Here are some key differences between heat networks and the regulated market (gas and electricity):

Heat networks

Traditional (natural)  gas/ electricity

Switch    Switching supplier

Heat networks in the UK are natural monopolies, run by a particular company, and typically have contracts that are in place for the period the customer owns or occupies the property.

Because of this, minimum customer service standards to ensure customers are supported,  particularly those in vulnerable situations is even more important for heat networks. Transparency and regulatory oversight of pricing also become more important.

Customers can switch their gas and electricity supplier. Typically gas/ electricity customers have shorter contract lengths

 

 

 

Equipment   In-property equipment

Heat network suppliers maintain the Heat Interface Unity (HIU) and meter within a customer’s property, including usually replacing it at end of life. This is usually included within the cost of the heat bill, so customers don’t need to pay for it.

This is an opportunity for more customer interaction and therefore better identification and support for vulnerable customers.

There is also an increased need for technical standards to ensure good performance.

The customer is typically responsible for replacing their boiler at the end of its life. Many customers will also arrange servicing of their boiler/heaters independently of the supplier. They will likely pay for this service. 

 

 

 

 

Charges     Standing charges

Heat network customers’ standing charge includes the maintenance and repair of HIUs as well as pipework. They are consequently higher on average than they are for gas/electricity customers.  There is also a wider variance in what is included in the fixed and variable charges between different suppliers.

Because standing charges cover fixed costs such as metering, with other costs such as boiler maintenance being picked up separately by the customer, these charges are typically lower. There is also relatively little variation from one supplier to another.

Planet     Environmental impact

By utilising economies of scale heat networks are more efficient to run and can more easily make use of low carbon sources of heat such as waste heat. Their source of fuel is also more easily replaced by a lower carbon source, as there is one central energy centre.

Natural (mains) gas is a fossil fuel, which is burned to heat most of our homes and hot water but contributes to climate change. Electricity is increasingly becoming greener, however some low carbon heating that uses electricity require high levels of insulation to be efficient.

Complaint   Access to independent redress

Pending regulation, access to the Energy Ombudsman, the independent dispute resolution service for the sector, when things go wrong are limited to those customers on sites registered with Heat Trust.

All customers with gas or electricity have access to the Energy Ombudsman if complaints cannot be resolved directly with their supplier.

Size      Scale/ size

Heat network suppliers typically have a smaller number of customers than in the gas/ electricity market.  There are also far more of them, with approximately 2,300 in the market today.

Customers are often one of hundreds of thousands of customers for their supplier.

 

Protection    Regulatory protections

Only metering and billing of heat networks is currently under statutory regulation, although more wide-reaching regulation is being developed in the UK. All other aspects of assured customer protection specific to their energy supply are available only for customers on sites registered with Heat Trust.

All gas and electricity customers are protected through Ofgem’s licencing system.