Following a consultation in August last year, the Government has agreed to introduce “long overdue” regulation to the heat network market, which provides multiple buildings with heat from a central source.
From next year, families and businesses in buildings connected to a heat network can apply for compensation should they lose access to heating through the fault of their supplier.
Also, with the new legislation, families will see fairer pricing and “clear and easier to understand” bills. The move is to level the playing field with those with heat networks and households using traditional gas or electricity connections.
Customers deemed to be vulnerable will receive more specified protections too, with focused regulations for retirement homes.
Consumer rights look to help vulnerable customers
The consultation – recommended by the Competition and Markets Authority (CMA) in 2018 – also hopes to minimise the number of vulnerable customers who resort to disconnecting their heating due to the high expense.
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There was no specified date for the regulation to be put in place. But at some stage in 2025, Ofgem will be authorised to intervene when families or businesses have issues, including expensive prices, bad customer service and unreliable connectivity.
If a family has an issue with a heating supplier registered under the Heat Trust, they can make a complaint, but the new legislation should protect customers further.
As well as Ofgem, the Energy Ombudsman will also be able to investigate and resolve complaints made against providers. Further, there will be more investment into buildings that have a heat network.
On top of £32m pumped into the Heat Network Efficiency Scheme, the Department for Energy Security and Net Zero (DESNZ) announced 10 more networks will receive funding. One network can provide heat for up to 1,000 residents.
As it stands, heat networks only provide 3% of the total heat in the UK, but the Government hopes this will rise to 20% in 2050.
‘Vital households receive same protections in energy market’
Lord Callanan, minister for energy efficiency and green finance, said: “Heat networks are expected to support millions of households in the years ahead, as families look to cleaner ways to heat their homes.
“That is why it is vital we ensure customers connected to these heating systems enjoy the same protections as other households in our energy market.”
Cathryn Scott, Ofgem director for enforcement and emerging issues, hailed the announcement as “an important milestone in the journey to regulating” the growing heating market.
Scott added: “We are working with Government to design and deliver a regulatory regime that will be able to deliver improvements for heat network customers. The framework will include consumer protections in the areas of vulnerability, billing and pricing and a route for escalating matters to the ombudsman.”
Related: Half a million households trapped in unregulated heat networks as energy prices soar
