Cost of living crisis
We are campaigning for local and national changes in response to the cost of living crisis.
Here, we are raising awareness of soaring energy prices for people who are on a communal heat network.
Residents in flat blocks with communal heating systems, known as ‘heat networks,’ are facing soaring energy prices despite energy price caps
Heat networks are a way of managing and reducing carbon emissions.
The Government has an aim to expand heat networks to achieve its net-zero commitments.
Heat networks supply around 2% of the UK’s energy but the Government intends to increase this to 20% by 2050.
Heat networks supply heat from a single source and energy is shared to homes through pipes.
Residential flat blocks that rely on communal energy sources from a heat network are classed as ‘commercial,’ not ‘domestic’ dwellings. This is a loophole that allows energy companies to charge residents beyond the energy price cap.
In December 2021 the Government confirmed its plans for Ofgem to regulate the heat network market but this has not been put in place yet.
Residents living in these blocks are not able to choose an alternative energy provider for their own individual flats.
Therefore, unless urgent action is taken it is likely that residents on these heat networks will be forced to pay even higher energy price rises than most households this year.
The consumer protection body Heat Trust has warned the Government that urgent action is needed.
Heat Trust recommends:
- bringing forward Government plans for the heat network market to be regulated by Ofgem
- making sure heat network operators and consumers are able to access any government support designed to support vulnerable residents and families.
The Chief Exec of Ofgem has said:
“We will work with the government to design a regulatory framework which attracts the investment needed while ensuring heat network consumers, especially those in vulnerable circumstances, receive a fair price and reliable supply of heat for their homes as we make the transition to net zero.”
The Director of Heat Trust, Stephen Knight, has written to the Secretary of State for the Department of Business, Energy & Industrial Strategy to request the Government doesn’t overlook providing financial support to the 500,000 households that aren’t currently covered by the energy price cap:
“Heat networks have the potential to offer low-cost, low-carbon heat, but without intervention hundreds of thousands of families are facing horrendous and unaffordable heating bills this winter.”
Further information on the energy price cap:
The Energy Price Cap is a protection from the Government, set by energy regulator Ofgem.
The price cap, which is reviewed twice a year, sets a maximum price per unit of energy that energy suppliers can charge customers (for default domestic tariffs).
The aim of the price cap is to make sure that energy prices reflect the cost of supplying energy.
Recently, the difference in price between the cheapest energy deals and the default rates set by the price cap have narrowed a lot which has left customers with fewer options to reduce their bills.
The current default tariff prices set by the energy price cap have been in place since 1st October 2021. They are going to end on 31st March this year.
Most energy suppliers have chosen to set their price rates close to the maximum boundary of the energy price cap which is £139 higher than the previous one.
The Government has said that households can expect their electricity bills to rise by up to £700 from 1st April when the current energy price cap ends and a new one is set.
When there are rises in wholesale energy prices it means that energy suppliers pay more for the energy they provide customers with, meaning to make profit they increase the amount of money they charge their customers.
The energy price cap delays rises in energy prices from affecting customers immediately. However, residents of flat blocks on heat networks are not being protected by the energy price cap and face even higher increases to their energy bills. More than half a million households on heat networks will be affected by significant and unpredictable rises in energy prices.
If you’re having issues with your energy bills or supplier, you can get more advice from the Citizens Advice consumer helpline by calling 0808 223 1133.
You can contact our local freephone adviceline on 08082 78 78 15 or send your enquiry to us online here.