UK government still unclear on regulation of heating industry

The UK’s Department for Business, Energy and Industrial Strategy (BEIS) is still unsure on how to progress with the regulation of the country’s heat network market, despite a growing acknowledgement of the importance of decarbonising the sector.

BEIS is trying to work out whether heat suppliers should be regulated in the same way as gas and electricity suppliers, and remains in “evidence gathering mode” for the time being.
“Clearly regulation has a part to play”, said BEIS senior head of heat networks policy Guy Boulby. “But we shouldn’t be jumping to conclusions about the right solution for the market, particularly considering where the market is at the moment – it’s still fairly small.”

Speaking at an event dedicated to waste heat at the Danish embassy in London, Mr Boulby said the department is “really keen” for the sector to explore its own proposals for offering protections to consumers and investors: “The answer to achieving those outcomes could be regulation or it could be other forms of market support, including industry led.”

Utility Week reports that BEIS is currently conducting a survey to gauge the extent of the problems faced by consumers, the results of which are expected to be published in the autumn.

Increased media scrutiny over the failings of some district heating schemes means there will be a “renewed focus” on the issue, Boulby said at the event.

Some of the criticism of particular schemes are leading to increasing calls for regulation from both inside and outside the industry, with Citizens Advice recently stating that it was concerned over the balance of power between consumers and suppliers.

Boulby said the heat networks team at BEIS is trying to get district heating, and low-carbon heating in general, “higher up on the agenda of our ministers”. He also confirmed that the clean growth plan detailing how the government intends to meet its emissions reduction targets – including through the decarbonisation of heating – should be published later this year following a series of delays..

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