A year ago Luigi had the privilege of introducing heat networks for the first time at SuperReturn. In that presentation, we highlighted some of the key features of this attractive asset class:

  • It is a well-understood, mainstream technology. District heating involves distributing heat to residential and commercial units through insulated pipes carrying hot water from centralized sources. The system has been used for decades, especially in Nordic countries for example in Sweden where it supplies more than 60% of heat demand.
  • It is at the core of the energy transition. Heat networks can use sustainable sources of energy such as geothermal, heat pumps, waste heat or biomass. Building a sustainably-fuelled network is the most cost effective way of decarbonizing heat in high demand urban settings.
  • Its risk/reward profile combines elements of infrastructure and private equity. Taking an investment decision to build a new network involves forecasting expected customer pick-up, as only a minority of customers are willing to sign up an offtake before a network is operational; sales and operations management are also more complex than for most infrastructure assets. However, once a network is built and customers are connected, the asset classifies as core infrastructure since it delivers an essential service, is fully contracted and has a very long useful life.

Since that update, the market has moved even further along these trendlines. In September 2021 Luigi gave the SUperReturn investor community an update on the market – available in the link on this page.

Governments in several European countries have confirmed commitments to decarbonizing the heat sector and promote the development and construction of heat networks. These include initiatives at the EU level (Fit for 55), the Netherlands (working on a new Heat Law), the UK and Switzerland.

These initiatives are all part of a much broader trend in the energy sector towards electrification, since fundamentals of heat networks strongly support replacing fossil fuels with sources such as heat pumps or geothermal. This will require however some regulatory changes, as for example in the UK electricity and gas are not on a level play field when it comes to CO2 taxation: electricity is still heavily taxed even though its CO2 footprint has dropped by 70% in a decade.

Industrial and financial players have taken notice of these trends: utilities such as Engie, Vattenfall, Fortum and E.ON are all actively investing in district heating, dedicating substantial resources and generally increasing their commitment levels to the sector.

Financial players have also entered the field, and over the last decade we have seen several institutional investors acquire district heating assets -especially in Northern Europe- with the average size and valuation multiples increasing as the asset’s classification as “core infrastructure” took hold.

Looking ahead, we expect to see the sector grow with more countries launching new initiatives to promote investments. In our view the most successful ones are likely to be those willing to put in place clear, binding decarbonization targets at the municipal level and to level the playing field with gas.

Overall, we expect electrification to gradually take hold, as the economic case for heat pumps strengthens as the housing stock becomes more efficient and renewables-fuelled electricity becomes cleaner and cheaper.

We expect the roles of municipal stakeholders to be very important, with project co-ownership/sponsorship to play important roles in new schemes.

We will see smarter, cleaner and more efficient 4th and 5th generation networks take over, starting with new build residential and gradually expanding from there.

And finally, we expect to see more financial investors enter the space, both institutional/direct investors and active investment managers, as the sector will gradually evolve from being a niche towards becoming a mainstream part of our sustainable urban infrastructure.



Please get in touch at

Luigi Pettinicchio

Chief Executive Officer


Luigi co-founded Asper in 2016 with Emma and Luis, with whom he had worked at HgCapital since 2008. 

Luigi has more than 15 years of experience in energy and investing.  At Asper, he is responsible for investment execution across all platforms, the organization and the overall management of the firm. Over the years Luigi led a number of investments, financings and exits in different markets and technologies across the UK, France, Spain and Scandinavia. He sits on the Investment Committee, Platform Management Committee, Sustainability and Risk and Compliance Committees.

Prior to joining Hg/Asper, Luigi worked for Goldman Sachs’ investment banking division in London and for McKinsey & Company in Milan.

He holds a “cum laude” double degree in engineering from Milan’s Politecnico and Paris’ Ecole Centrale, and a MBA with High Distinction from Harvard Business School.