Why the amendments to the Heat Network Regulations are a serious setback for customers and our planet
Last Friday, with little ceremony, the government laid an amendment to the Heat Network (Metering and Billing) Regulations. The industry has been waiting for these changes for five years but when they finally arrived, it became clear that they undermine the government’s commitment to low carbon heat and the principle that customers should be billed based on the energy they consume.
The regulations include a requirement for operators of existing networks to install customer meters if they’re viable. Unfortunately the test as originally published back in 2014 almost always said meters weren’t viable, no matter what data was fed into it. As a result, the test was suspended and this part of the regulations hasn’t been enforced - until now.
Currently only about a quarter of customers on heat networks are billed based on consumption. The government originally estimated that as a result of this amendment 285,000 additional customers (65% of homes on existing networks) would have a meter installed into their home. However in the accompanying Impact Assessment also published last week, this number had been revised down to just 84,000 - or just 14% of the existing networks.
It’s hard to understand how such a drastic change could have happened between the consultation, and the laying of the amendment.
By watering down these regulations, the government has guaranteed that the huge savings from behaviour change and efficiency improvements will not be realised. Most people on heat networks with unmetered connections will continue to pay a flat fee regardless of how much heat they use, robbing them of control over spending and giving them no incentive to save energy and carbon. Network operators will have no visibility of heat network performance at the dwelling level and (because you can’t improve what you don’t measure) large inefficiencies will remain hidden.
Installing meters is an important step toward greater transparency and better customer outcomes. Installing meters on heat networks has been shown to reduce customer energy consumption by 5-20%, and the data that can be captured from heat meters gives network operators a chance to fix problems that increase costs and carbon over time.
Guru’s real-world monitoring of heat networks over a three year period, delivered in collaboration with the UK Government, showed that the cost of heat and carbon emissions can more than double on a heat network within three years if action is not taken - even when the network has been properly commissioned.
This amendment, and the drop in the expected pass rate for the cost effectiveness assessment tool from 65% to 14%, is worrying because it seems as if policy makers are simply following a path of least resistance.
The Heat Networks Industry Council (of which Guru is a member) has committed that all heat networks will be zero carbon by 2035 - but this change of direction knocks us backwards.
Not only that, but while heat networks are currently unregulated, a regulator (most likely Ofgem) is expected to be in place by 2023, and it’s essential that customers in these homes aren’t left behind when new customer protection regulations are rolled out.
To have waited five years only to see the regulations watered-down beyond recognition is more than disappointing. This is a terrible outcome for customers and the planet.
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Managing Director at CDCE Ltd
4 年This piecemeal approach is not working. District Thermal Energy Systems must be viewed in terms of maximum annual cop or spf and lowest capital cost and highest social benefits only. This means thinking of complete system design. Reality is, gas is probably going to be banned or taxed out of site. Therefore the only way forward is to think very large. Radiators do not work thermodynamically with heat pumps. Heat pumps coupled with Interseasonal Energy Transfer and solar panels are the most efficient solution but only work on a large city wide scale. Massive investment for this means private sector cannot cope.
Technical Lead at Energiesprong UK
4 年Disappointing, but I wonder if this can be done in a different way. I'd like to see every heat network have a decarbonisation strategy within the next 5 years. There are a lot of gas CHP heat networks out there that need taking off gas, and proper billing and metering can be part of that switch to zero carbon heating.
Energy and Low Carbon Capital Project Development and Management, Energy Policy and Consultancy
4 年I'm afraid I disagree, Casey. The previous cost-effectiveness tool ignored all sorts of hidden costs associated with small retrofit projects. Installing meters in isolation means we would have spent several times as much on project management and resident liaison as we would on meters. The old tool was as unrealistic as the proposed 6-month deadline given to heat suppliers to implement changes. I haven't seen the new cost-effectiveness tool but the new regulations appear to introduce a welcome dose of realism on things like project overheads, deadlines and recognise the limited benefit of retrofitting networks where the legal arrangements require flat rate charging even after meters are installed. It also seems more aligned with minimum energy efficiency standards which allows minor works to be delayed where there are planned programmes of larger works. Part L already requires meters be included as part of major retrofits (when it is sensible to incur hundreds of pounds per dwelling on overheads) but we could do with a change of law to make charging by consumption the norm once meters are provided.
Co-founder of Lux Nova Partners Ltd
4 年So disappointing. But perhaps pressure on housing associations / local authorities to address both carbon and cost savings and Heat Trust standards becoming more widespread will lead to existing schemes voluntarily moving to metering?