The transition to a low or zero carbon economy cannot be achieved unless it works for residents.

Heat networks are an essential part of decarbonising heating in the UK, being more efficient and able to connect to any heat source including waste heat. Like any utility, there will be some customers who would benefit from additional support. There is a more particular need for care for customers in vulnerable circumstances living on heat networks because they are currently monopoly supply arrangements where customers cannot switch their supplier.

In the UK, heating and hot water are essential services for householders. Reliance on these services can be higher among certain residents, depending on their circumstances at any given time. For example, those with young children, those who spend a significant time indoors or have long-term illnesses are likely to have a higher level of dependence on household utilities. These customers may also have less flexible usage patterns of heating and hot water.

Other customers may find it challenging to communicate with providers due to their circumstances, such as mental health issues, those who are recently bereaved or experienced a significant life shock, language barriers or disabilities such as being partially sighted or hearing impaired.

Another potentially difficult interaction is for those who are struggling financially, whether because of on-going low income or recent events affecting financial stability, and many can feel uncomfortable or awkward discussing these issues with suppliers.

Any of these circumstances, along with many others, could affect us at any time, and can combine to mean that we are “less able to protect or represent our interests in the energy market”. This is Heat Trust and Ofgem’s definition of customers in vulnerable situations.

In fact, a Mando webinar recently pointed out that when you add up the various scenarios for vulnerable situations – e.g. considering that 1 in 4 UK residents will experience poor mental health every year, 21% of adults don’t have basic digital skills and 11 million people in the UK suffer from hearing loss – it becomes apparent that these are not minority considerations.

How the heat supplier interacts with all customers, but especially those in vulnerable situations, can have a significant impact on their satisfaction and willingness to engage further with their supplier.

Suppliers can be proactive in providing additional support for customers. Measures can include training frontline staff, both in responding to enquiries remotely and property visits, to be able to identify potential vulnerabilities and know what the supplier can offer that customer. It can also include processes such as flagging customer vulnerabilities on internal systems and robust strategies for keeping ‘priority services registers’ up-to-date.

Some heat suppliers are more prepared for this than others, which is where Heat Trust can help. Heat Trust sets minimum standards for the heat network sector on customers in vulnerable situations, among other customer protection standards, in our ‘Scheme Rules’.

Heat Trust has now been in operation for over 4 years, and we are reviewing the Scheme Rules in stages to ensure they remain fit for purpose. The first ‘package’ to be reviewed is customers in vulnerable situations, where we have looked at the approaches of other regulators e.g. Ofgem and Ofwat, and looked into NICE guidelines on how a warm home impacts health. This research also fed into additional guidance for the suppliers who are registered with Heat Trust.

This is timely as Ofgem, the regulator for gas and electricity markets, has recently updated its consumer vulnerability strategy. This area is also likely to be a key focus of the new regulator when UK regulation for all heat networks (currently out for consultation) is introduced.

If you work in this sector, or are interested in learning more, please read our consultation and answer any of the questions that are relevant to you in the form provided by Thursday 12th March.

Author: Joanna Read

Thursday 6th February 2020

Today, the Department of Business, Energy and Industrial Strategy (BEIS) published its consultation on a market framework for heat networks. The consultation confirmed that government intends to provide powers to Ofgem to be the statutory regulator for the sector.

Heat Trust welcomes the consultation and supports the decision to appoint a sector regulator.

The key proposals in the consultation centre on licensing and an authorisation regime:

  • The proposed legislative changes will give heat network developers equivalent statutory rights and undertakings to other utilities, such as gas and electricity. A licensing arrangement will be established for those parties that wish to secure these additional powers.
  • The proposed authorisation regime for consumer protection would give Ofgem oversight and enforcement powers across quality of service, provision of information and pricing arrangements for all domestic heat network consumers. This would be funded through fees scaled according to the regulated party’s size.

BEIS highlights the work of Heat Trust in the consultation, noting that by registering with Heat Trust now,
“organisations will not only be able to demonstrate the quality of their service to consumers right now, but they will also be better prepared for the transition to regulation.”

Bindi Patel, Director at Heat Trust said:

“This is a milestone moment. We welcome and support confirmation from government of its plans to introduce statutory regulation. Heat networks have an important role in decarbonising our heat supply. This consultation sets out an enabling framework to support industry, and importantly, ensures customers served by heat networks are robustly protected, and enjoy the benefits of low carbon heat.
 
“We are pleased that BEIS has stated that customer protection should apply to all residential and micro-business heat network customers. Work to deliver this ambition now begins, and we look forward to sharing our learnings and experience with government and Ofgem to help inform new regulation.”
 

Ends

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Notes

Heat Trust is all about protecting heat network customers.

We are an independent, non-profit consumer champion for heat network customers that holds the industry to account for the benefit of everyone involved. We make sure customers enjoy heating systems fit for the future by:

  • Applying strict customer service standards to heat suppliers, similar to those for traditional gas and electricity suppliers;
  • Providing access to an independent dispute resolution service through the Energy Ombudsman; and
  • Working with suppliers to promote best practice, innovation and continuous improvement in customer service.

Launched in November 2015, Heat Trust provides protection to over 10% of residential and micro-business heat network customers. Our annual reports can be found here.

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Bindi Patel
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Heat Trust
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Heat Trust’s third annual report was published this week, revealing that they now provide protection to 10% of the market. Reflecting on the experience gained over three years, the report sets out key principles to consider as regulation of the market is developed.

Bindi Patel, Director at Heat Trust said:

“Heat Trust has been working to support the adoption of minimum customer service and protection standards across the heat networks sector since 2015. Regulation is an important next step. With ambitions for a significant proportion of homes and businesses to be served by heat networks, it is essential that heat networks provide reliable low carbon heat and that customers receive the same protections as other energy customers.”

