The government have set ambitious targets to increase the amount of heat provided by heat networks from 2% to 20% by 2050.
This is a significant increase as heat networks are not currently regulated and considered to have monopolistic traits that are not always in the best interest of the customer.
New regulations are designed to bring heat networks in line with other utilities. Owners of heat networks need to ensure that they comply with the Heat Network Technical Assurance Scheme (HNTAS).
HNTAS is already putting pressure on heat network owners. You must ensure that your heat networks are well maintained. While it’s only guidance for now, there will be penalties starting (most likely) in 2025.
As a heat network manager, or the owner of a building, you will become the regulated party. This means that you’ll be responsible for complying with duties related to reporting on and operating in your heat network. You will need to provide efficiency information and details on how energy tariffs are calculated in your network.
Who needs to prepare for new Heat Network Regulations?
Both building owners and heat network owners need to prioritise the maintenance and governance of their heat network(s).
You will likely be legally responsible when new regulations come into force. If you start preparing now, you’ll protect your interests and help to proactively reduce operating costs.
While we don’t know exactly what penalties will be, we expect that there will be some significant fines – can you afford to wait?
What do you need to do to prepare for Heat Network Regulations?
If you’re responsible for a heat network, it’s important to assess where your network is at right now.
Imagine regulations came into force tomorrow. Are you operating at an efficiency that will meet Ofgem’s standards?
If you’re unsure, then it’s really important that you take proactive steps to prepare. Now is a great time to assess the performance of your heat network.
Do note: you can apply for funding under the Heat Network Efficiency Scheme (HNES), which is designed to support performance improvements to existing district heating or communal heating projects.
5 Steps to take now to prepare for Heat Network Regulations
1. Assess your current heat network performance
A thorough audit of your current systems will help you develop a good understanding of where you currently are. Your audit should cover:
- Energy efficiency – Assess the efficiency of heat generation and distribution
- Customer service – Evaluate your billing processes, customer service practices, and reliability of supply
- Quality of service - Availability
- Safety – Review safety protocols and procedures
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2. Partner with a heat network specialist
There is no reason that you should go through this process alone. We recommend getting in touch with heat network specialists – a team of experts who can identify key areas of concern and help you to improve well in advance of regulations.
3. Apply for grant from Heat Network Efficiency Scheme
As mentioned, you should apply for Round 7 of HNES.
Revenue grants are available to fund an optimisation study into heat networks. Round 7 is open until the 26th July 2024, however further rounds are expected in 2024 and into 2025.
4. Start Improvements now
Whether it’s improvements to your plant room operation, reviewing metering process, or improving your pipe insulation, there are many interventions we can make to help boost your heat network’s efficiency.
5. Plan for long-term upgrades
Begin to implement longer term upgrades to your heat network efficiency. This might include:
- Using advanced metering infrastructure (AMI) to collect detailed data on system performance.
- Developing a schedule for regular reporting to Ofgem, ensuring all required data is accurately and promptly submitted.
- Establishing benchmarks for performance.
- Investing in training, development and certification.
- Implementing clear, itemised billing systems that can help your customers understand their charges.
- Modernising your heat sources, investing in cleaner heat sources such as combined heat and power (CHP) plants, or renewable energy such as biomass or solar.
- Install smart technologies to better monitor and manage your heat network.
You might not need to do all of the above, however, it's important that you properly assess where you're at and what needs to be done before regulations are here.
We understand that, as a heat network owner, this is a stressful time. Don’t worry – you’re not alone. Our specialist team at Communal Energy Partners are here to help ease the transition. We can help you undertake a complete optimisation survey of your heat network.
We’ll identify what interventions are needed, and what areas you’re already compliant in.
If you’d like help with funding, we can support. Trust us to handle the entire process; it’s our job to take the stress away from you, ensuring that, when regulations arrive, you’re fully compliant and not subject to any fines or penalties.
Get in touch today. We’ll learn about your network(s) and advise on logical next steps.
Talk to our specialists
Not sure what to do next? Don't worry - we're here to help. Get in touch with our friendly heat network specialists. We're here to provide no-obligation advice on how best to prepare for the new Heat Network Regulations.
