New partnership unlocks £1bn of heat networks to decarbonise homes and cities
- Landmark deal between Pinnacle Power and DIF Capital Partners enables critical investment for the UK’s energy infrastructure.
- The partnership brings pace and scale to the delivery of a low-carbon heating offer for homes in towns and cities across the UK.
- The partnership represents one of the largest investments in heat infrastructure in the UK and will provide a much-needed stimulus to a burgeoning sector, with £1bn worth of heat networks set to be built. These projects will play a crucial role in decarbonising the UK’s heating.
The UK’s energy security is a top priority, and, as recognised in the Government’s ‘Powering up Britain: Energy Security Plan’, heat networks will play a crucial role in achieving this. To turbocharge the UK’s heat network capability a new partnership between Pinnacle Power and DIF Capital Partners will deploy town-and-city-scale heat networks to decarbonise tens of thousands of homes and buildings across the country. The agreement comes following a ten-year investment by Pinnacle Group that has seen Pinnacle Power grow to be one of the leading heat network providers in the UK.
Currently, heat-related activity is the biggest contributor to greenhouse gas emissions, accounting for 37% of total emissions in the UK. When these networks are built out, this investment will save up to 200,000 tonnes of CO2 a year, by cutting out the need for homes and buildings to have their own gas boilers. Furthermore, they will remove tens of thousands of boiler flues that would otherwise contribute significantly to air pollution.
Heat networks take waste heat from local industrial and commercial buildings and send it into the local community as usable and cleaner heat to keep people’s homes warm. In the right location, heat networks have the cheapest lifetime cost of all available energy options to decarbonise heat.
Heat networks are already commonplace in Northern Europe, where typical country penetration ranges from 20-70%, and in 2050, the same is expected in the UK. This dynamic infrastructure will significantly reduce the wider energy system costs of decarbonisation.
Toby Heysham, CEO of Pinnacle Power, said:
“As recognised in the Government’s Energy Security Plan, heat networks will play a critical role in delivering affordable, low-carbon heating, and help hit the UK Government’s legally binding carbon targets.
We are excited to be working with DIF to deploy the scale of investment this market needs. We know that the industry needs to deploy at least £60-80bn into low-carbon heat networks to unlock the vast amount of local, wasted heat and deliver that heat into homes and businesses. Many towns and cities have declared climate emergencies but very few have credible solutions to the ‘heat challenge’. This investment offers a clear pathway to achieving decarbonisation, through local investment in locally generated, low-carbon heat.”
Gijs Voskuyl, Partner and Head of Infrastructure at DIF Capital Partners, said:
“We share Pinnacle Power’s view that district heating networks will play a pivotal role in the energy transition story of the UK. We are impressed with what the Pinnacle Power management team has achieved to date and firmly believe in their ability to grow the business, backed by strong regulatory tailwinds. Pinnacle Power represents a compelling investment proposition for DIF, with an opportunity to invest in a build-to-core sustainable energy platform operating in a rapidly growing market.”
Peregrine Lloyd, Group CEO of Pinnacle Group, said:
“This agreement is the culmination of a ten-year journey since founding Pinnacle Power. I am incredibly proud of the work our management team has done to grow and nurture Pinnacle Power to see it become one of the country’s leading heat network platforms. The time is now right to hand over the reins to DIF, who will take Pinnacle Power to the next level and enable the scale of investment needed in the energy market. I look forward to following this exciting next phase in Pinnacle Power’s development.”
Pinnacle Power has delivered over 100 projects, ranging from installing city scale networks, through to operating large scale low carbon power plants and running its own heat utility.
The transaction will see DIF owning a significant majority in Pinnacle Power, with the management team retaining a minority stake. This is following an agreement with Pinnacle Power’s previous shareholder – Pinnacle Group.
DIF was advised by AFRY, Deloitte, Evolution Infrastructure and Travers Smith LLP. Pinnacle Group and Pinnacle Power were advised by Eversheds Sutherland and Opus Corporate Finance.
About Pinnacle Power
Pinnacle Power is a heat network provider in the UK. We build, own and operate services for a large number of heat networks around the country. Pinnacle Power was started in 2012 by Pinnacle Group and management. Since then, it has grown to be one of the leading heat network providers in the country. Pinnacle Power is currently designing and building a number of schemes for local authorities across the UK, as well as operating networks and running a heat utility. Pinnacle Power has offices in London, Carlisle, Sheffield and Copenhagen.
For more information, please visit www.pinnaclepower.co.uk
About DIF Capital Partners
DIF Capital Partners is an independent infrastructure fund manager, with more than EUR 15 billion of AUM. DIF was founded in 2005 and has built a leading position in managing mid-market investments, primarily in Europe, North America and Australia.
DIF follows two strategies: its traditional DIF funds invest in lower risk mid-sized infrastructure projects and companies in the energy transition (incl. renewables) and utilities sector, as well as PPPs and concessions. The firm’s CIF funds invest in small to mid-sized companies that will thrive in the new economy. These companies are typically active in the digital, energy transition and sustainable transportation sector.
With a team of over 210 professionals in 11 offices, DIF Capital Partners offers a unique market approach combining global presence with the benefits of strong local networks and investment capabilities. DIF is located in Amsterdam (Schiphol), Frankfurt, Helsinki, London, Luxembourg, Madrid, New York, Paris, Santiago, Sydney and Toronto.
For more information, please visit www.dif.eu
About Pinnacle Group Limited
Pinnacle Group is a community-facing, people-first business that delivers, manages, and maintains communities and places where people live, work, learn and play including a portfolio of 75,000+ mixed tenure homes and, 200+ schools as well as open spaces, public and private buildings, retail, distribution centres and manufacturing.
Formed in 1994, Pinnacle is a trusted service provider to both public and private sectors; employing 3,700+ people and operates across the UK from over 200 delivery locations.
For more information, please visit www.pinnaclegroup.co.uk
Pinnacle Power: email@example.com
DIF: Diederik Heinink, firstname.lastname@example.org
Pinnacle Group: Aisling Jamieson-Ewers, +44 (0)75 5281 0514 / Mia Dexter, M: +44 (0)73 1137 0065 PinnaclePress@headlandconsultancy.com