Venture-capital boutique Scottish Equity Partners is investing up to £9 million from its Environmental Capital Fund into Ardor Energy to establish a new heat-project focused platform.
This will fund a pipeline of diversified small–scale heat and combined heat and power developments across the UK over the next three years.
SEP has raised £135 million for its Environmental Capital Fund from its launch in September 2014.
Backed by Perth-based utility giant SSE, as well as a syndicate of financial investors led by Lexington Partners, this fund is aimed at small-scale, UK based, clean energy infrastructure projects – including energy efficiency, biomass, small-wind, CHP and district heating schemes.
Ardor will work with partner Sustinere Solutions to procure install and maintain biomass and gas boilers and CHP projects across a wide range of properties including multi-occupancy housing, care facilities, leisure centres and hotels under long-term energy supply agreements.
The first Ardor heat project is at the former St Clements Hospital site in Bow, east London, where all 250 homes will purchase heat from a central energy centre and district heat network.
The project will provide heat directly to homeowners, who include social and affordable housing customers, via a long-term heat supply agreement and will use a dual-fuel biomass pellet and gas boiler system provided and maintained by Ardor Energy.
Ardor will generate income from heat sales as well as through the Renewable Heat Incentive (RHI), the Government’s environmental programme that provides financial incentives to increase the uptake of renewable heat.
The Sustinere team has sector-experience having successfully delivered a number of biomass and other renewable projects from design and finance through to delivery and aftercare.
Peter Bachmann, SEP Director, said: ‘If the UK is to meet its requirements under the EU Renewables Energy Directive, DECC predicts that the country will need to increase significantly its renewable heat usage from 2% to 12%.
“There is a significant market opportunity in helping transition the UK to low carbon heating solutions. SEP’s investment in Ardor will facilitate the roll out of a number of low-carbon heat-driven projects across the country.’
‘Overcoming the complexities inherent in a multi-occupancy development such as St Clements, through the Ardor structure, demonstrates the added value SEP can bring to projects in the heat sector. We believe this project will act as an attractive template for heat and energy provision as a service for multi-tenant housing developments across the UK.’
Wood Energy has been selected by Sustinere for Ardor as its installation and long-term operations and maintenance partner, with the project due to commence heat supply in February 2016.
Further renewable energy developments with care groups and housing associations are being progressed and will be announced shortly.
Steve Wilkinson, Managing Director of Sustinere, commented: ‘Interest in biomass and gas fired CHP systems is increasing and we have an exciting pipeline of potential projects which Ardor, with financial backing from SEP, can help deliver’”.