The Combined Heat and Power Association recently held its annual award ceremony at London's Banqueting House. The auspicious surroundings reflect the recent fortunes of a sector that has thrived as an increasing range of large scale developments look to meeting their own energy needs onsite.

Through an increased range of financing options, including sophisticated PPP and PFI initiatives, the risks of integrating energy generation into project development are minimised, whilst the benefits on offer are largely maintained. Looking at the winning entries to the CHPA, the attraction becomes clear.

Law firm Hill Dickinson collected the CHPA Innovation Award for its involvement in delivery of the landmark National Museums Liverpool (NML). Through installation of a tri-generation CCHP system, the museum is now able to meet its own energy needs (cooling, heating and electricity), through on-site energy generation in an environmentally friendly way that will also save the museum over £500,000 a year. The public private partnership structure delivered by Hill Dickinson meant there was no requirement for any capital outlay by NML, effectively allowing the scheme to 'pay for itself' through reduced cost of energy in use.

The services Hill Dickinson provided for this project involved drafting a complex set of agreements between NML and delivery partner ENER·G, which set out ENER·G's commitment to design and install its proposed energy solution for the Museum by early 20101. The contract also outlines ENER·G's obligation to operate and maintain the installation for a term of 17 years.

E.ON, in partnership with Barratt Homes, received the Community and Residential Award for the community energy scheme it now operates at Dalston Square, a Barratt Development in East London. Dalston Square comprises over 550 residential units (private and social housing), retail units and a library. The community energy network provided by E.ON locally generates and distributes low carbon and renewable heat (supplied in the form of hot water) and power across the site.

The community heating network is estimated to save residents and businesses up to 23 per cent on their energy bills and reduce C02 emissions by up to 25 per cent. At the heart of the scheme sits an energy centre comprising a number of combined heat and power (CHP) units, along with a biomass boiler and gas-fired boilers. Residential units receive their electricity via the National Grid; however the library and retail units will receive electricity generated in the energy centre through the CHP units.

The scheme will be operated and maintained under an energy services (ESCo) agreement for the next 25 years and is part of a commercial partnership between E.ON and Barratt to work progressively towards the 2016 zero carbon targets set by Government.

A community energy scheme placed at the heart of the new Northern home of the BBC, in Salford's MediaCityUK development secured the CHPA's Industrial and Commercial Award. The project, to be delivered by Cofely, including the installation of the CHP Energy Centre, will result in a saving of £560,000 in energy costs per year if the development has been sourcing power, heat and cooling from conventional sources. It will also produce 29 per cent less CO2 emissions than if the development had opted to use traditional grid electricity and standard onsite boilers.

MediaCityUK is a £500 million project being developed and delivered by Peel Media (a division of the Peel Group). The 37 acre waterfront site being built in phase one will provide a new home for the BBC North, as well as an education centre for Salford University. It will also offer commercial, retail and residential space. Cofely was commissioned to design, build and operate the tri-generation scheme. Construction began in summer 2007, the first phase went live in November 2009 and the site will be fully operational by 2011.

With such consistent returns seemingly on offer, adding localised energy generation to the list of project considerations certainly seem worth considering. As the ESCo sector continues to mature and offer a growing variety of sophisticated structured finance and contractual arrangements, realising the benefits it offers has never been easier.