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Working on a project that tests the commercial viability of a new energy source was among the most appealing factors of Burges Salmon senior associate Lauren Luscombe’s experience working on the Eden Project’s geothermal energy project. That, and she got to meet the clients’ Jack Russell puppies over zoom!

Lauren Luscombe, Burges Salmon
Lauren Luscombe, Burges Salmon

“It is exciting to have led on the development of a first-of-its-kind project in the UK and I hope that geothermal energy will become a unique specialism for me and the wider team, when the commercial viability of geothermal energy is proven”, she says.

Likewise, banking and finance solicitor Luke Addison is keen to see how the financing approach taken will translate into future projects. “We anticipate that this blended financing structure, combining public and private sector finance, will be an increasingly prevalent feature in financing UK energy and infrastructure projects. Seeing how effectively this can work and understanding how to address the interests and concerns of various stakeholders, has been a really informative process”, he says.

“The time spent getting to grips with the technology makes this deal memorable – taking the time to understand the technical and practical aspects of the project, beyond just the legal components of the transaction. For example, the impact ground conditions can have on the drilling timetable, and the difficulty in procuring bespoke drilling components (especially during a pandemic) were all new considerations for me in a financing transaction. The commitment and enthusiasm of the Eden Geothermal and Gravis teams was instrumental in ensuring the transaction progressed”.

Luscombe says the project was unique in several ways, not least in carving out a new sub-sector within the UK energy market and seeking to integrate the expectations of the oil and gas supply chain with that of the renewable energy industry stakeholders.

“The degree of personal investment on the part of the client was self-evident; it had been a journey of over a decade to bring the project to life and it was a real privilege to play a role in making that happen for them. Over the course of the previous two years of advising the client, I have come to feel more like an extension of the team than an external advisor”, she says.

“It is exciting to have led on the development of a first-of-its-kind project in the UK and I hope that geothermal energy will become a unique specialism for me and the wider team, when the commercial viability of geothermal energy is proven.”

Eden Geothermal

Eden Geothermal Ltd was set up by the Eden Project, EGS Energy, and Bestec UK to unlock the geothermal energy deep in the granite beneath Cornwall.

Phase One (already underway) of the Eden Geothermal Project, a 4.5km deep well at the Eden Project, to heat its famous Biomes, greenhouses and offices, is an industrial research project co-funded by the European Union through the European Regional Development Fund, Cornwall Council and Gravis Capital Management. The first well at the Eden Project will be followed by one year of heat production to demonstrate greenhouse gas (GHG) savings.

Having been involved in the project since 2009, Burges Salmon has produced the original revenue contracts and have been long-term legal advisors on the debt financing to the sponsor (GCP Infrastructure Investments Limited) and project company (Eden Geothermal) for this landmark project.

This project was ten years in the making, and is of huge significance to the client. Eden co-founder Sir Tim Smit says that securing funds and thereby the chance to spark an energy revolution amounts to the biggest leap forward for Eden since it opened in a former clay quarry near St Austell in 2001.

A multi-disciplinary energy team capitalised on the firm’s involvement with the project from 2009 and advised the sponsor GCP Infrastructure Investments Limited on its initial investment in the landmark Eden Project Geothermal Plant project in Cornwall. The investment saw Eden Geothermal announce £16.8m funding to enable them to commence drilling of the first well.

Burges Salmon’s appointment meant it advising across a wide variety of transactional issues, including navigating the interface between private investment and public grant funding. The team played a key role in structuring and negotiating bespoke arrangements with government to unlock the public funding for the project.

Continuing its role, the firm became lead advisers across the construction, drilling, procurement, heat and energy contracts. As lead partner, Victoria Allsopp, said: “We were proud to have supported Eden Geothermal reach a key milestone in its ten-year dream last year and we’re equally delighted to have continued to provide wide-ranging and innovative legal advice from our experts across the firm as we reach this next milestone, which has enabled the project to start drilling.”

Allsopp led the project with support from solicitors Luke Addison and Ewan Gadsden, senior associates Lachlan Doyle, Lauren Luscombe and Gregory Nash, and partners Ross Fairley (Energy), Euan Bremner (Real Estate), Jonathan Eves (Corporate) and Lloyd James (Construction & Engineering).

If phase 1 goes well, it paves the way for the second phase. Completing the second phase will mean that Eden will generate sufficient renewable energy to become carbon positive by 2023 as well as aiming to be able to provide heat and power for the local area.

