The ADE industry-led Task Force group called for a regulatory framework to reduce investment risk and guarantee customer protection in its Shared Warmth report, published in January. The report also sought to address the challenges created by the natural monopoly of heat networks, including the role for regulation in price, contract length and structure, and competition.
The ADE has supported the CMA with its market study and shared its heat network customer protection proposals as part of its work.
“The CMA’s announcement that it is considering regulation of the heat network industry to ensure customer protection is welcome. The Association for Decentralised Energy, together with industry, has already called for regulation and shared this view with the CMA,” said ADE Director Dr Tim Rotheray.
“We also welcome that the CMA has recognised the real customer benefits that heat networks can deliver, providing heat at the same or lower cost than other forms of heat.”
Dr Rotheray said industry has a track-record in proactively working to drive up standards for heat network customers – establishing the customer protection scheme Heat Trust and publishing a Code of Practice to set out minimum standards – in addition to making the call for regulation.
“The work being done by industry to date in driving up standards and the call for regulation has been cited by the CMA, and we look forward to having the opportunity to providing ongoing support as it finalises its market study,” he said.
Dr Rotheray highlighted that any regulatory framework developed must consider how to reduce investment risk on heat networks as well as ensuring customer protection.
“It is critical that any regulatory framework is well thought out, as this will not only protect customers but also reduce investment risk on heat networks to support market growth,” he said.
“Securing investment and protecting customers are two sides of the same coin; contented customers are key to investors being confident and willing to invest, which in turn drives down investment cost and so customers’ heat bills.”