• Government support ended on 31 March 2024 for 500k households not covered by the energy bill price cap.

  • Just 15% of allocated government assistance reached heat network consumers – some households still paying five times as much as domestic gas consumers.

  • Heat Trust has written to the Energy Minister to call for an extension to the support scheme.

As Ofgem's latest price cap sends average household energy bills to their lowest level in two years, a consumer body is sounding the alarm for more than half a million households who will miss out on the guarantee of lower bills following the withdrawal of a government support scheme.

Households living on communal and district heat networks – a key part of the government’s plans to deliver low-carbon heat to the UK – are currently excluded from any protection created by the price cap.

The Energy Bills Discount Scheme (EBDS) was created to provide equivalent support but ended on 31 March, leaving families exposed to unrestricted prices dictated by the wholesale gas market.

Heat Trust, the national consumer champion for heat networks, has written to Energy Minister Lord Callanan to call for an urgent extension to the scheme.

It points out that official data on payments made to energy suppliers under the scheme show that less than 15% (£55.5m) of the originally-allocated £380m had been spent after 10 of the 12 months of the year. This data also suggests that only around 2,550 heat networks had their electricity and gas costs supported, out of the 9,000 plus UK heat networks with domestic consumers.

Heat Trust also said that it is still hearing of many cases of consumers paying heat tariffs at rates as high as 50-80p/kWh, which could equate to bills of over £5,000 per year for heating alone. 

Even as energy wholesale prices fall, many heat network consumers will not feel the benefit for some time. This is because their providers may be locked into fixed-price contracts, something the support scheme was designed to mitigate. Heat network operators (usually the building owner/freeholder or their appointed energy company) buy gas for communal boilers on the uncapped commercial gas market, before converting it to heat for households.

Stephen Knight, Director of Heat Trust, said:

“When the Energy Bill Discount Scheme was launched, the government said that it would ensure heat network customers would not face disproportionately higher energy bills than other households. Sadly, for many of the country’s 500k heat network customers, this has not been the case.

“While most households are finally now seeing their energy bills falling, many families in homes supplied by heat networks are still experiencing much higher prices as they remain unprotected by the price cap and pay for heat based on the historic wholesale cost of gas.

“We have called on the government to urgently extend the scheme for a further year to ensure that help reaches more heat network customers in need of support. At the very least, we need to ensure that everyone entitled to support in 2023-24 receives the money that they are entitled to, and that enforcement action is taken against suppliers who have failed to apply on behalf of their customers.”