More than 500,000 customers to receive Ofgem protection this week
More than 500,000 customers on heat networks will finally come under Ofgem regulation this week.
The previously unregulated industry involves companies heating multiple buildings from a central heating source; For example, excess heat generated from a data center or factory is transported through pipes to connected properties. It will come under Ofgem’s jurisdiction from 27 January.
The new rules will bring heat network customers in England, Scotland and Wales closer to those living on traditional gas and electricity connections.
Ofgem will have the power to take action if a heat network operator sets prices unfairly or provides poor service, and compensation will be provided to customers who experience outages.
The Department for Energy Security and Net Zero (DESNZ) said homes and businesses on heat networks will face clearer, detailed billing and more support will be provided to vulnerable customers.
Some heat network customers have seen energy price increases of up to 450 percent following the rise in gas prices.
Minister for Energy Consumers, Martin McCluskey, said: “Customers on heating networks have been unprotected for too long, facing unfair price increases and having to deal with hugely inconvenient service disruptions.
“This is simply not good enough – and that’s why from today we’re giving Ofgem new powers to hold heat network suppliers who operate a poor quality service to account and take action.
“Support is already available through the Energy Ombudsman and I would encourage anyone with an ongoing issue with their heat network to contact them and take advantage of these new consumer rights.”
The government has also announced more than £47 million in funding through the Green Heat Network Fund to support the development of four heat network projects at Waterloo and Hounslow in London, Sunderland and Media City in Salford.
The project in Waterloo will take heat from the River Thames to power connected buildings, while the Media City project will get heat from wastewater source heat pumps.
Helena Charlton, director of heat networks at Ofgem, said: “Ofgem is committed to putting consumers first and the launch of heat network regulation marks an important step towards better protection.
“This change means customers will start to benefit from stronger protections around billing, complaints and vulnerable support.
“Heat networks can provide efficient, cost-effective heating, but there are situations where this is not the case. This framework, backed by our oversight, will set important standards that consumers can trust.”
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Bringing heat networks under Ofgem regulation is an important and overdue step.
“These networks are supposed to be able to deliver low-cost energy to some of the poorest households in the country, but for years heat network customers have become second-tier energy consumers facing huge price increases, poor service and little meaningful protection.
“But regulation alone will not solve everything. Ofgem and ministers must now ensure that these powers are used robustly, that vulnerable households are appropriately protected, and that heat networks truly deliver what they promise: affordable, reliable heat that helps tackle fuel poverty, not deepen it.”
