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        "title": "Heat and Power Supply and Heat Pump Operation - Birmingham Children's Hospital",
        "description": "Birmingham Women's and Children's NHS Foundation Trust (the \"Trust\") intends to enter into a contract with Birmingham District Energy Company (\"BDEC\") on the terms described below (the \"Contract\"). The parties to the Contract shall be BWC Management Services Limited (\"BWCMSL\") (a wholly owned subsidiary of the Trust), and/or the Trust (or in each case, any successors thereof) (with the contracting entity/entities referred to as the \"Authorities\"), and BDEC. Pursuant to the Contract, BDEC will supply heat and power to Birmingham Children's Hospital via the existing District Heating Network scheme, utilising a ground source heat pump (\"GSHP\") acquired by the Trust with funding from the Department for Energy Security and Net Zero's Public Sector Decarbonisation Scheme. The Contract will require BDEC to operate and maintain the ground source heat pump as part of the overall transaction. BDEC currently supplies heat and power services to Birmingham Children's Hospital in relation to the Trust's existing Combined Heat and Power (\"CHP\") system through a back-to-back agreement between Birmingham City Council and BDEC (the \"Current Arrangement\"). The Contract will supersede all of the obligations relating to heat and power pursuant to the Current Arrangement. However, the Authorities will continue to require certain services currently provided through the Current Arrangement, under the new Contract, to the extent that such services are required as part of the Authorities' heat/power resilience strategy. The Contract will support the Trust's objective of meeting NHS England's carbon reduction targets by 2027, five years ahead of its mandated target, while ensuring continuity of service and technical compatibility across the network.",
        "status": "complete",
        "procurementMethod": "direct",
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        "procurementMethodRationale": "BDEC has exclusive rights to supply heat and power to Birmingham Children's Hospital by virtue of the Current Arrangement, and it currently has exclusive ownership and operation of its district energy network scheme which supplies heat to the Trust. It would not be possible for the Authorities to permit an alternative supplier to operate and manage the GSHP plant and equipment as part of the provision of the service independently of the district energy network scheme. The Trust has no ability or right to oblige BDEC to allow a third party to deliver heat on the network. This ground is demonstrated by the technical incompatibility of operating two independent energy centres for the CHP and GSHP systems at incompatible specifications on the same heat network (even if BDEC was to allow a third party to deliver heat on its network). In particular, the differing operating parameters of the respective systems mean that, if the outputs are not aligned, this could result in inefficiencies in the operation of the plant, higher operational costs, or plant shutdown, given that both systems utilise the same pipework. Achieving compatibility would give rise to disproportionate technical difficulties in operation.",
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        "riskDetails": "Description of risks to contract performance The following known risks could jeopardise the satisfactory performance of the Contract over its term: Ageing plant: the existing CHP plant and associated network infrastructure may require major refurbishment or replacement during the term. Combined operation of CHP and GSHP: the ongoing operation of the CHP and GSHP systems on the same heat network may require changes to plant, controls or the operating regime to maintain efficient and reliable operation. Long-term GSHP performance: the output or efficiency of the ground loop, boreholes or heat pump plant may decline over the term, requiring remedial works or additional or replacement plant. Changes in demand: redevelopment, extension, reconfiguration or rationalisation of the Birmingham Children's Hospital site or its services may materially change the Authorities' heat and power requirements. Change in law and regulation: including the regulation of heat networks, heat network zoning under the Energy Act 2023, NHS and government net zero requirements, and energy taxes and levies, which may require changes to the services, service standards, metering, pricing or plant. Energy market volatility: significant changes in electricity or gas prices may affect the cost of operating the GSHP and CHP systems and the operation of the pricing mechanism. Network and third-party arrangements: changes to, or termination of, the arrangements between BDEC, Birmingham City Council or other parties relating to the ownership, operation of or access to the district energy network. Resilience and continuity of supply: prolonged plant failure or network outage requiring alternative or back-up heat and power provision for a critical healthcare site."
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