---
title: "Heat Supply Agreement relating to South East London Combined Heat and Power District Heating Network"
ocid: "ocds-h6vhtk-06064e"
canonical_url: "https://d3tenders.com/contract/?ocid=ocds-h6vhtk-06064e"
markdown_url: "https://d3tenders.com/contract/ocds-h6vhtk-06064e.md"
json_url: "https://d3tenders.com/contract/ocds-h6vhtk-06064e.json"
source: "Find A Tender Service"
current_stage: "Award"
buyer: "SOUTHWARK COUNCIL"
published: "2026-01-15"
---

# Heat Supply Agreement relating to South East London Combined Heat and Power District Heating Network

Buyer: SOUTHWARK COUNCIL  
Current stage: Award  
OCID: ocds-h6vhtk-06064e

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## Summary

Southwark Council has completed the procurement process for a significant modification of an existing Heat Supply Agreement with Veolia ES Southwark Limited, originally commenced on 14 June 2013. This agreement pertains to the District Heating Network in South East London, encompassing areas such as Old Kent Road and Peckham. The procurement, classified under the 'goods' category for district heating, has a total value of £267.9 million. The contract, procured via a limited method, involves modifications to extend both the geographical coverage and duration, with a new expiry date of 31 March 2050. This negotiated extension aims to meet environmental goals linked to carbon neutrality by 2030.

This tender presents substantial opportunities for businesses involved in energy and heat services, construction, and technical consultancy. Those specialising in the building and maintenance of heat-transfer stations or involved in energy consultancy can greatly benefit, particularly those offering unique solutions that promote low carbon outputs. The long-term nature of the contract, set to last until 2050, offers stable business development potential for large operators with the capacity to manage and deliver complex energy projects. Furthermore, businesses capable of handling regulatory compliance and technical integration across energy systems make ideal candidates for partnership and subcontracting opportunities within this overarching project.

## Notice

Southwark Council (Council) and Veolia ES Southwark Limited (Veolia) entered into a PFI Project Agreement (Project Agreement) on 11 February 2008 for integrated waste management services for an initial term of [25] years . The procurement of the Project Agreement was conducted under the Public Services Contracts Regulations 1993 with a total value of 665,000,000.00 GBP. In 2013, the Council entered into a separate heat supply agreement (HSA1) with Veolia for heat supply services by means of a district heating network (Heat Network) to take waste heat from South East London Combined Heat and Power (SELCHP) to certain Council premises. The services in HSA1 were not included in the Project Agreement. HSA1 was entered into pursuant to the exemption set out in Regulation 14(1)(d)(i) of the (now repealed) Public Contracts Regulations 2006. This exemption allowed the Council to directly procure Veolia for the provision of heat supply services not included in the Project Agreement, which had subsequently become necessary due to unforeseen reasons. The HSA1 was entered into on 14 June 2013 and a related contract award notice was published on 3rd August 2013 (OJEU Reference Number: 2013/S 150-261592 ). The original term of the HSA1 as awarded was coterminous with the Project Agreement (i.e. expiring on 10 February 2033 . HSA1 is due to expire on 10 February 2033. The Council is now proposing to make the following modifications to the HSA1 via a Deed of Variation: 1) an extension to the geographical coverage and extent of the Heat Network so that it [includes/covers [insert details]some areas within the wards of Old Kent Road, Nunhead & Queen's Road, Peckham, Rye Lane and St Giles (Geographical Coverage Modification); and 2) an extension to the duration of the contract so that instead of expiring on 10 February 2033 it will expire on 31 March 2050 (Duration Modification). Further information regarding the Geographical Coverage Modification can be found in a map (Figure 1 on page 5) within the Council's published governance document to be found on the Council's website here: https://moderngov.southwark.gov.uk/documents/s130163/Report GW3 SELCHP Heat NetworkPhase2Extension.pdf The Council considers that it is entitled to rely upon Regulation 88(1)(b) of the Utilities Contracts Regulations 2016 (UCR) to modify the HSA1 to incorporate the Geographical Coverage Modification and Duration Modification without requiring a new procurement procedure for the reasons set out in Annex D2. The Council will not enter into the Deed of Variation until the expiry of at least 30 days from the publication of this notice.

