HOTSW Woodheat Project
Background
The purpose of this briefing note is to update partners on the progress of the Heart of the South West (HotSW) Woodheat Project. AnExpression of Interest was prepared in response to a ‘call’ for bids published by the Heart of the South West Local Enterprise Partnership under the European Regional Development Fund (ERDF).The call sought projects that would help the “shift towards a low carbon economy in all sectors”. Details of the call can be found here.
The EOI was submitted in February and was successful; feedback was received from DCLG in April. A full application is now being prepared by Devon County Council, supported by the Forestry Commission and other partners.
Feedback on the EOI indicated that much of the proposed activity was more suitable for a call under European Agricultural & Rural Development Fund, so the bid has been adjusted to reduce the focus on the primary forestry and processing sector and focus on increasing demand by stimulating the uptake of district heat networks fuelled by biomass.
Summary of project bid
The new bid is for a project with a total value of £2.9m, of which £1.6m is sought from ERDF. The project would run from January 2017 to December 2019. It would be hosted by Devon County Council, with Forestry Commission, Exmoor National Park, North Devon Biosphere, Plymouth City Council and the National Trust as delivery partners. The project area would cover the whole of Devon and Somerset.
The project management function will be outsourced via a full OJEU procurement exercise. Delivery will be managed through a Project Board reflecting the key delivery partners.
The intention of Woodheat is to increase uptake of biomass district heat networks in an area rich in underutilised woodland and hedgerow resource. It will encourage and support feasibility work and installation of heat networks, leading to a reduction in greenhouse gases, an increase in sustainably managed hedgerows and woodland, and additional employment throughout the supply chain.
The project is developed around four themes:
- Better analysis of existing and potential biomass district-heating demand and local fuel supply opportunities.
An initial strategic assessment will be undertaken. ‘Ground-truthing’ of specific communities or businesses with a high heat load will determine the most appropriate heat technology for these heat consumers.
- Better and more co-ordinated approach to awareness raising and knowledge transfer and dissemination
Lack of knowledge and awareness has been identified by industry experts as the principal barrier to woodfuel district heating deployment. Targeted events will bring potential heat consumers, fuel suppliers, heating engineers and plumbers, architects, property developers and urban planners into the project’s support structure. The project will also monitor and appraise existing installations to identify how well they are performing, document common pitfalls and showcase best practice.
- Provide technical support
The lack of awareness of the technology means that technical support is necessary at each stage of implementing a woodfuel district heating scheme.
Woodheat will provide 70% grants, or assist with external grant applications, at various stages of a project cycle for outline feasibility (up to £5k), detailed feasibility (up to £20k) and, for community-owned schemes, project management costs (up to £20k).
- Capital grants to address investment gap
Industry experts have identified that the investment cost is often not equalled or exceeded by the 20 year operating profit, even with the Renewable Heat Incentive. This is referred to as the investment gap. To address this investment gap, capital grants will be offered for up to 100% of the investment gap which must not exceed 50% of non RHI-eligible capital costs, eg pipework, heat interface units, pumps and groundworks.
What happens next?
The full application was submitted to DCLG on 8 July with a decision expected by September. If successful, it is likely to start in January 2017, with the expectation that project management contractor would be in place by April 2017.
We would welcome partners being involved in the events and communications encouraging more awareness of the opportunities presented by biomass district heat networks.
We anticipate working with partners to prepare a complementary bid in response a future call under EAFRD, which will provide support to primary forestry and processing businesses, in order to support the whole supply chain.