Looking forward to a regulated future…

The heat industry is reaching a new level of maturity. Just recently the Heat Industry Network Council was launched and even as we speak BEIS is working on the development of a regulatory framework. The market now needs certainty – about the rules of demand risk, competition, technical standards, and quality of service – to help encourage investment. This is particularly true now when the UK’s reliance on heat networks to help the drive to zero carbon and the lowering of heating costs is growing exponentially. Regulation, done well, will help deliver the future ongoing success of the market. But what should it look like?

Zero carbon – what needs to be done?

We are delighted to be a part of the Heat Industry Network Council, and to have the opportunity to become one of its founding members. This is an exciting milestone on our journey to transform the way we generate heat and power to meet our energy needs in the UK. Working closely with the Government, and with a future regulator, the industry has a significant contribution to make to achieving zero carbon.

What can we do right now?

One area where progress needs to be made is in improving access to low-carbon sources to power heat networks. There are opportunities to extract more heat from water courses, air, and existing waste-to-heat sources as well as expanding waste heat recovery from industrial processes.

Another avenue to explore is the exploitation of the built-in flexibility of heat networks – existing schemes could be expanded to serve more of the local community. Building owners, for example, could be incentivised to connect to local networks when their heat generating plant needs replacing.

Will regulation be a straitjacket or a springboard for growth?

Obviously, we hope it will be the latter. The current moves to establish a framework to regulate the industry are very welcome. BEIS will be bringing detailed policy options forward later this summer and we look forward to seeing them.

We are keen to see that there is a commitment to ensure that investments to support decarbonisation are economically viable and that the critical barriers to market growth are addressed. In particular, it is vital that the proposed licence-approval framework does not place heavy regulatory burdens on companies and so stifle the growth of heat networks.

Getting things right for customers

Simply encouraging investment in heat networks regardless of quality or efficiency, of course, is not enough. All schemes need to meet minimum technical standards and we think the work undertaken by CIBSE, ADE and industry stakeholders should continue. Good design and optimal operation deliver efficient heating systems to the benefit of both developers and their customers, not to mention the environment.

Here at Metropolitan, we have always believed in the importance of getting things right first time. Heat networks can have a life cycle of more than 50 years and need to be designed and operated with that in mind. It is up to us as the infrastructure providers and operators to make sure that customers receive outstanding customer-service standards. Ensuring this is simple and efficient, will encourage end-user to fully embrace the benefits of living on a heat network, including being a part of the zero-carbon journey, and receiving their heat locally from within their community.

All of our district heat networks are registered with The Heat Trust and we would welcome the continued use of the Trust’s Code of Practice as the basis to protect customers and make sure that they have all the information they need about services and billing.  In fact, I think these minimum performance and quality standards should apply to all heat networks, not just new ones.

This is a critical time for the heat industry. Getting the regulation of the sector right will enable the UK to achieve its ambitious forecasts for the growth of heat networks. Get it wrong, and developers and potential investors will look elsewhere for their heat solutions.