### Lot Information

Lot 1

District Heating extension of SELCHP facility as set out in this notice. Southwark Council (Council) and Veolia ES Southwark Limited (Veolia) entered into a PFI Project Agreement (Project Agreement) on 11 February 2008 for integrated waste management services for an initial term of [25] years . The procurement of the Project Agreement was conducted under the Public Services Contracts Regulations 1993 with a total value of 665,000,000.00 GBP. In 2013, the Council entered into a separate heat supply agreement (HSA1) with Veolia for heat supply services by means of a district heating network (Heat Network) to take waste heat from South East London Combined Heat and Power (SELCHP) to certain Council premises. The services in HSA1 were not included in the Project Agreement. HSA1 was entered into pursuant to the exemption set out in Regulation 14(1)(d)(i) of the (now repealed) Public Contracts Regulations 2006. This exemption allowed the Council to directly procure Veolia for the provision of heat supply services not included in the Project Agreement, which had subsequently become necessary due to unforeseen reasons. The HSA1 was entered into on 14 June 2013 and a related contract award notice was published on 3rd August 2013 (OJEU Reference Number: 2013/S 150-261592 ). The original term of the HSA1 as awarded was coterminous with the Project Agreement (i.e. expiring on 10 February 2033 . HSA1 is due to expire on 10 February 2033. The Council is now proposing to make the following modifications to the HSA1 via a Deed of Variation: 1) an extension to the geographical coverage and extent of the Heat Network so that it [includes/covers [insert details]some areas within the wards of Old Kent Road, Nunhead & Queen's Road, Peckham, Rye Lane and St Giles (Geographical Coverage Modification); and 2) an extension to the duration of the contract so that instead of expiring on 10 February 2033 it will expire on 31 March 2050 (Duration Modification).

### Procurement Information

The Council's position is that the proposed modifications to the HSA1 are permitted modifications under Regulation 88(1)(b) of the UCR 2016 on the basis that there is a need for additional works, services or supplies by Veolia, irrespective of value, which have become necessary despite not being included in the initial procurement where a change of contractor (i) cannot be made for economic or technical reasons; and (ii) would cause significant inconvenience or substantial duplication of costs for the Council. The Council considers that the works/services related to the Geographical Coverage Modification are necessary in order to achieve a significant reduction in the local combustion of natural gas via the use of low carbon waste heat from SELCHP in order to meet its environmental obligations and commitments with regard to air quality and becoming carbon neutral by 2030. The Duration Modification is also necessary because a 25-year operational period is required in order for a contractor to amortise its capital costs of building the extension to the Heat Network. The Council also understands that private connections to the extended Heat Network will only sign up to heat supply agreements that are for a period of 20 years or longer. HSA1 is due to expire on 10 February 2033 and does not allow for an appropriate amortization period. The Council has concluded that a change of contractor cannot be made for economic or technical reasons because Veolia owns and operates SELCHP and therefore controls the supply of low carbon waste heat. It is the Council's view that no other supplier can supply enough low carbon heat to the Council at an equal or similar price to serve the required network extension, especially at the temperatures required. Furthermore, it would not be economically viable to use another supplier as they would have to buy the low carbon heat from Veolia to then sell to the Council. The Council considers that Veolia would not sell the low carbon heat to a third party at the same competitive rate as currently supplied to the Council as there is no commercial incentive to do so. The Council also considers that a change of contractor would cause major inconvenience and substantial duplication of costs if it was required to procure a third-party operator to operate and maintain the extension to the Heat Network for the extended duration. Additionally, if a contractor other than Veolia is appointed to operate and maintain the extension to the Heat Network this would mean that different contractors would be operating different parts of the same network, which would be technically and economically unviable in having duplicate control systems, water quality testing and other risk/contract interface implications. For the reasons set out in this notice the Council considers that it is necessary for the additional works/services to be awarded to Veolia for economic or technical reasons and that it would cause significant inconvenience or substantial duplication of costs for the Council to award the required works/services to another contractor.

