16/08/2021

Ground-Breaking Joint Venture Will Accelerate UK’s Journey To Net Zero

Gas distribution company SGN and UK renewable energy solutions provider Vital Energi are combining to form a unique and pioneering private sector initiative to develop, own and operate low and zero-carbon heat networks.

The 50:50 joint venture will create an Energy Services Company (ESCO), representing the UK’s leaders in utility infrastructure and heat networks to provide affordable and low-carbon infrastructure to SGN’s existing land portfolio. This includes delivery of heat to developments planned by SGN’s property arm, SGN Place, and the local vicinities where there is a demand for low-carbon heat.

It is estimated that the heat network market requires approximately £30 billion of investment by 2050 to meet the UK Government’s net zero targets, and the decarbonisation of heat has been highlighted as a particular challenge where heat networks can offer a solution. The Climate Change Committee’s Sixth Carbon Budget suggests the UK should target 20% of UK heat demand through low-carbon heat networks by 2050. 

Together, SGN and Vital have ambitious plans to establish solutions to this challenge across strategically located sites. These locations are a combination of redundant sites owned by SGN and others which will be developed over time through Vital’s existing market presence.

The objective is to supply new and existing residential, industrial and commercial facilities and development activity is already underway for two projects in Scotland and the South East, with another 20 in the pipeline.

SGN is looking to develop alternative heat solutions alongside its core gas distribution business and expand into the growing district heating market, recognising the future of heat is likely to include a mix of technological solutions and energy sources.

Vital Energi is seeking to expand into asset ownership opportunities to complement its core design, build and operations businesses.

The complementary skillsets of both organisations will offer a compelling proposition for developers, commercial and industrial users and public sector bodies seeking low-carbon heat solutions. 

SGN’s Director of Commercial Services and Investments Marcus Hunt said: “Heat networks are likely to play an increasing role in the delivery of UK heat in the context of net zero. The creation of this joint venture with market-leading Vital Energi enables us to build a presence in this emerging market, delivering new heat infrastructure and supporting decarbonisation.”

With an established presence in the UK heat network market, this partnership is a major step for Vital Energi to expand its asset ownership solution.

Nick Gosling, Chief Strategy Officer at Vital Energi, said: “We’re really excited to be extending our asset ownership portfolio and working alongside SGN on regeneration initiatives that will revolutionise the heat network market. Combining the resources, expertise and know-how of both organisations will allow us to play a major role in delivering the UK’s transition to low and zero-carbon heat.”

Heat networks

Heat networks are a distribution system of buried pre-insulated pipes that take heat from a central source and deliver it to buildings. Heat networks form an important part of the UK’s low carbon future, as their efficiency and carbon-saving potential increases as they grow and connect to each other.

Heat networks have been installed since the 1980s in large cities such as Nottingham, Sheffield and London, and with the UK Government’s push towards cleaner greener energy, along with the funding available, heat networks are expanding into cities and boroughs across the UK, connecting multiple buildings to reduce carbons emissions and improve air quality. The UK Government has a target of 18% of heat to come from heat networks by 2050.

SGN

SGN manages the network that distributes natural and green gas to 5.9 million homes and businesses across the south of England and Scotland. Our pipes deliver gas safely, reliably and efficiently to every one of our customers.

Since our rebrand in 2014, we are no longer known as Scotland Gas Networks, Southern Gas Networks or Scotia Gas Networks. Please refer to us as gas distribution company SGN.

Whatever time of day or night, anyone who smells gas should dial the National Gas Emergency Number – 0800 111 999*. Lines are open 24 hours a day, 365 days a year and calls are free.

Vital Energi

Vital Energi operates in the Energy sector providing a comprehensive service including design and installation, operating decentralised energy generation and multi-utility network distribution schemes based on low carbon / zero carbon technologies. The company also provides tailored energy management schemes to measure, monitor and manage energy consumption.

Vital Energi continues to produce energy efficient heat and power systems and consumption reduction solutions with long term cost benefits for clients in a broad range of markets including Healthcare, Education, Industrial, Commercial, Residential, and Local Authority. Vital Energi has also started to build its first Waste to Energy plant at a site in Drakelow, Derbyshire.

For more information, please contact Hayley Rothwell (PR & Communications Executive) at Hayley.Rothwell@vitalenergi.co.uk or on 0208 076 9272.

Visit Vital Energi on stand 1514.