Heat network customers need action now to protect them from “devastating” unregulated price rises and reliability issues

It is likely that district and communal heat networks won’t be regulated by Ofgem until at least 2024, leaving householders facing another two years of catastrophically high bills whilst the cost-of-living crisis continues. In addition, householders who face issues of intermittent supply of their heating and hot water will remain at the mercy of their provider to find a solution, with no option to seek redress from a regulator.

This news comes after recent supply problems have arisen in Exeter with the E.ON district heat network that supplies the new build town of Cranbrook and surrounding areas. A recent problem has arisen with the valves situated in the heat interface unit within many of the properties served by the network resulting in numerous customers in Exeter being left with no, or very limited, heating and hot water for close to a week.

Dr Catherine Caine, from the University of Exeter Law School, has called on the Government to take action now to help those affected.

Heat networks have the potential to deliver up to 20 per cent of heat to homes in the UK by 2050 and could deliver significant reductions in carbon emissions. However, the sector is currently unregulated which means that the consumers of heat networks can be paying much higher prices for heating systems, which may have also been poorly constructed and which they do not understand. Some bills have risen as high as 700 per cent since April 2022.

There are more than 14,000 heat networks in Great Britain, approximately 2,000 of which are district heat networks and 12,000 are communal heat networks. Combined, these serve around 500,000 households.

Heat networks provide hot water to residential and commercial buildings and remove the need for gas boilers to be installed in individual buildings. Consumers do not receive protection regarding the price that they pay and are often poorly informed about what their heat network is and how it differs from a traditional gas boiler.

Under the Premiership of Boris Johnson, the Energy Bill was introduced in Parliament which, if enacted in law, would appoint Ofgem as the regulator of the sector. Under the Bill, heat network suppliers would be held to a nationally recognised standard when they install and commission their heat network. The Bill also included proposals for consumers to receive clearer information. However, since the recent changes in Government progress on the Energy Bill appears to have been put on hold.

Dr Caine said: “Over summer, progress on the Energy Bill looked very promising, but the half-a-million residents living in homes supplied by heat networks are still supplied by a monopoly that is unregulated – without the ability to switch suppliers. It is very unfortunate that the Energy Bill has been put on hold. The plans for the regulatory framework going through Parliament need to be implemented as soon as possible, and certainly before future systems are constructed so as to ensure these problems do not hinder the positive impact that heat networks can have in the UK.”

“Suppliers have been selling their heat networks to consumers as being ‘greener’ and ‘less expensive’ than traditional gas heating systems. New regulation should ensure heat network operators are only allowed to make such claims if they are correct at the time of writing.”