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September 2010 1 Contracting Models Louise Simmonds TV Energy Contracting Models.

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Presentation on theme: "September 2010 1 Contracting Models Louise Simmonds TV Energy Contracting Models."— Presentation transcript:

1 September Contracting Models Louise Simmonds TV Energy Contracting Models

2 September Contracting Models Single User Typically rural estate with own resource supplying own boilers Wood Fuel Purchaser Single or multiple end users purchasing wood under supply contract Heat Supply ESCo Energy Services Company supplies heat to end user

3 September Contracting Models Single User Simplest operation Wood grown and processed on site using own equipment and staff Self financed and/or using grant or other funding sources if available Surplus sold to other local users or to aggregator Heat supplied to own buildings Limited commercial or contractual effects May need to buy in additional supply and become a Wood Fuel Purchaser Hillfields or Englefield Estate

4 September Contracting Models Wood Fuel Purchaser Buyer of wood fuel for single or multiple users under their control Responsible for own plant – choice and maintenance Single or multiple installations self funded using grants or any other funding sources available at time Security of Supply and Quality Control Single Supplier Aggregator The Long Term Contract Contractual Heads of Terms Berkshire College of Agriculture or Waterperry

5 September Contracting Models Heat Supply ESCo Energy Services Company Owns and installs plant in single or multiple end users premises Maintains and services plant Arranges purchase and delivery of wood fuel Metres heat use and bills end user accordingly under Heat Supply Contract Contracts with Aggregator or Single Supplier for wood fuel supply May be an Aggregator or Wood supplier TV Bioenergy and Curridge School

6 September Contracting Models The Wood Supply Contract Security of Supply Suppliers & Purchasers Obligations Quality Control Precise description of wood – size, moisture content etc Long Term Supply Two to ten years – termination, assignment and sub-contracting Fixed Price for an agreed period Breaks for price revisions Remedies for default Financial, alternative supply and ultimately the end of contract Insurances Negligence and public Liability

7 September Contracting Models The Heat Supply Contract Security of Heat Supply ESCO will ensure heat supply inc. alternative if necc Security of plant maintenance/servicing ESCo will maintain and service plant No need to worry about wood purchase ESCo will purchase wood and arrange for delivery under wood supply contract or provide the wood itself Quality Control of Fuel not an issue ESCO will ensure quality Long term contract ESCo will need long term contract to invest – 10 Years Knowledge of future costs for agreed period Remedies for Default – largely financial – end of contract more significant here as plant owned by ESCo


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