Up to 900,000 UK families living in heat networks (i.e. receiving energy from a source shared with other buildings) risk facing staggering increases to their energy bills, by 700% in some cases. Beyond the immediate crisis, there are long-standing issues with heat networks. In this briefing, Will Damazer sets out an ambitious plan to overhaul the heat network system and secure a fairer deal for all those living in them.
- 1 in 25 households is part of a heat network, and in 1 in 12 in social housing.
- Heat networks have been treated as business-to-business sales, and so members have not as much protection as other households:
- In some cases, bills have increased 700%
- This has hit the worst-off particularly hard – one pensioner in Lambeth who saw their heating and hot water bill increase from £700 to £3,500.
- Existing heat networks face three challenges:
- Poor energy efficiency and high maintenance costs
- Most networks are not metered, leading to excessive energy use and unnecessary costs
- A lack of regulatory protection from Ofgem, with heat networks currently in line with housing service charges
- In order to secure a fairer deal for heat networks, the Government should:
- Improve the bill support scheme, with more generous help, pegged to domestic energy prices, targeted help for schemes in deficit, and a cap on service charges
- Accelerate the transition to metered networks, removing exemptions, increasing grant funding, and encouraging the uptake of support
- Improve regulation, with a target for Ofgem to start regulation by April 2024, and incentives for heat networks to improve efficiency
- Dismantle old networks, mandating operators to run feasibility studies and providing funding for households in dismantled networks to transition to heat pumps.