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Communal heating systems

Volume 722: debated on Wednesday 9 November 2022

The petition of residents of the constituency of Twickenham,

Declares that communal boiler schemes are not regulated by Ofgem, and are hence not protected by the cap on energy price rises; further that residents in Twickenham were told that their communal boiler schemes would be a more environmentally friendly and cheaper way of supplying energy; notes that residents have now been informed that the cost of their heating is going to rise by up to 700%; notes that there are over 14,000 heat networks in the UK, supplying as many as 480,000 people who have been left unprotected by the price cap as energy prices skyrocket; and further that a significant number of these homes are classed as social housing.

The petitioners therefore request that the House of Commons urge the Government to reallocate funds to provide full, immediate financial support to households with communal heating systems, subsidise the excess cost of their bills over the energy price cap set by Ofgem, and to expedite the legislation the Government proposed last year to regulate heat networks in order to protect customers.

And the petitioners remain, etc.—[Presented by Munira Wilson, Official Report, 7 September 2022; Vol. 719, c. 348.]


Observations from the Minister for Climate (Graham Stuart):

The energy bill relief scheme (EBRS) for GB and NI will enable the Government to provide financial assistance for all eligible non-domestic customers, including heat network operators, to ensure they are protected from excessively high energy bills over the winter period.

The Government supported price is expected to be £211 per megawatt hour (MWh) for electricity and £75 per MWh for gas, which is less than half of expected wholesale prices this winter.

The price reduction will include charges for electricity and gas used initially from 1 October 2022 to 31 March 2023. The Energy Prices Act 2022 will require eligible heat network operators to pass on discounts from the EBRS to their consumers. They will also be required to explain how they intend to reduce prices or hold them down if their prices are already low. The Government are using this legislation to appoint the energy ombudsman as a body that consumers can go to this winter, if they are concerned their heat network operator is not meeting the requirements of legislation.

A Treasury-led review has been launched to consider how to support households and businesses with energy bills after April 2023. Further details will be announced in due course.

The Government want heat network consumers to receive equal protection to gas and electricity consumers. That is why the Government introduced the Energy Security Bill on 6 July, which sets out plans to have Ofgem regulate the heat networks sector. Under the proposed regulatory framework, Ofgem will be given new powers to regulate prices in this sector as a matter of priority and the legislation contains the ability for the Government to set minimum efficiency standards for heat networks. This will mean that consumers are charged a fair rate for heating while encouraging investment in heat networks.