Free guide explains proposed regulatory changes for heat network industry

Thursday 23rd November 2018 |

Switch2 Energy has published a guide to the Competitions and Markets Authority (CMA) market study into heat networks, which signals big changes ahead for the community and district heating industry.

The most significant CMA proposal is to appoint Ofgem to regulate the heat network market. This would provide the same level of consumer protection to heat network customers as those of the gas and electricity sectors. It would help enforce consistently high performance and customer service standards across all UK district and community heating schemes.

While the CMA report acknowledges that the majority of heat network customers are getting a good deal and have the same satisfaction levels as non-heat network customers, it highlights recommended areas of improvement. These apply to some private housing projects.

The Switch2 guide summarises the CMA’s three key concerns, which relate to standards and costs of design, build and operation; customer transparency, and monopoly of supply.

The CMA’s proposed areas of regulation would seek to provide:

  1. Stronger customer protection, with access to an Ombudsman for all heat network customers, not just those schemes registered with the Heat Trust.
  2. Improved quality and reliability of heat schemes via better design and build standards.
  3. New technical standards, building on the existing CIBSE/ADE Code of Practice to ensure measurable performance outcomes, such as operational efficiency.
  4. Mandatory rules and criteria for suppliers around price and quality of long-term customer contracts.
  5. Improved transparency via better customer information, clearer and more detailed bills, and heat supply agreements and contracts between customers and heat network operators that are simple to understand.

Welcoming the CMA’s call for heat network regulation, Ian Allan, Head of R&D for Switch2 Energy, said: “Regulation will ensure that the existing high customer service and network performance standards that we have committed to through the CIBSE/ADE code of practice and via The Heat Trust will be reinforced across all heat networks. This will embed best practice across the entire sector and help the UK to deliver a more affordable and sustainable heat supply for the future.”

The CMA is expected to make further announcements on its call for industry regulation by the end of the year.

Read the Switch2 Energy guide to the Competitions and Markets Authority (CMA) market study.