Questions raised over council-funded district heating network as fresh loan sought

Enfield Council has so far loaned a total of £35m to Energetik, which distributes unused heat from Edmonton incinerator to people’s homes, reports Simon Allin, Local Democracy Reporter

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

Residents have raised concerns over the long-term sustainability of Enfield Council’s district heat network as the civic centre looks set to approve another £12million loan for the scheme.

The 23km (14-mile) network of pipes being installed by council-owned company Energetik is designed to transport excess heat from the incinerator at Edmonton Eco Park to thousands of homes across the borough.

However, the scheme requires significant up-front investment, and a council report published on 18th October recommended issuing a further loan of £11.86m to fund installation work for the eastern part of the network, between Meridian Water and Ponders End. The civic centre is set to pay £20,000 interest over the lifetime of the loan, which matures in 2048.

The loan will help fund the ongoing roadworks which are enabling Energetik to lay heat pipes under Hertford Road, through Edmonton and Ponders End, which began this summer.

The report also reveals the council has so far lent Energetik £35m to help achieve its aims of delivering low-cost, low-carbon energy to residents. But with the civic centre facing mounting financial pressure, residents warned over the long-term financial risks of the scheme – and whether bills would rise in the long run.

Anna Eager, head of stakeholder engagement at Energetik, told a meeting of the Enfield Over 50s Forum on Tuesday (31st October) that the network was designed to reduce fuel poverty as well as slash carbon emissions.

She said leaseholders connected to the network currently pay around two-thirds of what they would pay for gas heating, while tenants pay even less.

“Customers are getting a much better deal than they would be in the rest of the market,” Anna added.

Since Energetik was set up in 2015, the council has faced ongoing cuts to its budget. Now under increasing pressure from inflation and facing a £39m budget gap next year, it is poised to make further spending cuts over the coming months.

After the scale of the problem led the opposition Conservative group to warn the council could soon face bankruptcy, the Labour administration said it was “confident” it could balance its budget.

But during Tuesday’s meeting, residents raised concerns about the long-term future of the Energetik project. One resident asked about the impact of dwindling council finances on customers’ bills and pointed out that some local authorities are selling off key assets, increasing costs to residents.

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Anna acknowledged that some customers connected to other heat networks paid “significantly more” than they would with a gas supply but said that the council was committed to achieving its aims, pointing out that Energetik did not require the same rate of return as private firms.

Matt Burn, a member of Enfield Climate Action Forum as well as campaign group Better Homes Enfield, said he understood the total exposure to the council would be more than £90m “including all the grants it has to cover” if the Energetik scheme were to fail, but asked for a definitive figure.

Matt added that business case studies had factored in the potential of selling Energetik to “corporate partners” and asked how that would protect consumers.

Anna said the questions on the finances and the possibility of selling the company were really for the council itself to answer. She added the authority had been “very thoughtful” about protecting its resources and creating something that would potentially “pay into the coffers in future years”, although she acknowledged the “awful pressures” now being faced.

The council report states that Energetik’s financial model was last reviewed in June 2021 but that, since then, “there have been significant global challenges which has resulted in a combination of increases to energy prices, construction costs, interest rates, as well as some significant change and delays to forecast development build out, all of which cumulatively has had a significant impact on the financial business model”.

It adds that “the council is currently reviewing Energetik’s updated business plan, which will be reported to cabinet later in the year”.

There were also questions at this week’s meeting over the environmental impact of the scheme and whether alternatives would be better at reducing emissions.

Energetik claims that homes connected to the heat network will produce more than 90% fewer carbon dioxide emissions than if they had traditional gas boiler heating systems.

Under questioning, Anna said her understanding was that the emissions figures for the heat network factored in emissions produced by the incinerator.

Matt Burn said a whole-life carbon assessment of a section of a Cockfosters heat network indicated that using heat pumps would be better than connecting to the Energetik system.

In response, Anna said that heat pumps and other technology should be investigated but claimed their longevity was unknown, the noise they create had sparked disputes among neighbours, and there were “issues” about the gases they contain.

Although the Enfield scheme connects to the Edmonton incinerator – which has sparked protests amid fears over its impact on local people’s health and the environment – Anna pointed out that it could switch to a new source of energy, such as nuclear fusion, once it becomes available.

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