Industrial Heat Recovery Support – identifying eligible projects & making strong applications

Industrial Heat Recovery Support – identifying eligible projects & making strong applications
20 November 2018

Applying to the IHRS Programme

In my previous blog, I discussed the main aspects of the Industrial Heat Recovery Support (IHRS) Programme.

In this blog I take a more detailed dive into:

  • The types of project you can apply for.
  • The process of making your application.
  • What a strong application would look like.

Types of project you can apply for

Grant funding may be available for projects that recover heat from an existing process and use it in one of the following ways:

  • On site to satisfy existing or potential heating or cooling demand.
  • Off site to satisfy existing or potential heating and cooling demand.
  • Convert it to mechanical or electrical power.

The inclusion of ‘cooling demand’ means that projects involving the deployment of absorption chillers for process cooling are in scope.

Where the demand is ‘potential’, it must be commercially viable. This means that, in the absence of the recovery of the waste heat, it would be commercially viable to satisfy the heating or cooling demand from another source.

Making your application

You must register with the Department for Business, Energy and Industrial Strategy (BEIS) Delivery Partner before you can make your application. Please visit the IHRS Programme guidance and application forms website for more details.

As part of this registration process, you will have to tell the Delivery Partner where your project is in the development life-cycle. This is to ensure that you enter the Programme at the correct phase.

To notify the Delivery Partner correctly, you should think about what you need to do next to move your project forward. The Programme defines project development according to the following stages:

  • Stage 1 – Feasibility studies.
  • Stage 2 – Preliminary engineering.
  • Stage 3 – Detailed design.
  • Stage 4 – Construction.
  • Stage 5 – Commissioning.
  • Stage 6 – Operational start-up.

You can apply for funding for feasibility studies and preliminary engineering (i.e. Stages 1 and 2), preliminary engineering only (i.e. Stage 2 only) or for detailed design through to operational start-up (i.e. Stages 3 to 6). If you are seeking funding for Stages 1 and 2, you will make an application to Phase 1 of the Programme. If you are seeking funding for Stages 3 to 6, your application will be to Phase 2.

After you have registered, the Delivery Partner will send you something known as a ‘Checkpoint Form’ to complete and return. There are three Checkpoint Forms that are used to enter the Programme. The form you will be asked to complete will depend on what you said about the current stage of your project when you registered.

Your completed Checkpoint Form will be reviewed and, if all is well, you will be sent an application workbook to complete and submit.

Characteristics of a good applications

There are four assessment criteria common to applications made to Phase 1 and Phase 2. A fifth criterion (Value for Money) is applicable just to Phase 2 applications. Below, I describe some of the characteristics a strong application will have against each of the assessment criteria.

Criterion 1: Technical Concept/Design

Strong applications will:

  • Provide robust data that substantiate the applicant’s claims about the quantity of heat available for recovery. This means being able to provide data on the flow rates of the medium carrying surplus heat, its temperature and other properties necessary to determine the quantity of heat available for recovery, such as the medium’s composition.
  • Demonstrate that the factors affecting when surplus heat is available and when heat is demanded by the heat sink are understood, and that the two are temporally well matched. Again, data substantiating the temporal characteristics of heat availability and demand will strengthen the application.
  • For Phase 1 applications, explain why the technology chosen for recovering heat was selected over other potential solutions and demonstrate that this technology is sufficiently mature for the Programme.
  • In the case of Phase 2 applications, set out all key findings and outcomes from the previously undertaken feasibility and preliminary engineering studies.

Criterion 2: Delivery Plan

Strong applications will:

  • Show that you have identified the full range of competencies necessary to deliver your project and resourced these.
  • Set out when these competencies are needed and confirm that they will be available at these times.
  • Break down the delivery activities into SMART tasks (i.e. tasks that are Specific, Measurable, Achievable, Relevant and Timebound).
  • Define the risks that are specific to your project, quantify these risks and identify mitigation actions that are realistic and relevant.

Criterion 3: Cost, Finance and Additionality

Strong applications will:

  • Show that all costs have been identified and listed. Providing quotes as supporting evidence will be a distinct advantage here.
  • Be clear that the costs do not include any component of profit.
  • Be clear about where your funding is coming from (e.g. cash, external investment or loans).
  • Be absolutely clear about the additionality of grant funding for your project. This means persuading the Delivery Partner that, for your project to progress, grant funding is needed, how much is needed and why. This is an important point to make well if you are to be successful in this competitive process.

Criterion 4: Wider Benefits

Strong applications will:

  • Provide robust data to support estimates of the quantity of heat that can be recovered, and the environmental benefits and operational cost savings arising from this.
  • Set out the wider environmental, economic, employment and social benefits that would be derived from the project and explain how these arise.
  • Explain the extent to which the project could be applied to other sites in your sector or industry in general.

Criterion 5: Value for Money (Phase 2 only)

To stand the best chance of success, Phase 2 projects will have to show at the application stage that they will effectively leverage the grant funding requested when delivering the project’s various benefits. This means maximising the energy savings and avoided carbon dioxide emissions per unit of grant funding sought. This is achieved by thinking very carefully about the minimum amount of grant you need to progress your project and making your application on that basis. 

How Ricardo can help

We work with you to scope out and develop your application. We will:

  • Assess the current stage of your project.
  • Demonstrate the commercial viability of ‘potential’ demand for heat and cooling.
  • Advise on heat recovery technology maturity.
  • Assemble the evidence and construct the technical case for your application.
  • Advise on the wider benefits of your project and develop a strong, evidence-based case for these.
  • Develop your additionality case for why your project needs grant funding.
  • Develop strong risk registers for your project.
  • Advise on the overlaps and synergies between your project and other funding mechanisms.

Future Blogs

My next blog on 4th December will look at some of the challenges with carrying out feasibility studies for heat recovery projects and the important things to get right.