Heat Network Opportunity at Granton Waterfront, Edinburgh

Concepts

• edinburgh
• granton waterfront
• energy related
• heat network opportunity
• city of edinburgh council
• delivery of a low carbon heat network
• district heating
• low carbon heat network
• granton waterfront development
• delivery of a heat network

Location

Description

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 successful tenderer will initially be appointed to work with the Council over a c.8 month period under a Pre-Development contract before a final business case for the project is made. 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. 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.

Total Quantity or Scope

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.

Renewal Options

The Council anticipates that it will be possible to expand the network to connect more customers in the Granton Waterfront and surrounding areas. Expansion will be the responsibility of the concessionaire. It should be noted that the procurement process is being undertaken specifically for a heat network provider for the Granton Waterfront Development and surrounding areas, however, the Council reserves the right to extend the Agreement to other areas of the City at its sole discretion. This may include pre-development services or expansion of the network and will be discussed with the successful Tenderer only on completion of the pre-development services.

Award Criteria

CPV Codes

• 71314000 - Energy and related services
• 09323000 - District heating
• 45232140 - District-heating mains construction work
• 45232141 - Heating works
• 45251250 - District-heating plant construction work
• 71321200 - Heating-system design services
• 71314310 - Heating engineering services for buildings

Indicators

• This is a one-off contract (no recurrence)
• Options are available.
• Renewals are not available.
• Professional qualifications are sought.
• Staff qualifications are relevant.

Other Information

** PREVIEW NOTICE, please check Find a Tender for full details. ** The contract value specified in this contract notice is the Council’s best assessment of the total revenues based on today’s prices from the initial heat network over a 40 year concession period. This value will increase if the heat network is extended by the concessionaire as envisaged in the concession agreement. The Council will undertake the financial evaluation on the Candidate and any key sub-contractor based on the value of the works/services which they are responsible for delivering. Candidates are also asked to confirm that they will pay staff that are involved in the delivery of services under the contract, at least the real Living Wage. Candidates who do not pass these questions will not be subject to Commercial Analysis. As a result the tender will not be considered further. Candidates must complete the SPD (Scotland) to demonstrate adherence to the Exclusion and Selection Criteria for this procurement. It is a mandatory requirement of this Contract that a prompt payment clause is present in all supply chain Contracts used in the delivery of the requirements. This ensures payment of sub-contractors at all stages of the supply chain within 30 days and includes an obligation to provide a point of contact for sub-contractors to refer to in the case of payment difficulties. This will require active monitoring of payment performance as well as the provision of evidence and reports to the Council as contractually scheduled. NOTE: To register your interest in this notice and obtain any additional information please visit the Public Contracts Scotland Web Site at https://www.publiccontractsscotland.gov.uk/Search/Search_Switch.aspx?ID=732198. The buyer has indicated that it will accept electronic responses to this notice via the Postbox facility. A user guide is available at https://www.publiccontractsscotland.gov.uk/sitehelp/help_guides.aspx. Suppliers are advised to allow adequate time for uploading documents and to dispatch the electronic response well in advance of the closing time to avoid any last minute problems. A sub-contract clause has been included in this contract. For more information see: http://www.publiccontractsscotland.gov.uk/info/InfoCentre.aspx?ID=2363 Community benefits are included in this requirement. For more information see: https://www.gov.scot/policies/public-sector-procurement/community-benefits-in-pr... A summary of the expected community benefits has been provided as follows: Community benefits are included in this requirement. For more information see: https://www.gov.scot/policies/public-sector-procurement/community-benefits-in-pr... A summary of the expected community benefits will be identified within the invitation to tender documentation. (SC Ref:732198)