Fundraising

Scottish Equity Partners funds new efficient heating platform

The firm's partnership with an energy efficiency developer will see the platform introduce low carbon boilers to multi-occupancy or business premises.

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Scottish Equity Partners (SEP) has invested £9 million ($12.8 million; €11.7 million) into a new platform funding small-scale energy and heating projects across the UK.

The new vehicle, Ardor Energy, is a partnership with Sustinere Solutions, an energy efficiency developer. The platform will procure, install and maintain a pipeline of biomass, gas boilers and combined heat and power projects, in buildings like apartment blocks, care homes, leisure centres and hotels under long-term energy supply agreements. Ardor is expected to qualify for the government’s Renewable Heat Incentive subsidy.

SEP’s investment is from its £135 million Environmental Capital Fund.

Peter Bachmann, a director at SEP, said the UK will need to increase its renewable heat usage from 2 to 12 percent to meet requirements from the European Union Renewables Energy Directive. “There is a significant market opportunity in helping transition the UK to low carbon heating solutions. SEP’s investment in Ardor will facilitate the roll-out of a number of low carbon heat driven projects across the country.”

SEP is a London-based equity firm investing growth capital in innovative energy companies. One of its most recent moves is another £9 million investment in a small-scale wind project constructing 200 turbines across Scotland’s Highlands and Islands.

Ardor will use biomass installation company Wood Energy for its first project next month at a Linden Homes apartment building in London. All 252 homes currently buy heat from a central energy station. Ardor’s project will use a biomass and gas boiler system to provide heat directly to the homes.

Bachmann added that “overcoming the complexities” of the Linden Homes project will prove the Ardor platform can bring value to the heat sector.

Steve Wilkinson, a managing director of Sustinere, said, “We see a major opportunity in the provision of low carbon, fully managed heat and power services to businesses seeking to divert capital from non-core to core functions.”