With more stringent oversight of heat networks around the corner, Jarrad Bedford of Insite Energy shares some tips for reducing residents’ energy bills.
It shouldn’t be news to any heat network operators that the legislative landscape is set to change significantly over the coming years as Ofgem takes over as the sector’s regulator. We can expect to see new technical standards and stronger consumer protection measures all designed to improve services, lower costs, and reduce emissions.
This means housing providers with significant influence over heat network operations and/or heat supply will be under more scrutiny than ever before. They’ll need to provide transparent, benchmarked pricing and service information to both their residents and Ofgem, demonstrating that every penny charged is used effectively to offer best value for bill-payers. Enforcement measures may include external audits, financial penalties or cancellation of licenses in cases of serious transgressions.
When you consider most UK heat networks currently run at only 35-45% efficiency, with 55-65% of their heat lost before it reaches users*, it’s clear the new rules will have a significant impact. Householders, the environment and the heat network sector itself all stand to benefit. So, the changes are to be welcomed.
But how should organisations prepare for the new regime?
Prioritise maintenance
Above all, ensure systems are working optimally and being properly maintained. A heat network is a bit like a luxury car; it’s a high-value, expertly engineered asset needing skilful and consistent servicing to safeguard its performance, reliability and longevity. If not looked after well, its efficiency will deteriorate leading to unnecessarily high energy bills and emissions. Repair and replacement cycles will shrink, too, pushing up equipment costs. Not to mention the fact that a poorly running system just won’t keep people warm enough.
Good maintenance is therefore essential to meet Ofgem’s pricing and quality of service targets. Ideally this should be done via a planned preventative maintenance (PPM) contract with a heat-network-specialist supplier covering every aspect of the system, including meters and heat interface units (HIUs). As well as being good practice, proactively preventing problems will also help keep unplanned service interruptions below Ofgem’s new proposed limit of four per year.
When appointing maintenance operators, check they have a good working knowledge of CIBSE’s CP1 for Heat Networks: Code of Practice 2020, as well as a sound understanding of the changing regulatory landscape and the Heat Trust’s consumer protection standards.
Measurement matters
Another essential aspect of heat network management that goes hand-in-hand with maintenance is data monitoring. Accurate, accessible, timely and detailed performance data from smart meters and sensors at key points across a heat network is the bedrock of managing energy efficiency. Only by looking in detail at the data can you get a clear understanding of what optimum functioning looks like so you can pick up faults and inefficiencies quickly.
This can be done remotely using cloud-based services, which can also help to diagnose and even fix some issues without the need for site visits, keeping repair costs lower and minimising disruption for residents. Smart technology can be used in plant rooms and across networks to respond to changes in demand and environmental conditions too, reducing network losses.
Empower people
Heat networks are unique in that the energy habits of any one household can have cost implications for everyone connected to the system. This means it’s simultaneously both very important and particularly difficult to influence residents to adopt more efficiency-conscious behaviours. Afterall, why would someone bother to turn down their thermostat if their bill is going to increase anyway because their neighbour has theirs extra high?
One solution to this dilemma already widely used to great effect in Europe is motivational tariffing. This offers residents financial incentives to perform desirable actions such as lowering their hot water temperature or booking appliance service visits. Thus, collective benefits translate into visible savings for individual households, transforming the way users perceive and interact with their energy consumption.
Even just giving residents access to detailed, real-time usage data in a convenient way such as via a smart pay-as-you-go (PAYG) metering system combined with a web-app on their mobile phone, reduces energy use by an average of 24%. Because, when people can see and control their energy usage, they consume less. This will also likely help with meeting Ofgem’s proposed transparency and customer communication requirements.
Don’t power down
Another tip to lowering energy bills for everyone is to keep heating running on a low setting in vacant residences. This may seem counterintuitive as, to save energy, we’re often told to turn things off if we’re not using them. However, restarting heat network systems takes time, and there’s a risk of distribution-pump seizure or network-water contamination, making equipment less efficient. You may also get damp or mould if temperatures drop below 16°C.
Instead, factor the cost of void properties into residents’ heat tariffs or maintain a contingency fund to cover it. Metering and billing providers can usually assist with this.
Listen to experts
When big regulatory changes occur, it’s wise to keep in close contact with your suppliers. Make sure everyone understands who’s doing what and what’s needed from you to best support you. Lean on contractors with heat network expertise to help you reduce costs and get the most from your equipment. And do heed their advice. We regularly provide clients with recommendations to reduce improve efficiency. We wouldn’t suggest these if the cost/benefit ratio wasn’t compelling.
This is a pivotal moment for heat networks, which play a crucial role in the UK’s net zero strategy due to their ability to deliver efficient, low-carbon heat at scale. The new regulations could be transformative, accelerating the realisation of this potential for the benefit of all.