Citizens Advice has recently finished an investigative study, examining the growing market of heat networks, also known as district energy, in regards to consumer rights. With the recent launch of the Gateshead District Energy Scheme, this research is pertinent to the local area.

Heat networks are systems of energy supply which function by heating water communally rather than in individual boilers. They have been commended by environmentalists for being more energy efficient than traditional systems of heat distribution.

The Gateshead District Energy Scheme, is one such heat network, which was opened in March 2017. The scheme currently provides energy to a number of public buildings and residential homes and it plans to expand across Gateshead.

Concerned about the lack of consumer protection in the mostly unregulated heat network market, Citizens Advice launched its investigation last month; it found a number of troubling trends.

We found huge discrepancies in the calculation of tariffs across suppliers, with suppliers calculating their tariffs in vastly different ways. The research also notes a distinctive lack of consumer choice available, with 70% of heat network schemes only offering a single tariff for domestic customers.

The study highlighted the lack of choice heat network customers have in choosing their metre types, with only half of the respondents being offered a choice in metre by their supplier. Additionally, we found that customers were often being charged for disconnecting from their heat network, or being denied the opportunity to do so at all.     

On a more positive note, we discovered that the levels of debt and arrears in heat networks were particularly low. Only 1.45% of heat network accounts showed debt or accords, less than half that of gas (3.4%) and electricity (3.1%) accounts.

Citizens Advice surmised from this research that the Competition and Markets Authority should launch an investigation into consumer protections and the lack of choice in the heat network market. We have also recommended that the government should examine current research into heat networks and establish regulations which heat networks must adhere to.

If you are considering joining a heat market, we recommend you read the charity’s full report, available here.