Council-owned district heat network's revenues hit by slow rate of housebuilding

Energetik’s “liquidity position” is being closely monitored as the council continues to search for a private buyer, reports Joe Ives, Local Democracy Reporter

Energetik’s heat network pipes ready for installation across Enfield (credit Energetik)

The “continued weakness” of London’s housing market is creating further financial problems for Enfield Council’s troubled district heating network, according to Enfield Council.

A report presented to the local authority’s cabinet at its meeting last Wednesday (14th) explained that slow rates of housebuilding meant there were fewer new homes for Energetik to connect to, limiting its income.

Using underground pipes, Energetik transfers heat from a variety of sources to warm people’s homes. Some recently-built estates in Enfield are now plugged into the network, although it remains under construction.

The council-owned company is forecast to generate £1.6m of profit before interest in 2026/27, but just £0.1m after repayment costs are deducted – thanks to Energetik having loaned a total of £57.4m from the civic centre.

At Energetik’s inception, under the previous Labour administration, connection fees from new homes being added to the network were expected to help keep the business in sound financial health as it developed.

The problem, as detailed in the latest report, is that the rate of these connections continues to lag well behind that what was originally hoped, reinforcing the company’s “capital pressures and increased reliance on loan facilities”.

At the same time, “delays to major development compared to 2015 assumptions” have resulted in a significant amount of the heat network infrastructure’s being delivered “ahead of revenues”. It has resulted in a need to closely “monitor Energetik’s liquidity position”.

The last Energetik business plan, approved by the council’s cabinet in June 2025, was due to last three years. However, the council report explained that due ongoing financial issues, a new managing director being appointed and the decision by the minority Conservative administration to effectively privatise the company, the latest operating plan is focused solely on the 2026/27 period.

A report last October confirmed the total cost of delivering Energetik was set to eventually reach £114million, via a combination of council loans and external grants. It also warned that, excluding one-off connection fees, the business would not make a surplus until 2038.

In response to these financial challenges, shortly after taking control of the council following May’s local elections the Tories agreed “in principle” to sell off the district heating network to a private partner.

The decision to flog the costly Energetik project was made at its first cabinet meeting in June. There, cabinet members agreed to sell the company while retaining a stake through a ‘golden share’ arrangement.

This new private operator is still being sought.

The latest council report said that in 2025/26 Energetik did achieve a number of important milestones, including adding “a further 2.4 km of completed pipeline to the network”.

The network also connected to an additional 392 homes, bringing its total to 1,874 with “a further 2,838 homes committed through signed connection agreements”.

The construction of a new energy centre in Edmonton was also completed. It will eventually be capable of serving around 200,000 homes and is expected to start running from the second quarter of 2027.

The facility will eventually draw heat from the new incinerator currently being built at Edmonton Eco Park, but which is not expected to “come online” until 2031/32.

North Middlesex University Hospital, which has been “a key anchor load planned for Energetik from inception” has yet to be secured to the network, however.

Perhaps with one eye on the local authority’s ongoing efforts to sell the company, council leader Alessandro Georgiou described Energetik as “the gold standard of district heat networks”.

He also told his cabinet: “It’s been the best company in the world – for the past five months.”

Local news needs your support

We are proud that we were at the forefront of reporting on the recent local elections. We can’t do this without the support of our readers.

Independent news outlets like ours – reporting for the community without rich backers – are under threat of closure, turning British towns into news deserts.

If our coverage has helped you understand our community a little bit better, please consider supporting us with a monthly, yearly or one-off donation.

ACT NOW!

Monthly direct debit

Annual direct debit

£5 per month supporters get a digital copy of each month’s paper before anyone else, £10 per month supporters get a digital copy of each month’s paper before anyone else and a print copy posted to them each month. £50 annual supporters get a digital copy of each month's paper before anyone else.