Enfield's council-owned heat network made £1.91m pre-tax profit but will use all of its £6m working capital facility in 2026/27. Cabinet sees it on 14 October.

Energetik, the heat network company owned by Enfield Council, will use the whole of its £6m working capital facility in 2026/27 and may need more support if its customers connect late. That is the warning in the company’s operating plan, which goes to the council’s Cabinet on Wednesday 14 October. (Enfield Council, Cabinet report KD 6080)

The same report records a second profitable year. Energetik made a profit before interest and tax of £3.43m in 2025/26, and £1.91m before tax. It connected 392 more homes, taking the total to 1,874, with another 2,838 signed up through connection agreements.

Cabinet is asked to note the plan, not approve it. Under the shareholder agreement the company reports its operating plan to the council each year for information only.

What the council has put in

The report’s financial section sets out the scale of the council’s exposure:

  • £57.4m of loans lent or on-lent to Energetik by the council
  • £18.3m of grants invested as equity
  • a working capital facility that was to be extended from £3.5m to £6m under an earlier decision, KD 5645, and which the plan now assumes is used in full
  • a budgeted drawdown of £2.5m during 2026/27 to reach that £6m

The grants and loans were made to the council in the first place, so the council “remains obligated to lenders and grant funders” to meet their conditions, including delivering specified works by agreed dates.

The report says the full facility, a near break-even budget and a reliance on £3.6m of connection fee income together “implies a risk that further working capital support could be required during 2026/27 if further risks materialise”.

Bar chart in pounds millions from Enfield Council's Cabinet report: council loans to Energetik 57.4, grants held as equity 18.3, Public Sector Decarbonisation Scheme schools grant 18.6, planned 2026/27 capital investment 16.6, working capital facility 6.0
Chart by Enfield Today
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Why the money is tight

Energetik’s problem is timing. Its pipes and energy centre have been built ahead of the developments that were meant to pay for them.

The report says delays to major developments “compared to 2015 assumptions” have left heat network infrastructure “delivered ahead of revenues, creating working capital pressures and increased reliance on loan facilities”. The continued weakness of the London housing market “remains a significant challenge”.

The forecast for 2026/27 is a profit of £1.6m before interest and £0.1m after interest. That depends on the £3.6m of connection fees arriving on time. Recurring heat sales are “still modest as the network grows”.

The plan covers one year rather than the usual three. The report gives two reasons: a new managing director has recently been appointed, and the company is in “the process of seeking a strategic investor”. A three-year plan for 2027/28 to 2029/30 is promised before next April.

What was built in 2025/26

The report lists the year’s achievements:

  • 2.4km of pipeline completed, with about 7.2km more funded and in planning
  • the Edmonton energy centre finished, and “ready to receive waste heat when the nearby Energy from Waste Facility comes online in 2031/32“
  • an £18.6m Public Sector Decarbonisation Scheme grant, with the council, to decarbonise eight schools
  • most staff moved from day rates to permanent contracts, and a new executive director and finance director in post
  • a narrower network plan, agreed with funders, focused on “affordable, deliverable and commercially attractive connections”
  • a business plan addendum shifting the company away from reliance on council developments and towards retrofitting existing buildings for earlier income

The energy centre and the hospital

Handover of the energy centre from the contractor, Vital Energi, is being prepared. Heat from the centre is planned from the second quarter of 2027. The report says it can distribute 60MW of heat, “equivalent to around 200,000 homes”.

The waste plant it was designed to draw heat from is not due until 2031/32, so the centre will run for years before its intended fuel source exists. The report does not say how heat will be produced in the meantime.

North Middlesex University Hospital was planned as an anchor customer “from inception” but “has not yet been secured”. The report says the hospital would use the equivalent of about 2,000 homes of energy and is “the biggest single gas polluter in Enfield”, emitting 3,480 tonnes of CO2 a year.

The company also sees an opportunity in the government’s heat network zoning policy. In designated zones, large non-domestic buildings, new developments and communal residential blocks would have to connect to a local network or be “heat-network ready”. The report expects the law to follow in 2026/27.

What it means for you

  • If you are an Energetik customer, nothing changes to your supply from this report. The plan is about the company’s finances, not tariffs.
  • If you pay council tax in Enfield, the council carries £57.4m of loans and £18.3m of grants on the company’s behalf. The report says the council “will need to continue to monitor” the company’s liquidity and “the affordability of any further support that may be required in future years”.
  • If you live near the EcoPark, heat supply from the new energy centre is planned from mid 2027, four years before the waste plant it was built for.
  • Cabinet meets at 7pm on Wednesday 14 October at the Civic Centre, Silver Street. The Energetik item is public, but the appendices with the budget and connection fees are in the closed Part 2 session.

The council’s wider finances are set out in our coverage of its plan to close three schools, which is on the same agenda, and in our council tax bands page.

Sources