Updated: Competition and Markets Authority’s heat network market study launched.
The Heat Network (Metering and Billing) Regulations 2014 implement the requirements in the Energy Efficiency Directive with respect to the supply of distributed heat, cooling and hot water.
The Energy Efficiency Directive promotes energy efficiency in the EU by laying down rules to overcome challenges in the supply and use of energy.
To understand whether or not you are affected by the regulations, Regulatory Delivery (RD) has developed a guidance document to help define what is and isn’t in scope.
Timetable for compliance
The following are dates where the regulation states that requirements need to be met:
- from 18 December 2014 the fitting of building level meters on multi-occupancy buildings, where more than one final customer is charged for the heat supplied, is required
- from 18 December 2014 meters must be fitted for any district heating connection to a newly constructed building or where a major renovation of building on a district heating network
- from 31 December 2014 heat suppliers must meet the billing requirements or for new builds from when the network commences operation
- from 31 December 2015 the notification for new build systems must be made on or before it commences operation
- the date from which final customer meters must be fitted subject to cost-effective tests will be detailed in the amended regulations planned for 2018 (see below)
Cost effectiveness tests and plan for amended regulations
The cost effectiveness tool is currently being revised by the department for Business, Energy and Industrial Strategy (BEIS). Therefore, pending the revision of the tool it is advised that no further assessments should be undertaken.
The remaining requirements in the regulations are unaffected (for example in relation to building-level meters and newly constructed buildings connected to a district heating network and those buildings on district heating networks that undergo a major renovation).
BEIS is working towards launching a public consultation in early 2018 on a revised methodology for assessing the cost effectiveness of metering for district and communal heat networks. Accordingly, RD will take a pragmatic approach for any non-compliance with this requirement until a new tool and re-testing date is in place. The consultation will also seek views on some additional areas where the regulations could benefit from clarification following the first two years of implementation.
The Financial Conduct Authority (FCA) has confirmed that it would not be appropriate for them (the FCA) to impose fines or other disciplinary measures in respect of a breach of the requirement within the heat network (metering and billing) regulations 2014 (as amended), that certain heat suppliers must test whether it is cost-effective to fit heat meters in multi-occupancy buildings, and where appropriate, fit them by 31 December 2016.
Furthermore, it is unlikely that the FCA would take other regulatory action (where a heat supplier was separately regulated by the FCA) if the only non-compliance was in relation to the requirement to test for and fit meters where cost effective. As such, it is not considered necessary for a heat supplier to inform the FCA if it has been unable to meet this requirement.
Following the planned public consultation, BEIS intend to launch the new cost effectiveness tool and accompanying regulatory amendments later in 2018.
Frequently asked questions
RD receives a large number of enquiries relating to the heat network (metering and billing) regulations 2014 and has summarised some of the most common in the following document.
If you are a supplier of heat, cooling, and/or hot water you must notify RD using the single or the multiple notification template below, whichever is more appropriate.
Heat suppliers should use the process below to notify RD of their network(s)
The single network notification template is designed for one network per form. We recommend you complete this form if you have a small number of networks or you are assessing your networks individually. Please complete one form per network.
The multiple networks notification template is designed if you have several networks and will be collecting and collating the data in bulk.
Unless otherwise indicated, every box should be completed.
The Heat Metering and Billing Regulations 2014 Notification Data
The Heat Metering and Billing Regulations 2014 require heat suppliers to notify the Secretary of State if they have an existing heat network.
As of November 2016, notifications representing around 17,000 networks have been collected under the requirement. This includes both district heating systems and communal heating. The summary tables provide data on the number of networks reported with a country split, number of final customers by location and building type, heating capacity (kW), generation (kWh) and supplied (kWh) by country for networks that have been quality assured and cooling capacity (kW), generation (kWh) and supplied (kWh) in the UK for networks that have been quality assured.
On 7 December 2017 the Competition and Markets Authority (CMA) issued a mandatory notice under section 174 of the Enterprise Act 2002 to BEIS. This requires BEIS to produce data relating to heat network notifications to the CMA, to support a market study by the CMA into the heat networks sector. On this basis, BEIS has provided the CMA with a copy of the information provided by heat suppliers (including some personal data) as part of the notification process. Any information disclosed to the CMA is governed by the protections offered by Part 9 of the Enterprise Act 2002, the Data Protection Act 1998, and all other applicable information law.
BEIS welcomes the CMA’s announcement of a market study on the heat networks sector and will support the CMA in its evidence gathering. The study will contribute to developing our understanding of the market and any potential issues affecting heat networks customers. More information on the CMA and the market study can be found on the CMA case page.
Heat estimator tool and guidance
RD has developed guidance to assist heat suppliers in providing information as part of the notification.
An associated spreadsheet, the Heat Estimator, has been created to further aid calculations. Each worksheet in the Heat Estimator corresponds to the numbered methods described in the guidance. The data worksheet is left visible so users can understand which values are being used.
Scotland only requirement
If the majority of your final customers are in Scotland you will also have to declare the Unique Property Reference Number (UPRN) of every final customer on the network. Scottish UPRNs can be found on www.onescotlandgazetteer.org.uk. A UPRN spreadsheet is available on the second sheet of the notifications template or stand-alone here: UPRN table
. Please complete one UPRN sheet per network.
Returning completed notifications
Once you have completed the notification template please return either by email to firstname.lastname@example.org or by post using the following PDF documents Notifications template (PDF, 116KB, 6 pages) UPRN table (PDF, 281KB, 2 pages) to:
Heat Network Notification
The deadline for notifying RD for the first time was 31st December 2015.
The sections on the notification form on cost effectiveness do not need to be completed but the remaining notification requirements still apply.
Heat suppliers must submit an updated notification for every four year period following first notification. There is no requirement to re-notify for a change of heat supplier.
The requirements of the Energy Efficiency Directive with respect to the supply of distributed heat, cooling and hot water is part of UK law under the Heat Network (Metering and Billing) Regulations 2014 as amended by the Heat Network (Metering and Billing) (Amendment) Regulations 2015.
The European Commission has produced a guidance document to help explain the heat networks legislation.
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