Other principles identified include the need to ensure consistency between different nations as Scotland proceeds with its plans for heat networks regulation, focusing on customer outcomes to allow flexibility on how services are delivered, and integration with wider regulatory developments. Bindi noted:

“Regulation of heat networks is taking place during a time of rapid transition across the energy market. It is important that heat network regulation is considered alongside other regulatory changes in the energy market, and that customers on heat networks can access and benefit from future innovation.”

The report provides a summary of performance of heat networks registered with Heat Trust over the previous year, revealing that technical issues, billing and charges were the most frequent issues raised by customers. Over the year:

  • There were 4,657 complaints recorded by Registered Participants
  • The majority of complaints related to technical issues (42%) followed by billing and charges (34%)
  • There were 63 planned interruptions and 745 unplanned interruptions
  • The majority of unplanned interruptions were due to issues affecting generation equipment

Variation in how different suppliers collect performance data emphasises the need for industry-wide performance metrics – a call first made by Heat Trust in its inaugural annual report.

This report also provides details on complaints that were received by the Energy Ombudsman. The data from the Energy Ombudsman covers 1st January 2018 – 31st December 2018. During this 12-month period:

  • There were 83 complaints within the Ombudsman’s terms of reference (TOR)
  • The majority of complaints were due to billing (60%)
  • Of complaints within the TORs, 63% were upheld by the Ombudsman and a further 23% reached a Mutually Acceptable Solution
  • A goodwill payment was awarded in 72% of cases, the average award was £105.61

For the first time, Heat Trust has been able to include data on debt and supply suspensions. The report notes that this is an area of importance and in particular, identifies areas for improvement to support debt management.

“Our work has focused on setting minimum standards and collecting data to build a picture of current practices. We continue to work with stakeholders across the market to support the sector and champion good outcomes for heat network customers. A government consultation setting out the first proposals on heat network regulation is expected next year. We look forward to sharing our experience and knowledge with stakeholders, governments and indeed a future regulator to support development of a robust regulatory framework.”

Ends

Friday 24th May 


Today Heat Trust has published a consultation as part of work to update its Heat Cost Calculator.

Heat Trust launched its Heat Cost Calculator (HCC) in 2016 to provide customers living on heat networks an indication of what it would cost to heat a similar sized property using an individual gas boiler.

Although the HCC cannot provide a bespoke assessment, Heat Trust has developed the tool to encourage better transparency in the market on heat charges by providing customers a tool that allows them to compare against a common alternative.

The majority of space heating in the UK is provided by gas boilers, which is the alternative used in the current HCC. However, a growing number of UK properties use electricity as a heating fuel. Electric heating is becoming more common in flats where heat demand is lower and / or the number of floors in the building prevents gas being used on safety grounds.

Heat Trust therefore recognises that it would be helpful to expand the HCC to include electric heating.

Bindi Patel, Head of Scheme at Heat Trust said:

“The Heat Cost Calculator allows customers to gain an indication of the annual heating and hot water costs for a similar-sized property assuming it had a modern gas boiler.

Recognising that for a growing number of properties the alternative is more likely to be electric heating, Heat Trust has been working to expand its HCC to include electric heating.

We are keen to receive feedback on the proposed formulas and look forward to engaging with stakeholders further as our work develops”

 The consultation published today seeks feedback on the formulas for electric panel heaters and electric storage heaters. The consultation also asks for views data for other renewable technologies where publicly available data is limited.

Responses to the consultation should be received by Monday 8th July 2019.  The consultation can be accessed here.

Friday 05 April 2019

Heat Trust welcomes the Minister of State for Energy and Clean Growth’s open letter to all heat network operators on improving customer service. Noting that government intends to legislate, the Minister calls for industry to improve consumer experience by building on existing good practice now, rather than waiting for regulation.

The Rt Hon Claire Perry MP said:

I encourage all owners and operators of heat networks who are not currently registered with Heat Trust and who do not offer equivalent standards to consider joining. The quality standards that the voluntary scheme sets out will give your consumers important reassurance and protections.

Heat networks will play a significant role in meeting heat decarbonisation targets, with expectations that up to 1.5million households will be served by a heat network by 2030.  It is vital that as the sector evolves customers are assured service standards that are comparable to the rest of the energy market.

In welcoming the letter, Bindi Patel, Head of Scheme for Heat Trust said:

"Heat networks need to work for customers, and at Heat Trust we have been working to promote better customer service practices in the heat network sector since 2015. The standards we set are designed to ensure customers benefit from a level of service and protection that is comparable to the rest of the energy market.

 

“We support the call for regulation, but proactive action is needed now. We welcome the Minister’s letter encouraging all heat networks to join Heat Trust. With over three years’ experience, Heat Trust can support the market to ensure heat suppliers are equipped and prepared for future regulation.

 

“We also recognise that as the market evolves, so too should our standards. We are keen to work and engage with all types of suppliers to understand their needs and help inform future development of the scheme.”

For more information about Heat Trust visit www.heattrust.org

ENDS

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Notes to editors

Heat Trust launched in November 2015. It sets out a common standard in the quality and level of customer service that heat suppliers should provide their customers.

It also provides an independent process with the Energy Ombudsman for settling complaints between customers and their heat supplier. This service is free for customers to access.

In 2018, Heat Trust consulted on expanding the Scheme by allowing those sites without Heat Customer Supply Agreements to join if they provide equivalent protections, e.g. a customer charter. As a result, there is the potential for thousands more customers to benefit from the same protections. The Heat Trust Scheme Rules were amended to include this change from 1 April 2019.

For more information on the consultation click here.