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More than 500,000 hot network customers will eventually be affected Natural gas power market Regulation this week.
Businesses involved in previously unregulated industries heating Multiple buildings use a central heat source, such as through ducts, to transfer excess heat generated by a data center or factory to connected properties. It falls under Ofgem’s remit from 27 January.
New rules will attract hot net customers England, Scotland and Wales More in line with those living on traditional gas and electricity connections.
The Office for Gas and Electricity Markets (Ofgem) will have the power to take action if heating network operators have unfair pricing or poor service quality and provide compensation to customers who suffer blackouts.
The Department of Energy Security and Net Zero (DESNZ) said homes and businesses on the heating network will also see clearer, itemized billing, and more support will be provided for vulnerable customers.
Some Heat Network customers have seen energy prices increase by as much as 450% as natural gas prices rise.
Energy Consumers Minister Martin McCluskey said: “For too long, customers on the heating network have been left unprotected, hit by unfair price increases and had to deal with extremely inconvenient service disruptions.
“That’s simply not good enough – that’s why from today we’re giving Ofgem new powers to take action and hold heat network providers who operate poor-quality services to account.
“The Energy Ombudsman is already offering support and I encourage anyone with ongoing issues with their heating network to contact them and take advantage of these new consumer rights.”
The Government has also announced more than £47 million of funding through the Green Heat Networks Fund to support the development of four heat network projects in London Waterloo and Hounslow, Sunderland and Salford Media City.
The Waterloo project will capture heat from the River Thames to power connected buildings, while the Media City project will capture heat from wastewater source heat pumps.
Helena Charlton, director of heating networks at Ofgem, said: “Ofgem is committed to putting consumers first and the start of heating network regulation marks an important step towards better protection.
“This change means customers will start to benefit from stronger protections around billing, complaints and support for vulnerable groups.
“Heating networks can provide efficient, cost-effective heating, but in some cases this is not the case. This framework will set important standards that consumers can trust, supported by our oversight.”
Simon Francis, coordinator of the Alliance to End Fuel Poverty, said: “Bringing heating networks to regulation by Ofgem is an important and long overdue move.
“These networks should be able to deliver low-cost energy to some of the country’s poorest households, but for years heat network customers have effectively been second-class energy consumers, facing huge price rises, poor service quality and few meaningful protections.
“But regulation alone won’t solve everything. The Office for Gas and Electricity Markets and ministers must now ensure these powers are used effectively, vulnerable households are properly protected and heat networks truly deliver on their promise: to deliver affordable, reliable heat that helps tackle fuel poverty, rather than worsen it.”