Is your district heating system legal?

Rupert Mackay, Managing Director of Data Energy, takes a look at the new Heat Network Regulations.

 

The Heat Network (Metering & Billing) Regulations 2014 became law last year, with specific implementation deadlines in 2014, 2015 and 2016. After registering, four-yearly notifications to the government’s National Measurement Office are required. So what does this mean for managing agents, developers, landlords and residents?

 

Game changing new legal duties

Residents of apartment blocks and regulators both demand greater energy efficiency and accountability. These expectations led to the introduction of the Heat Network Regulations in December 2014. Under this law, landlords and developers that provide heat to residents and lessees through a district heating system are legally seen as the heat supplier. As managing agents are responsible for ensuring that their clients comply with relevant legislation, they will need to undertake the statutory notification on behalf of their clients.

 

The law reflects developments in heat supply. Whereas electricity is delivered in its final usable form and is tightly monitored, heat has typically been delivered as gas or oil supply and converted by boiler plant and HVAC systems into heat, chill and hot water. District heating changes this. Heat is supplied in its final form, either to the building itself or to the resident in their apartment. But because this is relatively new, it’s been unregulated up until now. This new UK law is a game changer and will help to raise standards of accountability for heat networks.

 

The best managing agents and their clients will see beyond the initial administrative, investigative and capital burden to treat this as an opportunity to make buildings more efficient, resulting in lower energy bills. After all, the Heat Network Regulations were formulated in response to the EU Energy Efficiency Directive which is driving forward environmental improvements. It’s known as the 20 - 20 - 20 targets which were set for the year 2020:

 

  • 20% reduction on 1990 greenhouse gas emissions

  • 20% share of energy consumption from renewables

  • 20% improvement in energy efficiency.

     

    Managing agents shouldn’t be afraid to get help because the new law is full of complexity. Non-compliance is a criminal offence. Failure isn’t an option when there are fines of £5,000, and reputation risks.

Are you ready?

Multi-customer building: Building level meters should already be in place for buildings with more than one final customer to measure heat, chill or hot water supplied from a district heat network.

 

Single customer building: For buildings with just one final customer, a viability assessment must be completed with individual meters installed by the heat supplier to measure the heat, chill or hot water supplied where required from December 2014.

 

New or renovated building: There is a mandatory requirement for meters to be installed to measure heat, chill or hot water for final customers where district heating is connected to a new building or following a major renovation.

 

This year - December 2015 deadline

Those supplying and charging final customers for heating or cooling through a network must notify the National Measurement Office, part of the Department for Energy and Climate Change, by 31 December 2015. To do this they must have accurate records of their heating scheme including meters. After December 2015, if bills are based on inaccurate metering information, this will be a criminal offence, which may result in a fine upon conviction of up to £5,000.

Next year - December 2016 deadline

Individual heat meters are required for each final customer supplied by district or communal heating, except where assessments show that installation is not viable. Where meters aren’t feasible then the next step is to complete viability assessments of Heat Cost Allocators (HCAs) with hot water meters. All individual level assessments and any installations must be completed by the end of December 2016.

 

Where meters are installed, the heat supplier must ensure that final customer bills and billing information for heating, cooling and hot water is accurate, based on actual consumption and compliant with the rules. Organisations which provide energy efficiency measures must include information such as current energy prices, consumption and contact information in the bill.

 

Future risks and rewards

If a heat supplier fails to provide accurate consumption data at a final customer level, then they will be in breach, subject to criminal proceedings and will face a fine if convicted. In contrast, with accurate metering, improved usage information and greater individual control over heating comes the potential to increase efficiency and reduce bills. Going forward the registration and assessment process must be completed at least once every 4 years to ensure heat metering and billing keeps pace with any changes.

 

BOX OUT

Seven ways to beat the new Heat Network Regs

 

  1. Turn legal rules into efficiency plans
  2. Meet mandatory metering standards
  3. Avoid £5,000 heat metering fines
  4. Complete meter viability tests
  5. Register district heating networks
  6. Ensure accurate tenant billing
  7. Achieve efficiencies and savings

 

END BOX

 

[footnote] Rupert Mackay is the managing director of Data Energy

 

Managing Agents, Developers and Landlords can get help to assess the impact of the new Heat Network Regulations, register their scheme and ensure accurate bills for individual residents by contacting Data Energy on 01279 810120 or visiting www.dataenergy.co.uk

 

This article first appeared in the Flat Living Live! show guide in July 2014.