The Housing and Regeneration Policy and Scrutiny Committee met to review a Cabinet Member decision regarding the future of the Pimlico District Heating Undertaking (PDHU). The committee ultimately decided to take no further action, allowing the Cabinet's decision to stand.

Future of the Pimlico District Heating Undertaking (PDHU)

The committee reviewed a Cabinet Member decision concerning the future of the Pimlico District Heating Undertaking (PDHU), which had been called in by Councillors Fisher, Harvey, and Oteh-Osoka. The PDHU is one of the largest and oldest district heating systems in England, estimated to be between 50 and 75 years old. It is now well past its intended lifespan, leading to increasing maintenance costs, unreliability, and leaks.

Councillor Liza Begum, Cabinet Member for Housing Services, explained that the council has been exploring various options to ensure residents receive reliable, affordable, and low-carbon heating. Thirteen potential options were initially assessed against criteria including affordability, disruption, deliverability, strategic alignment, operational resilience, and environmental impact. An interim stage of the outline business case was introduced to allow for more detailed analysis before proceeding to a full outline business case. On 16 October 2025, Cabinet agreed to a shortlist of four of the highest-scoring options, plus the best-performing direct electric option, for further development.

Councillor Ryan Jude, Cabinet Member for Climate Action, Colleging, Corpinoff and Air Quality, emphasised that the decision was an important step to gather the necessary information for the next phase, acknowledging the stress the project was causing residents. He reiterated that the system is significantly past its useful life and that the most affordable and deliverable solution for the future needs to be found.

The call-in was prompted by concerns that Cabinet had not been able to make a well-informed decision due to a lack of information requested at a previous scrutiny meeting. Specific concerns raised included insufficient detail on electrical infrastructure costs, unclear optimisation biases, potential need for estate re-wiring, questionable qualitative scoring of critical success factors, unconsidered local air quality impacts of construction, the discounting of ambient loop ground source heat pumps despite a positive AECOM report, the exclusion of half-hourly electricity tariffs or promotional offers, the non-provision of financial models for scrutiny, the potential re-consideration of flat-level air source heat pumps, and a lack of analysis on what is genuinely affordable for residents.

Officers responded to these points, explaining that the Cabinet report provided a summary of key findings rather than exhaustive technical detail, which is typical for such reports. They clarified that while some information requests from the previous scrutiny meeting were still being processed, the points raised in the call-in were not all requirements of that committee.

Regarding electrical infrastructure costs, figures for direct electric (DE) options were provided, ranging from £22m-£36m for electrical grid connections, £40m-£43m for in-block electrical infrastructure, and £52m-£63m for in-flat electrical infrastructure. Optimism biases for district heating and direct electric options were also detailed. On the matter of re-wiring, it was stated that while most tenanted properties had received rewiring between 2000 and 2006, additional works would be needed for increased capacity for direct electric systems and to meet the latest electrical safety regulations. Approximately one-third of blocks had their risers and lateral wiring renewed recently, with plans for the remainder. For leaseholder properties, responsibility for electrical installations lies with the leaseholder.

Concerns about qualitative scoring were addressed by explaining that the assessment adhered to HM Treasury's Green Book framework, considering long-term deliverability, operational performance, resilience, and regulatory risk. Electric combi boilers were scored lower on future-proofing and higher on operational risk due to exposure to electricity price volatility and power outage vulnerability, unlike the Cory Group waste-heat option which has localised boilers for backup. The scoring for block-level Ground Source Heat Pump (GSHP) reflected the specific challenges of the Pimlico estates, including the need for over 1,000 boreholes, which would be spatially challenging and create significant geotechnical and drilling risks, unlike a smaller development in Chelsea.

Local air quality impacts of constructing a heat tunnel were not included as these works would span multiple boroughs and are considered Scope 3 carbon emissions, not typically part of building upgrade business cases. Similarly, emissions from electricity generation infrastructure for DE options were not included. Ambient loop GSHP was discounted due to very high indicative capital costs, drilling complexities, potential impacts on underground infrastructure, and limited long-term flexibility.

The exclusion of half-hourly electricity tariffs or promotional offers was explained by the adherence to HM Treasury's Green Book guidance, which uses standardised long-term energy price projections rather than short-term retail offers. These promotional tariffs are not consistently available or suitable for all households.

The absence of detailed financial models in the Cabinet report was due to the fact that these models are developed in the next stage of the Outline Business Case (OBC) process. Flat-level Air Source Heat Pump (ASHP) options were discounted early in the process due to complexity, noise, aesthetic considerations, and the need for significant electrical upgrades. Affordability was assessed at a high level, providing a comparative view of relative affordability across system types, with detailed household-level impacts to be developed at the full OBC stage.

Following extensive discussion and questioning, the committee voted to take no further action, meaning the Cabinet's decision to approve the shortlist of options for the PDHU project will stand.