Government action urgently needed to protect consumers during the decarbonisation of heating, says Citizens Advice
The lack of a credible plan to decarbonise the way homes and businesses are heated risks failing consumers and undermining public confidence, according to Citizens Advice.
The charity is calling on the government to close gaps in the regulation of decarbonisation innovations such as heat networks.
Heat networks are a significant part of the government’s efforts to reduce carbon. They are distribution systems of insulated pipes that takes heat from a central source and delivers it to a number of buildings.
While just 2% of households currently get their heating and hot water through a heat network, this will rise to an estimated 1 in 20 homes by 2030. By 2050, more than five million homes could be heated in this way.
In a report published today, Citizens Advice sets out the need to regulate heat networks and create a consumer advocate for heat network users. Some of the common problems it helps people with include:
Billing errors - consumers don’t receive regular bills, which can lead to high ‘back-bills’ or incorrect bills
Standing charges - consumers are confused about standing charges and can feel unable to reduce heating costs because of high, and increasing, standing charges.
Lack of information - many people don’t understand how their heat network operates, how their bills are calculated, or where to turn to complain
The charity is warning that, because heat networks are not regulated, many more people risk being exposed to the same issues unless reforms are put in place.
Citizens Advice believes that problems experienced by heat network customers demonstrate the importance of managing the decarbonisation process properly.
Despite the immensity of the challenge, there is no credible UK-wide strategy to achieve the government’s decarbonisation targets - including how consumers will be protected as new innovations are introduced, and where the costs will fall.
With most of the costs to decarbonise the energy system currently paid for through energy bills, Citizens Advice is warning that those on low incomes could end up paying a disproportionate share of that cost.
To address this, the charity is calling on the government to:
Establish an independent commission to determine the fairest way to pay for the energy transition, including the shift to low-carbon heat
Legislate to extend Ofgem’s powers to regulate heat networks and establish an independent consumer advocate for heat networks in the forthcoming Energy White Paper
Consult on a strategy to decarbonise heat, which includes plans to improve energy efficiency of existing and new housing stock.
Gillian Guy, Chief Executive of Citizens Advice, said:
“The way we heat our homes needs to undergo a major transformation. How we manage that process, and fairly distribute the costs, needs the urgent attention of government.
“An independent commission is the only way to make sure the pathway to net zero is assessed in a rigorous, transparent and timely way.
“Consumers must be at the heart of the process, with the right protections built in for them now. The Energy White Paper is the perfect opportunity to fill the regulation gap for heat networks, and set the standard for future innovations.
“We need to get these decisions right now to prevent the bad practice of today becoming the standard practice of tomorrow.”
Notes to editors
Heat networks, sometimes referred to as district heating, take heat from a central source in the form of hot water or steam and direct it to homes and businesses through a series of insulated pipes. This process results in low emissions, so heat networks are considered a low-carbon source of heat.
Last year, the Consumer and Markets Authority (CMA) found that a number of people on privately-owned heat networks were getting poorer deals in terms of price and service quality. It went on to warn there was a risk this problem could grow with the rise of heat networks.
1 in 20 homes on a heat network by 2030 - Sectoral scenarios for the 5th carbon budget, Committee on Climate Change (2015).
Heat network metering and billing regulations: compliance and guidance (December 2014).
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