‘Nearly half a million homes on heat networks could be hit hard by gas prices’

The Heat Trust has urged the government to allow heat network operators to buy gas at the capped domestic tariff rates

The government has been urged today to take urgent action to protect around half a million homes living on communal and district heating networks.

The Heat Trust suggests these homes could be hit hardest by the soaring gas prices because heat networks operators purchase gas on the commercial rather than domestic markets.

Commercial gas prices are currently around four times pre-crisis levels. The Heat Trust said commercial gas saw a 1000% price increase last year, rising from 1.5p per unit to 15p per unit before Christmas.

The report notes that consumers and landlords operating heat networks are already reporting examples of price rises of up to 700%.

The authors of the report called for the government to intervene by allowing heat network operators to purchase gas at the capped domestic tariff rates.

Stephen Knight, Director of Heat Trust, said: The government is fully committed to making heat networks a key part of its energy policy, and must not leave families living on these schemes behind.

Heat networks have the potential to offer low-cost, low-carbon heat, but without intervention hundreds of thousands of families are facing horrendous and unaffordable heating bills this winter.”

Lily Frencham, Chief Executive Officer of the Association for Decentralised Energy, commented: “The current crisis is an energy-wide issue and is facing all energy utilities, regardless of whether they supply through gas, electricity or heat networks.

“This said, the historically limited size of the heat networks market in the UK, which currently provides just over 2% of heating demand, means that it has not been regulated to the same extent as the other energy markets.

“Heat networks are often characterised as non-domestic consumers within the broader energy system, despite frequently directly supplying many domestic customers.

“It is essential that any intervention recognises this quirk in the system and can still reliably reach domestic customers on heat networks, just like existing protections support domestic customers on gas and electricity.”

A BEIS spokesperson told ELN: “Higher energy bills are never welcome and any customer worried about bills should contact their supplier to access available support.

“Ofgem’s remit does not currently include regulating heat networks, however, the government has set out proposals to regulate the sector, including appointing Ofgem the regulator for heat networks.

“This will ensure heat network customers, especially those in vulnerable circumstances, receive a fair price and reliable supply of heat for their homes as we make the transition to net zero.”

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