Ofgem and DESNZ are jointly consulting on implementing consumer protections for heat networks in Great Britain. The consultation paper outlines proposals to regulate the heat network sector, aiming to provide consumers with protections similar to those in the gas and electricity markets.

The full consultation paper can be found here.

Key points of the Consumer Protection proposals include:

  1. Consumer Protections: Proposals for price regulation, formal complaints procedures, guaranteed standards of performance, and continuity of supply measures.
     
  2. Regulatory Framework: Establishing Ofgem as the regulator, the Energy Ombudsman for redress, and Citizens Advice and Consumer Scotland for advocacy.
     
  3. Segmentation: Different approaches for various types of heat networks, including large, small, and not-for-profit networks.
     
  4. Financial Responsibility: Requirements for heat networks to manage finances responsibly and have continuity plans.
     
  5. Step-In Measures: Hierarchy of interventions to ensure continued supply in case of network failure, including contractual step-in arrangements, Last Resort Directions, and a Special Administration Regime.
     
  6. Billing and Transparency: Proposals for clear and accurate billing, unbundling heat charges from other service charges, and limiting back-billing to 12 months.
     
  7. Vulnerability Protections: Adopting Ofgem’s definition of vulnerability and introducing targeted protections for vulnerable consumers.
     
  8. Timelines: Consumer protections to commence from April 2025, with full regulatory regime starting January 2026.

The consultation closes on 31 January 2025 and the SFHA is keen to hear the views of members (particularly those who operate heat networks) to inform our response.

There are some questions at the end of the briefing - available to the right-hand side of this article - and it would be particularly helpful to understand members’ views on these points.

If you have any thoughts or experiences that you would like to share, please contact Gillian Campbell at gillian@campbellconsulting.scot by 15 January 2025.