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News 20 January 2022

Ofgem appointed as heat networks regulator for Great Britain

Just before the new year, the UK Government appointed Ofgem as the heat networks regulator for Great Britain, as part of its plan to further expand low carbon heating networks.

Ofgem will set and enforce consumer protection rules across England, Scotland and Wales, regulating both supply and operation functions. It will also monitor compliance and take action where necessary.  

What does this mean for consumers?

The proportion of domestic households and micro-businesses supplied by either a small communal network or large district network is expected to rise from 2% to 18%. However, due to the current energy crisis, and the fact that there is no price cap for heat networks, some households who rely on communal heating and hot water systems are facing steep price increases (some as large as fourfold) as suppliers pass on the huge wholesale price increases unchecked.

As reliance on heat networks increases, it is important to provide support and protection to consumers from volatile market changes through regulation – as is the case with gas and electricity – on pricing, transparency and quality of service. There is also a significant gap in the provision of advice for those who rely on communal heating; it is important that consumers are able to seek independent advice relating to their connection to heat networks and the use of the heat in their homes or businesses.

Commenting on the appointment, Stew Horne, head of policy said: “The appointment of Ofgem as the new heat networks regulator is a welcome step for consumer protection. Heat networks offer an effective heating solution in dense urban areas and can help to reduce energy costs. We expect to see them become more established as an important part of the transition to net zero in the coming years.

“We look forward to working with the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS) and Ofgem to shape the regulatory framework.”

Read more about how heat networks are a low carbon solution for heating homes in the UK.

Last updated: 20 January 2022