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Heat networks: Building a market framework

The Government has committed to achieve net-zero greenhouse gas emissions by 2050. Meeting this target will require nearly all heat in buildings to be decarbonised. Heat networks are a crucial aspect of the path towards decarbonising heat.‚Äč

Objectives of the consultation

In this consultation, the Government sought views on policy options for regulating heat networks to protect consumers and ensure fair pricing, while supporting market growth and the development of low-carbon networks.

This consultation set out:

  • measures to increase levels of investment in the sector,
  • policy options for establishing a market framework to deliver important consumer protections,
  • proposals relating to the choice of regulator, the regulatory approach and enforcement powers,
  • proposals for developing technical standards, certification and accreditation processes to improve the quality, cost and reliability of heat networks,
  • proposals for giving heat networks rights and powers equivalent to other utilities,
  • proposals to drive decarbonisation of heat networks and use of waste-heat sources.

This consultation closed on 1 June 2020.

Supporting papers

To download documents, which supported this consultation, follow the links below.

CIBSE response

CIBSE very much agrees that regulation is necessary to encourage decarbonisation of heat networks. This should apply to all networks and CIBSE strongly disagree with the proposal that decarbonisation requirements should only apply above a certain threshold, particularly with the proposed threshold capturing only 2% of the total number of heat network suppliers, which seems very much contradictory to decarbonisation objectives.

Regulations should not steer towards particular technologies but set performance criteria in terms of carbon and air quality emissions, and schemes which offer flexibility to adopt a range of future low-carbon sources and systems should be encouraged. Low-temperature systems and 5th generation networks, which offer the option for heat sharing between consumers offer particular advantages.

In addition (not instead of):

  • Government should remove the current dis-incentives to the decarbonisation of heat networks, in particular the factors used in Building Regulations Part L which skew the assessment of carbon performance and provide an artificial support to higher-carbon heating solutions. We have serious concerns about these factors and have raised them as part of our response on Part L and the Future Homes Standard3.
  • Connection to heat networks as part of planning applications should only be required if the heat network offers carbon benefits (to the scheme and/or the surrounding area), now and in its projected lifetime. It should be subject to a detailed appraisal and feasibility study, given the significant initial capital expenditure (in finances, material resources, and embodied carbon). Exceptions should only apply if there are very certain and robust plans in place for decarbonisation within a small number of years (say, 3-5); there should be guidance on what these plans entail and on guarantees to ensure they will be put in place – CIBSE would be happy to work with BEIS on this.
  • More generally, and not only for heat networks, there needs to be review of energy prices as the current discrepancy between cost impact and carbon impact of gas and electricity can be a barrier to investment in low-carbon solutions.

To read the full CIBSE response to consultation questions, follow the link below.