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District Heating: Regulation

Department for Business, Energy and Industrial Strategy written question – answered on 27th June 2018.

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Photo of Vicky Foxcroft Vicky Foxcroft Opposition Whip (Commons)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to regulate district heating.

Photo of Vicky Foxcroft Vicky Foxcroft Opposition Whip (Commons)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what recent assessment his Department has made of the cost effectiveness of district heating systems.

Photo of Vicky Foxcroft Vicky Foxcroft Opposition Whip (Commons)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to ensure that energy firms produce clear and transparent billing for district heating in new developments.

Photo of Claire Perry Claire Perry The Minister of State, Department for Business, Energy and Industrial Strategy, Minister of State (Business, Energy and Industrial Strategy) (Energy and Clean Growth)

The Clean Growth Strategy committed to assessing the sector’s future market framework. The Department will consider the recommendations from an industry taskforce published in January 2018 and the CMA’s final recommendations in developing an appropriate future market framework that will deliver benefits for consumers and growth for the sector.

District heating has significant potential to reduce energy bills and carbon. We are investing £320m in the sector through the Heat Networks Investment Project launching in the autumn to ensure consumers benefit from this opportunity and get a fair deal; a number of pilot projects have already received funding.

In the 2017 Clean Growth Strategy BEIS assessed the carbon cost-effectiveness of various technologies including district heating systems at an estimated £184/tCO2e for domestic district heating (undiscounted, 2015 prices), and £224/CO2e for non-domestic district heating. These figures do not account for the network benefits of district heating systems and the option value of exploiting future low-carbon heating technologies at large-scale.

The Heat Network (Metering and Billing) Regulations 2014 require heat suppliers to install individual heat meters in all newly constructed buildings connected to district heat networks. The regulations require that bills for those metered properties are accurate, based on actual consumption, and that they clearly set out how the bill was calculated.

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