Deciding what’s important and prioritising
Identifying the aims of progressing greenspace heat projects for your organisation.
Strategic influences
Before starting investigations into potential projects, it is useful to reflect on the strategic influences which might drive decisions to pursue greenspace heat projects. The presence and relative importance of these drivers will have an influence on the shortlisting of opportunities and onwards towards the construction of a business case. The strategic influences might change over time, so a review before and after key decision points may be useful.
Decarbonisation and sustainability are almost certainly important drivers – in some cases the whole endeavour will be framed in this way. However, there are also economic and social (i.e. protecting greenspace) drivers that may compliment or compete with each other.
Table 1 maps a number of potential strategic drivers in categories adapted from traditional PEST analysis: Political, Economic, Social, Environmental. Some drivers have relationships with more than one category.
Table 1 - Example PES(TL)E analysis for greenspace heat projects.
Practical influences
In addition to strategic influences there are a range of practical considerations which will influence the approaches that are possible or desirable.
Ease/speed of implementation (e.g. choosing an ‘easy’ project as a pilot/learning experience). Aspects that make a project easier or more difficult will include the site, scale and the stakeholders involved, as well as the current heating scenario.
Internal capacity. If one or all of time, resources and expertise are limited then it may be desirable to seek a small number of high impact projects, whilst leaning on external experts.
Risk management and investment. By combining or aggregating similar projects under one ‘large scale’ project portfolio approach, the investment threshold for many larger investors can be attained more readily, with the added benefit of potentially re-profiling or spreading risks (through diversity of the portfolio) to make investment more attractive and reducing transactional and administration costs.
Prioritising project drivers
Once you have identified the strategic influences, it is necessary to determine the relative priority placed on these, as this will influence the sequence in which opportunities may be built out (e.g. an organisation which prioritises operational cost savings over revenue generation may focus on opportunities within its own ownership before looking at high heat demands for other owners). Some considerations against the drivers identified earlier are considered in Table 2, which is arranged thematically, rather than in order. Different circumstances will determine different priorities.
| Driver | Notes |
|---|---|
| Financial Drivers | |
| Revenue Generation | Opportunity identification will focus on users with consistent low-grade heat demand. Low-grade heat in this context refers to heat used for ambient space or water heating. Financial returns will be maximised by retaining as much project control as possible (but with an increased risk profile). |
| Operational Cost Savings | Opportunity identification will focus on users with high energy costs and higher heat loads, focused within the organisation’s own estate. |
| Environmental | |
| Reduce Carbon Emissions | Existing fuel source will influence savings here, with the relative carbon emissions of different fuels defined by UK Government. |
| Improve Air Quality | Existing fuel source will be relevant, as will the relative location of the asset (i.e. a building in the centre of a park may be less sensitive than one located by a busy road). |
| Safeguard Green (or Blue) Space | A location that is under development pressure may be more ‘valuable’ if it can generate revenue (such as a school playing field), but any form of development (even low-carbon infrastructure) will need to be handled sensitively to win hearts and minds. |
| Social | |
| Generate Community Benefit | Is there a pre-existing community organisation that can be the focal point for engagement and is willing to take on an administrative role? |
| Safeguard Community Assets | Similar to safeguarding space, but distinct as the objective may be to ensure the ongoing viability of the asset. |
| Reduce Fuel Poverty | The relative priority of this will influence the selection of projects, the delivery structure and the operational margins applied. |
| Level of Stakeholder Involvement | The level of stakeholder involvement will influence the development process and the delivery structure. |
| Administration / Control | |
| In-House Capacity, Capability and Willingness | Although the capacity and capability may be missing at the outset, willingness will determine if these are resources and skills that the organisation is prepared to develop in-house. |
| Resourcing | Will the project be resourced in-house or outsourced? Who will be responsible for procuring and managing the services? Different objectives may apply at the capital and operational stages. |
| Operational Flexibility | The ability to adapt projects. |
| Exit Options | The ability to exit will depend on the delivery structure and the operational contractual arrangements. |
Footnotes:
Local authorities don’t have a statutory duty to reduce emissions, but many have resolved to take action to decarbonise their activities and their local areas in response to the climate emergency.