Approximately 500,000 homes across the UK are currently heated by communal heat networks, a figure projected to rise significantly to 2.5 million by 2030. These networks, which supply heat and hot water to multiple properties from a central source, operate differently from traditional individual gas or electricity connections, often leaving consumers with fewer protections and less recourse for complaints. Money Saving Expert has highlighted the critical need for consumers to understand their rights and the impending changes to regulation in this evolving sector.
Unlike customers with individual gas or electricity meters, those on heat networks have historically lacked the robust consumer protections offered by energy regulators. This has led to concerns about opaque billing, high charges, and limited options for switching providers or seeking redress for poor service. The Government, recognising these issues and the growing role of heat networks in decarbonising the UK's heating supply, is set to introduce new regulations.
From 2025, heat networks will fall under the regulatory oversight of Ofgem, the energy regulator. This move is designed to bring heat network customers protections broadly equivalent to those enjoyed by gas and electricity consumers. It is anticipated to introduce greater transparency around pricing, improve service standards, and provide a formal complaints and redress mechanism through the Energy Ombudsman. Until then, the Heat Trust, an independent consumer protection scheme, offers some voluntary protections and a dispute resolution service for customers of participating providers.
The expansion of heat networks is a key component of the Government's strategy to meet its net-zero emissions targets. The Department for Energy Security and Net Zero aims for 20% of UK heat to be supplied by heat networks by 2050, seeing them as an efficient and low-carbon heating solution, particularly in urban areas. This ambition underscores the importance of effective regulation to ensure that this transition benefits consumers and avoids creating a new set of energy poverty challenges.
However, the transition to full regulation presents challenges. Existing networks, some of which have been operational for many years, will need to adapt to new standards and reporting requirements. Consumers on these networks may continue to experience issues until the full regulatory framework is in place and effectively enforced. The forthcoming changes are expected to empower customers with more information and greater ability to challenge unfair practices or excessive charges.
The Labour Party has previously called for stronger consumer protections in the energy market, including for those on heat networks, emphasising the need for fair pricing and reliable service. They have highlighted the cost-of-living crisis and the impact of energy bills on households, suggesting that robust regulation is essential to prevent exploitation in emerging energy markets.
Source: Money Saving Expert