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District thermal-energy networks — a central energy centre that pipes heat or cooling to whole districts and precincts. Not a RAB network but an energy-services (ESCO) business: sell thermal energy per MWh (plus standing or take-or-pay charges) and earn the spread over the cost of the heat or cooling source. Pick a real operator below and follow it through the network, the model and a working returns model.
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Drag the sliders to see what earns the money — the connected load, the thermal tariff, and the load factor (how much heat or cooling is actually drawn) against the cost of the source.
A heat network replaces thousands of individual boilers (or chillers) with one central energy centre that pipes hot — or chilled — water through insulated flow and return mains to every connected building. The business is an energy-services (ESCO) one, not a RAB: it sells thermal energy per MWh (plus a standing or, in district cooling, a take-or-pay capacity charge) and its margin is the spread between the tariff and the cost of its source. The prize is a cheap, low-carbon source — waste heat, CHP, waste-to-energy, large heat pumps — which widens the spread. Contracts are long, the customer base is sticky (switching off district heat is disruptive), and capacity charges make the cash flow stable even when the volume swings with the seasons. Growth comes from connecting more buildings and districts.
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See also Gas distribution and Energy transition — the fuels and sources behind the heat — and the Cash-flow & DCF model.