Heat Networks Regulation

Debate between Lord Harrington of Watford and Matthew Pennycook

Wednesday 28th November 2018 Westminster Hall

[Richard Harrington]

I thank my hon. Friend for his intervention. I agree with him. It seems to me that legislation is exactly what is needed. In my three years as a Minister, I have learned that it is easy to talk about legislation, but it is all in the detail. We have to make sure that it does exactly what my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) mentioned, which is to protect consumers, but at the same time provide a basis for the industry to expand. As I said, for decarbonisation and for many things, the structure can be a really good one for consumers.

[Matthew Pennycook]

I agree with the Minister. At the moment, technology and confidence in it is being put at risk by the fact that consumers on many schemes—not all—are not getting a good deal. Would the Minister give us a sense of the timeline that the Department is thinking about for legislation and providing that extra protection? I have been campaigning for more than three years, ever since I was elected, and my constituents are not willing to wait another year or two years until that protection is brought in.

[Richard Harrington]

I fully accept the hon. Gentleman’s point. I wish I could wave a magic wand and say that it is going to be done the week after next. It is in the pipeline; I can assure him of that. It would be wrong of us to jump into something without giving it considerable thought. I fully accept his frustration and that of his constituents, and that is paramount. To him and the hon. Member for Lewisham East, that may sound like I am waffling and prevaricating, but it is just how it is. I would be very happy to meet them in the early part of next year to discuss progress, if that would help. The Department is not putting this on the back burner or anything like that. I give them that undertaking.

I believe that heat networks, if done properly, represent a significant opportunity to upgrade part of the whole UK energy infrastructure and seize the opportunity for British business that the technology presents. Heat accounts for about a third of UK carbon emissions. We have to cut our emissions to meet our carbon reduction targets. Heat and heat networks can play a critical role in this. We have made considerable progress generally through renewable heat incentives and energy company obligations, which have provided an incentive for heat networks to install lower carbon heat sources. The investment of £320 million in heat network projects, which is a mixture of grants and loans, is to be encouraged. Again, we have to ensure that where the Government are providing that support, adequate consumer protection measures are in place by requiring projects to demonstrate Heat Trust or equivalent standards when operational.

There are many heat network suppliers that provide strong consumer protections, such as Energetik, established by Enfield Council to provide better value, reliable and environmentally-friendly energy. I hope that the service charter that Energetik provides to its customers sets out clearly the minimum standards of service they can expect, what measures they provide to those vulnerable customers needing extra help and how they can be contacted should something go wrong.

We have worked closely with industry and consumer groups to support, through funding and guidance, the development of the UK-wide Heat Trust scheme, which is an independent consumer protection scheme designed specifically for customers. It draws on the terms of service offered to gas and electricity consumers. That said, I reiterate the comments made by the hon. Member for Greenwich and Woolwich. I agree with him that it is a voluntary scheme and does not protect all customers. I accept the assertion made by the hon. Member for Lewisham East that it does not protect all consumers, which I am sure is correct. However, I do not think it is all bad; I think it has been an improvement as well.

Where sites are registered with the Heat Trust, such as the Catford Green development in the constituency of the hon. Member for Lewisham East, they are not offered protections on pricing and contracts. Although we can learn some things from the work of the Heat Trust, that does not remove the need for further action. That is particularly the case as heat networks often operate as natural monopolies and customers can be contracted for very lengthy periods of up to 25 years, as the hon. Lady said. We want to ensure that heat network consumers are able to make informed choices about whether a property on a heat network is right for them, and to feel confident that if issues relating to their heating systems arise, they have recourse and there is a way to redress them.

The role of Government is to ensure that we are providing clean and secure energy at an affordable price to the consumer. We need a long-term market framework that places consumers at its heart, that still delivers sustained investment in the sector and maximises the potential economic and environmental benefits of heat networks. I hope that I have outlined a number of measures that the Government have already put in place and I hope that industry, consumer groups and all interested stakeholders will work closely with us as we develop our plans for further interventions.

Question put and agreed to.