Question to the Department for Business, Energy and Industrial Strategy:

To ask Her Majesty's Government what plans they have to address the financial impact of rising energy prices on households with district heat systems that are not covered by the energy price cap; and what is their timetable for implementing those plans.

The Experimental Statistics on Heat Networks published by the Government in 2018 showed that approximately 440,000 of all UK heat network customers are residential. The specific geographical distribution in terms of number of residential customers can be found in Figure 1 below.

The latest 2020 Fuel Poverty Statistics published shows that only 3% (i.e. 92,000) of all fuel poor households in England has central heating systems that use ‘other’ fuels, which consist of propane, bulk LPG and community heating or heat networks. Therefore, the proportion of fuel poor households served by district heating systems are likely to be much smaller than 3%.

The Government’s Heat Network Consumer Survey published in 2017 estimated that the proportion of heat network customers living in more energy efficient buildings such as flats or social housing are significantly higher than the general England and Wales population. Given most flats or social housing tend to have energy efficiency ratings higher than EPC Band D, it therefore indicates heat network customers are much less likely to experience fuel poverty in comparison to the wider population.

The Government is aware of the steep increases that some consumers on communal networks are facing. For this reason, the government is taking action worth more than £9.1bn supporting households through initiatives such as the Energy Bills Rebate, the Household Support Fund, Warm Home Discount, Winter Fuel Payments and Cold Weather Payments. These measures are intended to cover heat network consumers and the government is engaging closely with industry and consumer groups to understand the specific impacts in the heat network sector and continue to assess whether further options are needed to help households through this challenging period.

I refer the noble Lord to the answers given by my Rt. Hon. Friend the Minister of State for Business, Energy and Clean Growth to the Hon. Member for Battersea on 28 February to Questions 125466 and 125467. We need to ensure heat network consumers receive a fair price for their heating and that is why we are committed to legislating within this parliament to regulate the heat networks sector and in December 2021 we announced that Ofgem will take on the role of regulator. We will be giving Ofgem new powers to regulate prices in this sector as a matter of priority. This will enable equivalent protection for domestic heat network customers as well as ensuring heat network operators are securing good purchasing deals for their consumers. This will mean that consumers are charged a fair rate for heating whilst encouraging investment in heat networks.