The Heat Network Regulations aim to improve the quality of service being provided by heat suppliers. As such, they will require heat suppliers to install final customer meters, and to bill final customers based on actual supply, where technically and economically feasible. So why has the UK government implemented this policy and is it likely to have a beneficial impact?
Well first and foremost, decarbonising heat has been an area of policy neglected to date. Whilst the UK continues to make good progress on increasing the proportion of low carbon electricity in the grid over the past few decades, the same focus has not been placed on heat. With heat accounting for 48% of UK energy use and 1/3 of total carbon emissions, this is an area that has to be addressed if the UK is to meet renewable generation and decarbonisation targets. The need for change, and the numerous benefits of doing so, were eloquently explained by my colleague, Helen Troup, in her article published here.
So we know we need to decarbonise heat, but is improving metering an effective way of achieving that? Well, the short answer is yes. A 2006 Defra study analysing domestic energy use concluded that “accurate billing (a form of indirect feedback) is needed as a basis for sustained demand reduction”, with savings observed varying from 0-10%. This isn’t a recent revelation – studies dating back as far as the 1970’s show that effective feedback can reduce energy consumption.
Anecdotally, we encounter this challenge on a regular basis in our work. For example, where final customers receive estimated bills based on the floor area they occupy or historic meter reads, rather than the actual energy they consume, we often see a reduced uptake in energy saving measures and behaviours. The most common reason for this is that because the financial savings aren’t passed on to the end user, there is no financial incentive to act.
Which brings us to the last point – installing final customer meters allows tenants to reduce the cost of running their home, something of particular help to low income or vulnerable tenants. Studies suggest that energy bills are still the biggest concern to UK households. Latest figures from the UK governments 2016 Fuel Poverty Report suggest that nearly 11% of households are now in fuel poverty, with fuel prices increasing more than energy efficiency gains. It’s our view therefore that the Heat Network Regulations offer housing associations a real opportunity to:
- Improve the quality of service they offer tenants
- Reduce tenant’s energy bills, pulling many out of fuel poverty
- Improve SAP ratings of their properties (heat meters can increase SAP ratings by 4 points)
- Move ahead of the curve and pre-empt future legislative requirements
To learn more about the heat networks regulations and what you need to do to comply, please get a copy of our guide here.