Long term energy services contracts are the key to unlocking the full potential of the renewable energy market in the UK, according to a leading figure in the sector.

Customers need more choice to encourage them to invest in new technologies, according to Brian Davidson, founder and CEO of Geothermal International, the UK provider of GSHP systems.

He stated that flexible investment solutions that take the strain out of meeting the upfront costs of installation, combined with long term performance related service agreements, will prompt more companies to opt for alternative energies.

“Customers on energy services contracts will not only receive energy efficiency benefits from day one but will also see a considerable improvement in their carbon footprint.” explained Davidson.

Recognising that this approach is the way forward, GI has recently branched out into the energy services market by partnering with Octopus Investments, a company with a strong record of supporting renewable energy initiatives.

Retail giant Sainsbury’s is the first customer to sign up for the GI-installed model, supported by Octopus’ investors, to provide the complete design, installation and maintenance agreement which Davidson hopes will act as a model for the market.

Sainsbury’s is widely recognised as a leader in environmental initiatives and has signed up for the energy services contract as part of its commitment to reduce its absolute operational carbon footprint by 30% by 2020 (equivalent of 65% compared to 2005), and 50% by 2030.

Under the energy services agreement, GI is already installing compact GSHP systems at two Sainsbury’s stores, in Carlisle and East Kilbride, with more to follow. Each will vary in capacity between 750kW and 1MW, depending upon the size of the store, and will comprise a compact ground loop with boreholes up to 200m deep sunk in the store’s car park.

For Sainsbury’s each GSHP system will be linked to the store’s refrigeration system, reducing energy consumption by up to 30% while cutting its annual carbon footprint by 30%.

A control panel manages the ground loop temperature to maximise the efficiency of the whole system, achieving up to a 30% reduction in energy consumption for a store’s refrigeration system – a significant saving for a supermarket. The heating can be up to five times more efficient than gas central heating.

Not only does the GSHP use the warmth stored naturally underground to heat the supermarket in cold weather, it also ‘sinks’ waste heat produced by the store’s refrigeration system back into the ground during the year – thus providing inter-seasonal heat storage, improving the efficiency of the system. Each compact GSHP system will take up less space – up to 70% less – than a conventional heating only GSHP system.

Neil Sachdev, Sainsbury’s property director, commented, “We are continuing to lead the way in environmental firsts. We were the world’s first to use geo-thermal technology in a supermarket and our partnership with GI is an important milestone in our renewables commitment and supports job creation in the renewable energy sector. GI has a proven track record in the commercial ground source heat pump space. Its understanding of Sainsbury’s energy efficiency requirements and its innovative approach to the task as well as its experience will be invaluable in helping us to achieve our 2020 sustainability goals.”

Commenting on their partnership with GI, Joe Hartman, investment manager at Octopus, said, “The investment opportunity in the renewable energy sector is significant and the market continues to have strong support from the Government. With Octopus working alongside ‘best in class’ partners we believe we’re exceptionally well placed to realise the investment potential of the sector and to deliver on our commitments to investors.”

Davidson concluded, “GI has been at the forefront of GSHP technology in the UK since 2000 and we are confident that the innovative financing structure which we have designed will ensure that GI will continue to play a dominate role within the renewables sector.”