The Department for Business, Energy and Industrial Strategy (BEIS) is seeking to establish a Dynamic Purchasing System (“DPS”) for heat networks – BEIS Heat Investment Vehicle (BHIVE). BHIVE will allow public sector heat network owners/developers in England and Wales to procure funding and funding-related services for their heat network projects from a range of potential funders.

UK heat networks represent one of the biggest growth potentials for energy networks in Europe, with investment potential between £13 billion to £22 billion by 2050. The Heat Network Investment Project (HNIP) is a £320m project that will secure an increased number of heat networks in England and Wales and stimulate increased external investment to create a self-sustaining heat network market.

BHIVE will play a key part in creating a market that is economically attractive to investors, delivers and sustains jobs, exports and economic benefits and continues to promote the UK as one of the top global investment destinations.

A DPS is a public sector sourcing tool for common goods and services under regulation 34 (Dynamic Purchasing Systems) of the PCR 2015. Funding Providers can apply to join the DPS at any point and do not require any special IT equipment as a DPS eliminates unnecessary up-front activity for the bidder.

Who can use BHIVE?

BHIVE will be available to all Public Sector Bodies in England and Wales (“Contracting Authorities”). This includes:

  • Central Government Departments, Arm’s Length Bodies and Executive Agencies
  • Non Departmental Public Bodies
  • Devolved administrations
  • Local Authorities
  • NHS bodies
  • Charities
  • Universities, colleges, schools, further education providers

BHIVE is open to Contracting Authorities wanting to raise funding for their heat network projects to:

  • Finance a new heat network
  • Finance the expansion of an existing heat network, or
  • Facilitate the sale of part, or all, of an investment in a mature heat network – for example, where a Contracting Authority wishes to sell its stake in an operational heat network. This could also be part of a wider refinancing of the project.

BHIVE is not limited to projects receiving funding from HNIP or from the Heat Network Delivery Unit (HNDU) – it is also open to customers who do not expect to receive any funding from either of these government schemes.

What funding is available within BHIVE?

The funding categories available under BHIVE are divided in to two Lots, as follows:

  • Lot 1: Equity Finance
  • Lot 2: Asset Finance

In addition to the provision of the funding itself, Contracting Authorities may also ask Funding Providers to provide a range of services which are ancillary to the funding under Lot 1. Examples of these services are set out in the guidance documents.

What are the benefits of BHIVE?

BHIVE will provide an effective way for Funding Providers to access heat network funding opportunities and has the potential to deliver a number of significant benefits to the market:

Accessibility: By providing a central market place of Funding Providers, all of whom have expressed an interest in funding heat networks and demonstrated that they have access to funds and the associated services to execute fund raising, BHIVE will provide an efficient route for Contracting Authorities to access funding and funding-related services for their heat network projects.

Standardisation: Over time, and in conjunction with the Standardised Due Diligence Set (SDDS) and the Sales, Operations and Maintenance Set (SOMS) developed by TP Heat Networks, BHIVE will help to reduce the timescales and costs of funder due diligence and approvals and make for a more efficient fund raising process.

Flexibility: BHIVE will be diverse enough to provide a wide range of skills and experience alongside the funding, and potentially facilitate the creation of a secondary investment market.

Value for Money: Through competitions for individual projects, BHIVE will provide the means for Contracting Authorities to access the most economically advantageous terms for their project, with the optimum capital structure and lowest cost of capital.

In addition, the use of a DPS will provide benefits to both Funding Providers and Contracting Authorities:

  • A simpler, quicker process for Funding Providers to get on to the DPS.
  • A faster process for Contracting Authorities to access Funding Providers.
  • Use of an automated, electronic process, to streamline procurement.
  • A more flexible way for Funding Providers to join and update responses at any point.

How to use BHIVE

If you are a Funding Provider please click the ‘investor & asset finance’ box below to access the DPS.

If you would like to use BHIVE to run a mini-competition / access Funding Providers, please click on the customer box to contact us for more information on how to use BHIVE to support your scheme.

Guidance, Policies and Agreements

Below are the BHIVE guidance materials and supporting documents.

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