## Key Details

| Field | Value |
| --- | --- |
| Publication source | Find A Tender Service |
| Latest notice | https://www.find-tender.service.gov.uk/Notice/003345-2026 |
| Notice type | Award Notice |
| Procurement type | Standard |
| Procurement category | Goods |
| Procurement method | Limited |
| Procurement method details | Negotiated without publication of a contract notice |
| Tender suitability | Not specified |
| Awardee scale | Large |
| All stages | Award |

## Dates

| Field | Value |
| --- | --- |
| Publication date | 15 Jan 2026 |
| Submission deadline | Not specified |
| Future notice date | Not specified |
| Award date | 12 Jun 2013 |
| Contract period | Not specified |
| Recurrence | Not specified |

## Values

| Field | Value |
| --- | --- |
| Tender value | Not specified |
| Lots value | Not specified |
| Awards value | Not specified |
| Contracts value | £267,900,000 |

## Status

| Field | Value |
| --- | --- |
| Tender status | Complete |
| Lots status | Not specified |
| Awards status | Active |
| Contracts status | Active |

## Buyer

| Field | Value |
| --- | --- |
| Main buyer | SOUTHWARK COUNCIL |
| Locality | LONDON |
| Post town | South East London |
| Postcode | SE1 2QH |
| Country | England |
| ITL 1 | TLI London |
| ITL 2 | TLI4 Inner London - East |
| ITL 3 | TLI44 Lewisham and Southwark |
| Local authority | Southwark |
| Electoral ward | London Bridge & West Bermondsey |
| Westminster constituency | Bermondsey and Old Southwark |
| Delivery location | TLI44 Lewisham and Southwark |

## Supplier

| Field | Value |
| --- | --- |
| Number of suppliers | 1 |
| Supplier names | VEOLIA ES SOUTHWARK |

## CPV Codes

### Divisions

- 09 - Petroleum products, fuel, electricity and other sources of energy
- 45 - Construction work
- 50 - Repair and maintenance services
- 71 - Architectural, construction, engineering and inspection services
- 73 - Research and development services and related consultancy services

### Codes

- 09323000 - District heating
- 45231100 - General construction work for pipelines
- 45232142 - Heat-transfer station construction work
- 45259000 - Repair and maintenance of plant
- 50410000 - Repair and maintenance services of measuring, testing and checking apparatus
- 71200000 - Architectural and related services
- 71314000 - Energy and related services
- 71315100 - Building-fabric consultancy services
- 71315200 - Building consultancy services
- 71315210 - Building services consultancy services
- 71315300 - Building surveying services
- 71315400 - Building-inspection services
- 71420000 - Landscape architectural services
- 71510000 - Site-investigation services
- 71540000 - Construction management services
- 73220000 - Development consultancy services

## Release History

- 15 Jan 2026 at 09:59 - Award - Award Notice - https://www.find-tender.service.gov.uk/Notice/003345-2026

## Notice URLs

- http://www.southwark.gov.uk
- https://moderngov.southwark.gov.uk/documents/s130163/Report
- https://ted.europa.eu/udl?uri=TED:NOTICE:261592-2013:TEXT:EN:HTML

## Provenance

This Markdown file is an alternate public rendering of the D3 Tenders contract record. The canonical page is https://d3tenders.com/contract/?ocid=ocds-h6vhtk-06064e. The underlying structured data is available as OCDS JSON at https://d3tenders.com/contract/ocds-h6vhtk-06064e.json.