Consultation: Heat Networks – Building a Market Framework

Consultation: Heat Networks – Building a Market Framework

  • 24 Feb 0

Heating is responsible for over a third of the UK’s greenhouse gas emissions. In 2019 the UK Government set a legally binding target to achieve net-zero greenhouse gas emissions by 2050. In order to achieve net-zero carbon emissions by 2050, nearly all heat and cooling in buildings will need to be decarbonised.

Heat networks will play a vital role in the Government’s decarbonisation plan.  Heat networks deliver heating, hot water and cooling from a central source to a variety of different customers including domestic, public sector, retail, offices, and universities. Heat networks are uniquely able to unlock otherwise inaccessible sources of larger scale renewable and recovered heat. In 2013 it was estimated that 38% of London’s heat demand could be met from this kind of waste-heat recovery.

In 2015 the Committee on Climate Change (CCC) estimated that around 18% of all UK heat will need to come from heat networks by 2050 if the UK is to meet its carbon targets cost effectively. Up to £16 billion of capital investment in heat networks is likely to be needed to deliver such growth. Whilst the number of networks is rising there needs to be a significant change in pace of the adoption of heat networks to meet reduction targets.

In England, one important development is the introduction of the Future Homes Standard by 2025, for new build homes to be future-proofed with low carbon heating and high fabric standards. The Government intends to implement the Future Homes Standard through changes to Part L of the Building Regulations. This is a huge opportunity to increase the roll out of heat networks moving away from the traditional individual boiler per domestic property. The change in carbon factors means that developers may focus on direct electric heating, but this comes with significant additional cost for the user. For this reason, the Government is proposing a householder affordability rating is introduced to make it harder for property developers to install direct electric heating where it results in higher costs for consumers.

Currently the majority of heat networks are fueled by gas CHP. However, there is a broad range of low-carbon technology options for networks which the Government wants to encourage developers to utilise. The overall aim is to regulate heat networks to protect consumers and ensure fair pricing, while supporting market growth and the development of low-carbon networks.

This consultation asks for views on:

  • measures to increase levels of investment in the sector, such as provision of market information and support for strengthening local approaches that will help generate additional demand certainty on projects;
  • policy options for establishing a market framework to deliver important consumer protections, equivalent to those offered to gas and electricity customers, as the market expands;
  • proposals relating to the choice of regulator, the regulatory approach, enforcement powers and step-in arrangements;
  • proposals for protecting consumers including on transparency, pricing and quality of service standards;
  • proposals for developing technical standards and certification and accreditation processes to improve the quality, cost and reliability of heat networks;
  • proposals for giving heat networks equivalent rights and powers (such as undertaker or statutory access rights) compared with other utilities; and
  • proposals to drive decarbonisation of heat networks and use of waste-heat sources.

The consultation closes on 1st May 2020. We are formulating our response to the consultation and would welcome your feedback to incorporate into this. To have your say, please email the compliance team at compliance@carbonxgen.com or to discuss this further please call Melanie Kendall-Reid on 01252 87 87 22. 


Leave A Comment


Categories

  Latest Tweets