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Urban Design Compendium

Case Study 075 - Managing a community heating system

075 - Southampton District Energy Scheme, Southampton

The Southampton District Energy Scheme, one of the largest community heating (and cooling) networks in the UK, is run by a project specific company called Southampton Geothermal Heating Company Ltd (SGHC), set up under a Joint Cooperation Agreement between Southampton City Council and the Utilicom Group, an energy management company.

Mike D. Smith, Executive Director, comments, ‘This isn’t a mainstream area of work for local authorities; there isn’t much capital to invest and no chance of subsidising the scheme through council tax, so there was a need to transfer risk to a private sector company which had necessary finance, skills and experience.’ The Southampton District Energy Scheme is owned by the Utilicom Group which has developed, financed and operated it.

In return, the private sector needed security from the Council – low rent for the Heat Station site, a guarantee that the Council will be their first customer, transfer of EU funding won by the Council to the company and also cooperation in the future joint development of the scheme. Each year the Council shares in the profits from the scheme.

Other Information

  • Location: Southampton
  • Project Team: Key partners: Southampton City Council Developer: Utilicom Ltd Masterplanner: Utilicom Ltd
  • Contact:


UDC2 Section - Managing Quality Placesace 

A joint venture between the local authority and an energy management company to establish Southampton District Energy Scheme has led to the development of 11km of connections, the production of 70 million kW hours of energy per annum and an annual saving of 11,000 tonnes of CO2.

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