The Heat Network Regulations were introduced (in 2014) in order to implement Energy Efficiency Directive requirements with respect to the supply of distributed heat, cooling and hot water.

The aim of the Directive is to provide incentives to both tenants and landlords to improve heating performance within buildings. In many cases, the current set-up where the landlord's bill is based on percentage floor area or other measures, does not encourage tenants to cut down on heating use. Tenants have no data to show whether changes in behaviour affects heating use, and if they are able to improve their performance - then the benefit is reduced by being shared across all tenants, rather than being felt solely by them. Installing heat meters so that heating is charged based on usage should also drive demand for landlords to provide better controls and other energy saving measures.

Requirements

In force now - the first key section of the regulations requires heat suppliers (who are defined as anyone who supplies and charges for the supply of heating, cooling and/or hot water to customers through a heat network) to inform the Office for Product Safety & Standards (OPSS) (the regulator) of their network every four years (with the first compliance deadline falling on 31^st December 2015).

 Awaiting release – the second main part of the regulations looks to establish which networks will be required to install heat metering devices. This section of the regulation is currently under review, with BEIS setting out the following key proposed changes:

• Introduction of building classes:
  • ‘Viable’ class – heat metering devices must be installed
  • ‘Exempt’ class – heat metering devices not required
  • ‘Open’ class – heat metering required if deemed cost effective
• Updated methodology for the cost-effectiveness tool
  • The tool looks to establish if installing heat metering devices (on final customers’ existing un-metered buildings or spaces) is viable for networks that meet the ‘Open’ class requirements

Points for heat suppliers to consider

• Currently approximately 14,000 networks have been notified to OPSS under the first part of the regulations
  • BEIS estimates that 84% of heat networks that fall into the ‘Open’ class will need to install heat meters or heat cost allocators
• The compliance deadline will depend on the time the amended regulations come into force
• The proposed implementation period will last for 6 months, allowing for one complete summer period (to minimise disruption)
  • For heat suppliers with numerous networks, installation could prove challenging considering the tight timescale
• The data collation associated with an amended cost effectiveness tool covers a range of building characteristics
  • Again, for heat suppliers with numerous networks, this exercise (where data is not easily available) could be time-intensive  
• Billing and billing information will need to be based on consumption for all end users with individual metering devices
• Proposed meter requirements state that all new metering devices should be remotely readable by October 2020
  • Heat suppliers should consider meeting these requirements for any new installs now, in order to mitigate any further upgrades down the line

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