The pioneering project has not been without its unique challenges and the Burges Salmon team worked closely with Gravis and Eden Geothermal to deliver creative solutions across the commercial and legal frameworks, including advising on the interaction with public funding, due diligence, land arrangements, project documentation and construction contracts.

“The majority of the supply chain had a background in the oil and gas industry and was therefore accustomed to a risk allocation that places a substantial degree of risk onto the developer (such developers being traditionally major organisations with commensurate balance sheets). This meant that supply chain expectations departed substantially from a typical risk allocation you might find in the context of a renewable energy project with a smaller scale, grant funded developer. In order to overcome this, we worked closely with the client to understand the technology and its associated risks as well as engaging in open and transparent negotiations with contractors. This ensured we settled on a risk profile which was acceptable to all concerned, taking into account the practicalities of delivering the project, available insurances and what was achievable at a commercially acceptable price”, Luscombe explains.

Luke Addison, Burges Salmon
Luke Addison, Burges Salmon

“There were a number of challenges during the structuring phase of the transaction, particularly relating to the public funding sources being less familiar with the types of financing structures typically seen in a renewables transaction. We had to develop some particularly innovative arrangements to address their sensitivities”, adds Addison.

About Luke Addison and Lauren Luscombe

Addison joined Burges Salmon is 2019, having qualified with Womble Bond Dickinson in 2018. He works on a broad range of banking and finance transactions across multiple sectors, from loan origination to restructuring and turnaround work. A significant component of his work relates to energy and infrastructure project finance, with a particular focus on renewable energy.

Luscombe joined the firm in July 2014, having qualified at Ashfords in September 2013. Her focus since joining the firm has been on energy infrastructure projects, with a particular focus on renewable energy technologies such as green hydrogen, onshore and offshore wind, solar and energy from waste. “It is exciting to have a part to play in a sector which is so integral to the fight against climate change. As a construction and engineering lawyer, I also love any opportunity to get into the nitty gritty of how the technologies work and I am inspired every day by the complex knowledge and engineering which contributes to making projects a success”, she says.

Luscombe’s role on this deal was to advise on procurement strategy, develop standard forms of contract for the supply chain and negotiate these, alongside some more bespoke contracts. “The key contract was the drilling contract, which (among other things) facilitated the delivery of more than 70 lorry loads of equipment from the contractor in Croatia to the site in Cornwall. More recently, I have been involved in helping the client to navigate various project lifecycle matters, including issues relating to the pandemic, Brexit and potential delays”, she explains.

“The Eden Geothermal Project is a pivotal project for geothermal energy in the UK, so it is exciting to be at the forefront of this emerging market. It has been a joy to see the project – the culmination of over a decade of work – come to fruition and to help the client navigate the supply chain procurement process, from the development of the contracts to their day-to-day management.”

Luscombe recalls a new normal emerging over the months that lockdown impacted communications. “Given that I had already been advising the client remotely for a few months when the pandemic began, it had no major detrimental effect on our day-to-day work. In fact, once video meetings became the norm, this created an opportunity to build rapport with the client in a way we might not otherwise have done, meetings previously having taken place via telephone”, she explains.

“I have learned that engagement with colleagues and clients is fundamental to the enjoyment I get from my work, so it is important to find opportunities to engage more frequently with one another, particularly in ways other than by email. Particularly at first, it was easy to take for granted the casual exchanges in the office or pre/post meetings which enable relationships to be established, so it was important to make time for alternatives. This was all the more poignant in the case of this deal, as one of the supporting solicitors joined the firm during the pandemic. Video calling has provided us with an opportunity to get to know one another’s families and home lives in ways which would not have been possible previously; I have found that this has helped me to foster closer working relationships with colleagues and clients and to feel less isolated when working from home.”

About Lauren Luscombe and Luke Addison

Lauren Luscombe
2019-present: Senior associate, Burges Salmon
2014-19: Associate, Burges Salmon
2013-14: Solicitor, Ashfords
2011-13: Trainee solicitor, Ashfords

Luke Addison
2019-present: Solicitor, Burges Salmon
2018-19: Solicitor, Womble Bond Dickinson
2016-18: Trainee solicitor, Womble Bond Dickinson

Who’s Who: the Burges Salmon team

Leading: Victoria Allsopp, energy finance partner

Support from: solicitors Luke Addison and Ewan Gadsden, senior associates Lachlan Doyle, Lauren Luscombe and Gregory Nash, and partners Ross Fairley (energy), Euan Bremner (real estate), Jonathan Eves (corporate) and Lloyd James (construction & engineering).

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