Lambeth Council is set to appoint a replacement contractor to complete a significant non-residential retrofit programme after its previous contractor, Cenergist Limited, went into administration. The £15.7 million project, focused on decarbonising 10 schools and two leisure centres, aims to install low-carbon heating systems, including air source heat pumps, alongside renewable energy technologies and energy efficiency upgrades such as insulation and LED lighting.

Cenergist, a specialist in energy and water efficiency with a reported turnover of £63 million, had completed approximately 90% of the work before entering administration in August. The contractor faced severe financial pressures, including a substantial adverse adjudication ruling requiring it to pay £1.1 million within five days, as well as outstanding debts—one notably involving a supplier owed half a million pounds. These challenges contributed to the company's collapse. Cenergist was the sole trading subsidiary of Eneraqua Technologies plc, a London Stock Exchange AIM-listed company, which has since seen its shares suspended and its listing withdrawn as it moves towards creditors’ voluntary liquidation. In the process, Cenergist’s water division was sold to safeguard jobs and maintain continuity in that sector, but the energy and eco divisions are being wound up.

In the wake of Cenergist’s failure, Lambeth Council is preparing to directly award the remaining retrofit works to GEM Environmental Building Services, an existing supplier experienced in heat monitoring and emergency services for schools and leisure centres within the borough. The council’s decision to bypass a full procurement exercise reflects the complexity and partly completed status of the programme, alongside urgency driven by funding conditions. The Local Authority risks losing up to £10 million in grant funding from the Public Sector Decarbonisation Scheme if the project is not completed swiftly. Meanwhile, running temporary gas boilers across the project sites is costing the council an estimated £5,000 per week.

The outstanding works involve final commissioning steps such as hydraulic balancing, water treatment and flushing, as well as building and electrical work necessary to fully bring the air source heat pumps online. Costs for completing these tasks are estimated between £175,000 and £250,000, though the final figure is still being confirmed by consultants.

The council emphasises the necessity of completing the retrofit programme to meet its low-carbon commitments and financial obligations. GEM Environmental Building Services, with its skilled workforce and established supply chain, is positioned to carry out the specialised mechanical, electrical, and builders’ works across the 12 sites.

This situation underscores the broader challenges faced by companies operating in the green retrofit and energy efficiency sectors, where financial viability can be affected by contract disputes, cash flow constraints, and the pressures of delivering complex, large-scale public projects within tight timelines and budgets. The collapse of Cenergist highlights the risks local authorities face in ambitious decarbonisation efforts, particularly when reliant on single contractors for critical infrastructure upgrades.

A final decision regarding the award to GEM Environmental Building Services is expected imminently, ensuring the borough can complete its decarbonisation works without jeopardising vital government funding or its environmental goals.

📌 Reference Map:

Source: Noah Wire Services