Tender
Chester hospital seeks partner for deep geothermal heat
By Staff Writer | 29-08-2026
The Countess of Chester Hospital NHS Foundation Trust has gone to the market for a development partner to investigate and develop a deep geothermal heat supply for the hospital site. The tender notice, identifier 082373-2026, was published on the United Kingdom tender service at 17:21 on 28 August 2026 and carries an estimated value of 30,000,000 pounds excluding value added tax, and 36,000,000 pounds including it. Tenders close at 17:00 on 9 December 2026.
The trust is buying the development of a heat source, not a completed installation. What it eventually buys, if the development works, is heat.
The trust has already appointed a separate partner for energy generation and use on the site under the Carbon and Energy Fund framework. That partner is required to provide an interface with whoever wins this procurement, which the trust references as Deep Geothermal Solution G1065.
The gateway structure
The procurement is built around staged development rather than a single lump sum commission. The trust expects the successful tenderer to propose a series of development stages or gateways. At the end of every gateway that meets the requirements of the Public Sector Decarbonisation Scheme grant the trust has won, the trust intends to allow the development partner to draw down available grant funding.
The trust states its purpose in that arrangement plainly. It is trying to minimise the development cost risk carried by the development partner, and to minimise the eventual unit cost of heat. Those two aims pull in the same direction here: a partner that is not funding exploration off its own balance sheet has less reason to price exploration risk into the heat tariff.
Deep geothermal development is a sequence of decisions that can each end the project. Structuring the money to follow completed gateways, rather than committing it at the outset, is what allows a public body to start a scheme whose outcome is not known when the contract is signed.
What happens if it works
If the gateways all complete successfully, and there proves to be a commercial opportunity to heat the hospital from geothermal energy, the trust proposes that the parties enter into a long term Energy Services Agreement. That agreement would become active as soon as the geothermal installation is complete and ready to supply heat to the hospital, and would be subject to periodic reviews through its term. The trust gives an estimated review period of seven years.
Under the proposed agreement the energy services provider would own and maintain the installation for the contract term. The trust also contemplates that the provider may choose to enter into offtake agreements with other users, so as to reduce the energy service cost to the hospital. That last point matters commercially. A geothermal resource developed for one hospital site is being set up so that surplus heat can be sold elsewhere, and the benefit of those sales is expressly directed back at the hospital's own unit cost.
The draft Energy Services Agreement is supplied under a non-disclosure agreement as part of the tender pack, which is document 5 in the trust's documentation.
The trust is using a competitive flexible procedure, recorded on the notice as an open procurement method. The requirement sits in a single lot carrying the whole estimated value.
Three award criteria are named. Quality and social value are both quality criteria, and commercial is the cost criterion. The trust explains the arithmetic: quality and social value will be scored on a percentage basis, those scores will be summed, and the commercial weighting will then be applied to calculate the final score. The detail of each criterion is left to the procurement documents.
The wider position
The trust frames the whole exercise as one of the ways it is working to meet its statutory net zero requirements. It has two funding sources in play, the Carbon and Energy Fund framework for the site energy infrastructure and a Public Sector Decarbonisation Scheme grant for the geothermal installation, and it has divided the work so that the two partners have to interface rather than compete.
For contractors and developers, the notice is unusually explicit about where the risk sits and how it is being paid for. The trust has published its intention to release grant money gateway by gateway, its intention to hand ownership and maintenance of the asset to the provider, and its expectation that third party offtake will be used to hold the hospital's own heat price down. Those three positions will shape any bid far more than the 30,000,000 pound headline.