Campaigners call for ‘rescue plan’ for failing heat networks

Fuel Poverty Action has called for an “industry-wide rescue plan” to save consumers connected to failing district heating schemes.

The plea comes after the Heat Network Task Force published a new report urging the government to introduce new regulations to protect both consumers and investors.

The report proposed a new regulatory framework based around “demand assurance”, compensating developers if the heat demand expected once a project was built failed to materialise. In return, they would need to meet minimum standards, including on customer service and build quality.

However, the framework would only apply to future projects and offer no protection to customers of existing schemes.

While a nationwide survey published by the Department for Business, Energy and Industrial Strategy in December found three-quarters of heat network customers were satisfied with their heating, Fuel Poverty Action said although many of the 17,000 UK heat networks were functioning well, thousands of customers’ lives had been made a “misery” by “dysfunctional and unaffordable heating”. It argued the industry as a whole should bear collective responsibility for bringing all existing networks up to standard.

Spokesperson Ruth London said: “Experience has shown that with expert intervention tariffs can be halved and reliability greatly improved.

“An industry-wide rescue plan for failing schemes would provide the consistency and certainty that the [task force] says is essential for industry growth.  It would also ensure that the human guinea pigs in failed district heating experiments get the redress they so desperately need, to keep warm.”

The Heat Network Task Force was established and led by the Association for Decentralised Energy (ADE). But Fuel Poverty Action said some district heating customers, despite trying, were unable to take part.

The task force report called for a “supplier of last resort” process for heat networks to ensure supplies are maintained in the event that an operator goes bust.  Fuel Poverty Action said its only recommendation for existing schemes was for a regulator to “eventually widen the scope” to cover all heat networks. These protections should instead be implemented immediately, it said, and a supplier of last resort appointed not just if a network fails to meet its financial obligations but also if it fails to provide an adequate service.

Responding to the criticisms, ADE director Tim Rotheray said the report represented a significant effort by many stakeholders across the sector and the first time the industry has compiled a set of proposals and principles around the role of heat networks in a decarbonising economy.

He said the stakeholders had included consumer groups, developers and suppliers, as well as observers from the UK and Scottish governments, the Competition and Markets Authority and Ofgem.

Rotheray continued: “The task force was convened to focus on the future heat network market but the industry is actively working to address issues arising on some existing heat networks including establishing the Heat Trust customer protection scheme and the code of practice for heat networks.

“The ADE also wanted to ensure that future heat networks can be invested in and built and operated to a high standard – that is why taking forward the task force’s recommendations is important.”