Heat Network Opportunity at Granton Waterfront, Edinburgh

The City of Edinburgh Council (the Council) is seeking to procure the delivery of a low carbon heat network to serve the Granton Waterfront development and existing buildings in the surrounding area under a concession model. The Council wishes to identify a concessionaire with the most economically advantageous tender to design, build, finance, operate and maintain the low carbon heat network using a two-stage process. The Granton Waterfront development is anticipated to deliver around 3,500 homes (over 1,000 of them affordable), a primary school, a medical centre and over 9,000m2 of commercial space. Around 800 homes and 3,000m2 of commercial space are expected to be delivered as part of the first phase of the development. As part of the development and to work towards meeting the target of Edinburgh achieving net zero carbon by 2030, the council wishes to progress the delivery of a heat network that will supply cost-competitive low carbon heat to new and existing households and non-domestic properties throughout Granton Waterfront and the surrounding areas, where deemed viable. The current preferred solution identified for the low carbon heat network, following feasibility work and outline business case work is to source heat for the network from a wastewater source heat pump utilising heat from sewers. The network would utilise a sewage heat recovery system, with a ground-mounted solar PV array helping meet the system’s electricity requirements. The heat would be distributed via a network of approximately 7km (depending on network routing and phasing of connections). The indicative network identified as the preferred option in the outline business case is the maximum potential scheme serving the core Granton Waterfront development plus additional customers to the south, west and east. This preferred option represents an annual heat demand of c.25,055 MWh. The successful bidder will initially be appointed to work with the Council over a c.8 month period under a Pre-Development contract culminating in a final business case for the project. This approach has been devised as part of the Council’s procurement strategy to reduce the burden of tendering as much as possible on tenderers and to encourage collaboration, innovation, risk apportionment, and partnership between the Council and the concessionaire. Subject to final business case approval, the Council intends to enter into a concession agreement with the successful tenderer to design, build, finance, operate, maintain and supply heat from the heat network. The concession duration is subject to negotiation but is anticipated to be around 40 years. The concession agreement will require heat to be supplied to properties in the Granton Waterfront development with the first properties currently anticipated to be ready for occupation in September 2025. The concessionaire may also be required to incorporate a special purpose vehicle to deliver the heat network in which the Council is allotted a ‘golden share’ with voting rights attached. This procurement includes the opportunity to supply heat from the low carbon heat network to: the Council; the other bodies identified in this contract notice; and any Registered Social Landlords with properties in the Granton Waterfront development or surrounding area. Further details are outlined within the procurement documents.