The Department of Energy Security and Net Zero (DESNZ) is consulting on the introduction of regulatory heat network technical standards and a Heat Network Technical Assurance Scheme (HNTAS). The HNTAS consultation closes on 15th April.

It is important to take this opportunity to tell the Government your views because most social landlords will be regulated as heat network operators. You are encouraged to provide any evidence you may have to support your views, especially in relation to any extra costs of complying and whether the implantation timescale is realistic.

Why should every landlord respond?

The majority of existing heat networks are managed by the not-for-profit sector, including social landlords, operating on a cost recovery basis and often at a significant loss. Local authorities and housing associations are facing multiple priorities such as building safety, damp mould and condensation, Decent Homes, and MEES. The proposals for HNTAS would wipe out any additional funds available through the social rent convergence. Social Landlords involved with The Heat Network believe it is simply not affordable in its present form.

It is essential the sector responds (every response counts) to ensure the Government hears the concerns social landlords have and does not introduce HNTAS as proposed.

What are the key concerns?

The main concern is that the HNTAS proposals are not proportionate, affordable, or deliverable. The consultation indicates they will add significant costs, be hugely complex and make heat networks more expensive for customers.

• The HNTAS approach of multiple assessment and certification points throughout the design, build and commissioning of a heat network is not proportionate, affordable, or deliverable.
• The proposed governance structure is too complicated and will result in additional costs which will eventually be borne by the customer. The administration costs of nearly £1bn will be unacceptable to the consumers who will bear these costs but will recognise no direct benefit. Complex governance does not automatically lead to good outcomes for customers.
• HNTAS is too complicated and will be too expensive to deliver – KPIs, Statements of Conformity, assessment gateways and certification is excessive.

What should social landlords do?

Respond to the consultation and provide clear evidence on the costs, especially for Milestones 2 and 4, (and other challenges) for implementing HNTAS. It is important that as many landlords as possible respond to support the sector’s key concerns and to provide evidence, even if it is not a detailed response to all the questions – a letter is sufficient to state your concerns. For landlords that have not analysed the detailed questions, there are a few simple options to respond.

For landlords who are members of The Heat Network (THN), they can:

• Copy/paste sections of the THN’s response they support.
• Send a letter saying they support the THN response and include some of its key points.

Others can use the concerns identified in this briefing to inform their response (even a letter). The Heat Network is proposing that HNTAS as proposed be suspended and reviewed with consideration of an alternative approach (see below) for existing heat networks:

• Minimum Service Level Agreements (SLAs): All heat network operators and suppliers should be required to meet defined minimum service standards (specific expectations around both outages and delivered temperatures). Not meeting these standards should result in residents being compensated.
• Transparent Price Guarantees, making it explicit that variable charges can only reflect actual energy costs, with protection for residents from inefficiencies with set minimum levels (operators / suppliers absorbing the cost of additional inefficiencies).
• Fair Treatment for Service Charge Based Networks with exemptions where changing the billing model would increase costs for end users (proposed Metering and Monitoring Standard should be decoupled from HNTAS – see later).
• Improvement works should be considered over a 20 to 30-year period to allow costs to be spread over a reasonable time frame that reflects payback periods.

What else is included in the consultation?

Below are some other key HNTAS requirements being proposed.

• Metering and Monitoring Standard (MMS). Since MMS is driven by the requirements of HNTAS, The Heat Network’s members think that if HNTAS is streamlined, the MMS can be too. It is suggested that the MMS should be decoupled from HNTAS and subject to independent review to ensure consumer benefit is at its heart and should include full engagement with owners, leaseholders, and tenants (heat network supply chain advisory role only). As well as technical concerns (realities of retrofitting and the proposed long-term maintenance of MID-compliant thermal energy meters), any review should address the timetable of installing individual meters, mandatory installation, powers of entry and legal and commercial arrangements in different tenure and mixed tenure schemes.
• Supported housing, alms house and student accommodation To extend metering requirements to existing supported housing, alms house accommodation and purpose-built student accommodation, so that they can be covered by HNTAS
• Leasehold properties HNTAS requirements, including metering, should be applied to buildings with leasehold properties which prevent consumption-based billing (HNMBR exemptions).
• Heat cost allocators to be disallowed to demonstrate compliance with HNTAS.
• Powers of entry heat network operators to be provided with powers of entry to conduct necessary maintenance of heat network equipment for health and safety, to meet required technical standards and to install and maintain metering systems.

How can landlords find out more and get help?

The Heat Network is a forum to discuss and share good practice about district and communal heating within social housing.  It brings together its own communal heat experiences, shares lessons and some short guidance documents to help colleagues across the sector. It also acts as a conduit for social housing input into national heat network policy.

NHMF’s Best Practice website has published briefings on the Heat Network Regulations, as well as on a wide range of asset management and repairs and maintenance requirements, including links to all the relevant legislation and guidance.

Landlords should also sign up to DESNZ’s Newsletters to be kept up to date and to be notified of webinars, training, and other help that the Government is providing to help the sector understand and comply with the new Heat Network Regulations.

The NHMF acknowledges the help and advice it has received from Rachael Mills, The Heat Network.