Heat network customers to be shielded from unfair price hikes
Greater consumer protections introduced for heat network customers across Great Britain for the first time, supporting half a million consumers.
- New protections for homes and businesses on heat networks in England, Scotland, and Wales introduced for first time
- Ofgem appointed regulator and will be able to act on unfair price hikes and poor service
- Clearer, itemised billing and greater support for vulnerable customers
- More than £47 million for four new heat networks across the country
More than 500,000 heat network customers will be shielded from unfair energy price spikes as greater consumer protections are introduced for the first time across Great Britain.
The previously unregulated industry will come under new rules to finally bring heat network customers across England, Scotland and Wales closer in line with people living on traditional gas and electricity connections, with Ofgem installed as regulator.
Ofgem will have powers to act if a heat network operator puts up prices unfairly, and if an operator delivers a poor level of service, with compensation awarded to customers who suffer a service outage through the Energy Ombudsman.
Homes and businesses on heat networks will receive clearer, itemised billing – with previous cases of customers being issued with an unexplained monthly charge – and there will be greater support for vulnerable customers.
Some heat network customers have seen energy prices rises of up to 450% following the increase in gas prices.
Other protections to be introduced include:
- Suppliers required to meet standards of conduct on how they treat consumers, covering customer service, engagement and being transparent and clear when sharing information.
- Consumers will in future be provided with a heat supply agreement, similar to a contract, providing clear terms and conditions and advance notification of any changes to these.
- Vulnerable customers (elderly or those living with health conditions) added to a priority services register so if something goes wrong, they are top of the list to be reconnected.
- Vulnerable customers will also have new protections shielding them from the forced installation of pre-payment meters.
- More transparency about how a customer’s heat network operates and who to contact if they have a complaint or maintenance issue
Minister for Energy Consumers Martin McCluskey said:
For too long customers on heat networks have been unprotected, being hit with unfair price rises and having to manage with hugely inconvenient service outages.
It’s simply not good enough - and that is why from today, we’re giving Ofgem new powers to act and hold heat network suppliers operating a poor-quality service to account.
Support is already available through the Energy Ombudsman, and I would encourage anyone with an ongoing issue with their heat network to get in touch with them and take advantage of these new consumer rights.
Heat networks are a way of heating multiple buildings from a central heating source – such as taking excess heat generated from a data centre or factory – to provide hot water and heating to connected properties through pipes.
The systems provide communities with low-cost and efficient heat and will play a key role in the government’s mission to achieve clean power by 2030.
That is why government is also announcing more than £47 million of funding through the Green Heat Network Fund to support the development of four heat network projects in Waterloo and Hounslow in London, Sunderland, and Media City in Salford.
The project in Waterloo will take heat from the River Thames to supply connected buildings, while the Media City project will take heat from wastewater source heat pumps.
Helena Charlton, Director of Heat Networks at Ofgem, said:
Ofgem is committed to putting consumers first, and the beginning of heat network regulation marks an important step towards better protections.
This change means customers will begin to benefit from stronger protections on billing, complaints, and support for those in vulnerable situations. Heat networks can deliver efficient, cost-effective heating - but there are instances where this is not the case. This framework will set important standards for consumers to rely on, backed up by our oversight.
Gillian Cooper, Director of Energy at Citizens Advice, said:
New protections for people who rely on heat networks are a pivotal moment. For too long, people on heat networks have faced gaps in support and fewer safeguards than households using gas or electricity.
But these changes will start to make a real difference, giving people more accurate billing, better debt support and clearer communication from their provider.
As the official advocate for heat network consumers in England and Wales, Citizens Advice is dedicated to providing tailored support through our specialist advice service. Our priority is clear: heat network consumers must get the same outcomes as other energy consumers, and our advice and representation will work to turn that tide.
Aaron Gould, interm CEO of ADE: Heat Networks, said:
After 15 years of talking about it, the wait is over. Today marks the turning point where consumer protection becomes a reality, derisking the investment we need to build a national clean heat system. Ofgem’s open, collaborative approach shows how far we’ve come. But this is just the start, the real work begins now to turn this framework into affordable, secure and low-carbon heat.