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Heat Networks

Volume 737: debated on Tuesday 19 September 2023

17. What assessment she has made with Cabinet colleagues of the potential merits of introducing a mandatory price cap on heat networks. (906471)

The Government are providing millions in support for remedial work through the heat networks efficiency scheme. We are supporting customers with their bills via the energy bills discount scheme. Through the Energy Bill we will appoint Ofgem as a heat network regulator, so that customers benefit from fairer prices.

I must declare that I live in a block with a heat network. Many heat networks will be quite expensive to change under the technical rules proposed by the Government for 2024. Given many blocks have also had cladding and other pressures on leaseholders, are the Government looking carefully to ensure that customers are not being overlayered with many more charges to remediate networks?

Through the heat network efficiency scheme, the Government are providing £32 million to upgrade existing heat networks and reduce energy costs. The scheme will upgrade old equipment and help consumers in more than 10,000 houses to reduce their energy use. We will shortly announce the first awards from the fund.

Residents living in New Mill Quarter in Hackbridge in my constituency have been plagued by a litany of problems since they were connected to the Sutton decentralised energy network, including an inability to change tariffs. Does my hon. Friend agree that residents have been let down by the mismanagement identified in an independent report on its poor running by Lib Dem-run Sutton Council? Will she commit to working with me to ensure that heat network customers, who have nowhere else to go for their energy, are protected by new measures in the Energy Bill?

I know how hard my hon. Friend works for his constituents and I thank him for bringing this scheme to my attention. We want all heat network customers to receive a high-quality service and fair pricing, which is why we are appointing Ofgem as a regulator through the Energy Bill and currently consulting on how it will operate. Of course I will meet my hon. Friend.

Many of my residents are locked into district heat network schemes. They have been paying up to 13 times more than the rest of the UK because they are not protected by the energy price cap. Do the Government not think it is time to implement a mandatory price cap straight away?

At this moment in time we do not think that a uniform price cap would benefit consumers, given the huge diversity in size and scale of providers in the market. However, through the Energy Bill, the Secretary of State will have powers to introduce a price cap, should one be beneficial in future.