Heat Network (Metering and Billing) – Proposed Changes to the Regulations

December 10, 2019 | Insights

Who Do These Changes Affect?

  • Approximately 14,000 heat network operators
  • An estimated 287,000 unmetered dwellings and units
  • An estimated 16,000 additional customers who do not receive heat billing information

The Department for Business, Energy & Industrial Strategy (BEIS) recently proposed amendments to the Heat Network (Metering and Billing) Regulations (HNMBR), affecting at least 14,000 heat networks in the UK. With responses required to BEIS by January 2020, we look at some of the key considerations and the opportunities for organisations to influence the regulations.

In 2014, BEIS published the HNMBR as part of the UK’s response to the EU Energy Efficiency Directive (EED). The regulations aim to drive energy efficiency and transparency within heat networks, ensuring that customers can monitor their energy usage and are provided with competitively priced energy.

The first part of the regulations requires those that supply and charge for heating, cooling or hot water through a communal or district heat network (heat suppliers), to notify BEIS of their network every four years.

What Do the Proposed Changes Include?

BEIS has now completed a consultation on an amendment to the regulations. The amendment will decide which networks are required to install heat meters or heat cost allocators, and those exempt from installing these measures.

The proposed changes will separate heat networks into three categories:

  • Those who must install (Viable class)
  • Those who do not need to install (Exempt class)
  • Those who must complete a tool to assess the financial viability of installing the measures (Open class).

Under the current proposal, the BEIS estimates that 65 percent of heat networks that complete the cost-effectiveness tool will be required to install heat meters, and a further 19 percent of those remaining will be required to install heat cost allocators. Those required to install will also be responsible for providing billing to the end customer, with accurate details of their energy use.

Who Do These Changes Affect?

  • Approximately 14,000 heat network operators who will need to assess whether they are required to install.
  • An estimated 287,000 dwellings and units that are connected to heat networks but are unmetered, which will require heat meters or cost allocators by 2024.
  • An estimated 16,000 additional customers who are metered but currently do not receive billing information for their heat usage, who will now require this information.

What Does This Mean for Owners?

Some of the key considerations for our clients include:

  • Timings

The proposed time that business will have to implement the recommended heat allocators is six months (including one summer period). For clients with multiple networks, sometimes into the hundreds, this may not be sufficient for the budgeting, procurement and delivery of the required changes.

  • The cost of implementing measures

Accurate installation fees are needed to shape the financial viability tool, which will determine which networks must install. If you have examples of quotes provided for the installation of heat meters or heat cost allocators, it would be advisable to provide these figures to BEIS.

  • Technically viability

BEIS is asking for feedback on any additional technical reasons that a property should be included in the exempt class. Responses here may prevent owners from having to complete the financial viability tool where it is not technically viable to install.

  • The financial viability tool

To assess the financial viability of installing, owners must provide the following details for each of their networks:

  –  External wall, floor and roof construction types. Confirm archetypes and numbers of units per building.

  –  Average floor space, ceiling height and glazing type.

  –  Numbers of dwellings with external building walls, floor or roof.

  –  The presence of heating controls and numbers of radiators per dwelling.

Those who do not have this information readily available will need to consider the timings and costs of collecting the data.

  • Remotely readable metering

The EED requires new metering devices to be remotely readable by October 2020.  Whilst this is currently under consultation, owners should consider building this into their specification when installing heat meters to prevent further upgrades being required later in 2020.

  • The impact on social housing.

There is a specific question in the proposal that relates to the impact the regulations will have on social housing. One consideration is whether requiring social housing providers to install heat meters could affect how residents are charged for billing, potentially increasing the risk of fuel poverty from increases in bills or underheating to prevent bills.

There are also potential implications for housing providers where heat is included in the service charge. In the new scenario, following installation of the meter or cost allocator the resident is billed for their exact usage, so housing providers may need to alter the service charge levels to separate the heating element.

What Is Anthesis Doing?

We have recently submitted our own response to the HNMBR consultation, including feedback from our clients. We will use responses to develop a metering solution to support you with the implementation stage of these regulations.

Responses to the consultation are now closed. We will update this information when the final regulations are released by BEIS.

Pete Best
Senior Associate

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