly as we step closer towards the UK’s zero emissions target by 2050. By then, it is predicted that heat networks will supply 17-24% of heating in the UK.
As the market develops, it becomes increasingly important to raise standards and reduce the costs associated with developing or funding district heating schemes. The templates are aimed at reducing transaction costs and facilitating standardisation across the market.
