Heat networks: building a market framework
Download the full outcome
Detail of outcome
We will continue to engage with industry and consumer groups as we advance the policy and issues emerge. A new industry-led advisory board will enable stakeholders to work with BEIS, Ofgem, the Energy Ombudsman, and Citizens Advice during the next phase of designing and implementing regulation. We will consult further on our policy proposals for secondary legislation.
We have published a consultation on recovering the costs of heat networks regulation (closing 16 February 2022) alongside this government response. Your responses will inform our policy development on cost recovery.
Following the policy development phase, we will introduce legislation when parliamentary time allows. As set out in the February 2020 consultation, there may be grounds for transition arrangements for some aspects of the Market Framework. We will inform industry of the proposed nature and duration of those arrangements, and provide further opportunity for you to provide views.
Please continue to follow existing good practice, such as that set out by the Heat Trust and the ADE-CIBSE Code of Practice.
Detail of feedback received
We received 118 responses to the consultation. A diverse range of groups provided their views, with respondents consisting of:
- 11 consultancies
- one developer
- 8 energy companies
- 21 energy service companies (ESCOs)
- one financial investor
- 23 individuals
- one public institution
- 5 local authorities
- 4 metering companies
- 11 other businesses
- 16 organisations representing consumers
- 2 think tanks
- 10 trade associations
- 4 other organisations
Original consultation
Consultation description
In order to achieve net-zero carbon emissions by 2050, nearly all heat in buildings will need to be decarbonised. Heat networks are a crucial aspect of the path towards decarbonising heat.
In this consultation, we are seeking views on policy options for regulating heat networks to protect consumers and ensure fair pricing, while supporting market growth and the development of low-carbon networks.
This consultation sets out:
- measures to increase levels of investment in the sector, such as provision of market information and support for strengthening local approaches that will help generate additional demand certainty on projects
- policy options for establishing a market framework to deliver important consumer protections, equivalent to those offered to gas and electricity customers, as the market expands
- proposals relating to the choice of regulator, the regulatory approach, enforcement powers and step-in arrangements
- proposals for protecting consumers including on transparency, pricing and quality of service standards
- proposals for developing technical standards and certification and accreditation processes to improve the quality, cost and reliability of heat networks
- proposals for giving heat networks equivalent rights and powers (such as undertaker or statutory access rights) compared with other utilities
- proposals to drive decarbonisation of heat networks and use of waste-heat sources
We have also published:
- an impact assessment – providing indicative costs of each regulatory option considered
- the International review of heat networks market frameworks – commissioned by BEIS from CAG consultants - an important resource to understand how other countries have approached heat network regulation
Extension to consultation end date
In the light of COVID-19, we have extended the consultation period to give people more time to respond.
Documents
Last updated 29 December 2021 + show all updates
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Government response published.
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In the light of COVID-19, we have extended the consultation period to give people more time to respond.
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First published.