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Turning up the heat on district heating

pipes

Many of us don’t trust energy suppliers, but what if you were stuck with one supplier for as long as you lived in a property, with no control over the price you pay? This is the reality for many district heating customers.

More than 200,000 homes across the UK are connected to a district heating network. This is where heat from a central source is distributed to properties through a network of pipes. And its use is growing, particularly in built-up urban areas. The Government thinks district heating could provide heat to eight million homes by 2030.

There are benefits; it can be low carbon and there’s no need to maintain a gas boiler. However, there is currently very little protection for consumers living in properties connected to district heat networks. They have no choice in who they get their heat from. No access to an ombudsman should they have a complaint. And no control over the price they pay.

We’ve uncovered unacceptable detriment

Over the past year we have been conducting a major investigation of district heating. We spoke to customers on district heating networks, including those of you who shared your views here on Which? Convo. We found widespread dissatisfaction, with cost a major concern.

The people we surveyed had concerns ranging from worry that they had been mis-sold district heating, to confusion around what was included in their bills. Many of them felt let down and frustrated by poor customer service and complaints handling procedures.

It’s an emotive issue, as one private homeowner from London told us:

‘We are stuck between the supplier and the developers, with each blaming the other for the lack of hot water. All the while we … face numerous outages and so have to boil a kettle to wash or bath my two and a half year old in.’

We also looked at the cost of district heating and found a huge difference in the price paid by customers. Some were paying up to 25% more for their heating than if they’d been on a standard gas deal, and that includes all the additional costs of installing and maintaining a gas boiler. In many cases, district heating customers couldn’t understand why they were being charged a high standing charge, despite not having the heating on and using little or no hot water.

District heating – what’s the solution?

We have been working with the industry on Heat Trust, a voluntary consumer protection scheme. Heat Trust aims to replicate many of the protections available to those with gas or electric heating, such as access to an ombudsman and guaranteed standards of performance. However, as a voluntary scheme, it won’t cover all consumers and it won’t tackle the issue of fair pricing.

Access to affordable and reliable warmth and hot water is a fundamental right; we rely on it for comfort and health. Everyone deserves a fair deal and great customer service from their heat supplier. However, there’s a danger that district heating companies will take advantage of their unregulated, monopoly position.

We think the next government needs to step in to address the issue. It must look beyond ‘voluntary’ consumer protection and review fair pricing for district heating schemes, while heat suppliers should improve complaints handling and ensure pricing is transparent.

Do you have first-hand experience of district heating? Do you think the next government needs to step in to protect consumers?

Useful links

Read the report – Getting a fail deal for District Heating users [PDF]
What are my rights with district heating?

Comments
Guest
NO CHP THANKS says:
2 April 2015

You mentioned two benefits above, but I could not agree with them.

1. low carbon.

Will you please publish some detailed figures to support the fact? Thinking about being low carbon does not mean it is the reality. Given the amount of communal pipe work, I don’t think fuel efficiency on district heating net work can beat gas boilers. Probably you can reduce the carbon emission by using biomass boiler or CHP, but it would be great to see the actual figures rather than some theoretical suggestions. As mentioned in previous conversation, on the site I live, for a period of time, it was simply just running a big gas boiler, hence no carbon emission reduction. “can be” and “is” are different.

2. no need to maintain a gas boiler

That is not universally true either. ESCO are only responsible for issues up to the secondary network, but not tertiary network. In a lot of cases, there will still be a water tank in the flat with valves, controller setup. Cost of any issues still needs to be paid by property owners on top of the district heating service charge.

Also, we don’t maintain a gas boiler any more, but we do pay a service charge to get ESCO to carry out work on the communal facility. Compare to having full control of how much it costs in the Gas boiler case, I don’t think it should be called a benefit either.

So, there is NO benefits at all.

Guest

Thanks for raising these important points and you are absolutely right, it’s ill advised to make blanket statements about district heating. Some are performing well, while others are not.

Research suggests that district heating can reduce emissions but this is not always true. We uncovered evidence that suggests some schemes are operating inefficiently. We also found instances where biomass or combined heat and power systems had been installed to comply with planning regulations but had been turned off soon after the scheme started and the suppliers were using backup gas boilers instead. This is obviously unacceptable.

Your second point is also well made. Internal pipework and control systems may well be the responsibility of the occupant, and customers may have to pay a service charge for maintenance. This needs to be made clear to consumers before they commit to buying a property connected to district heating.

We’ll make sure that your points get raised when we discuss the future of district heating with the next government.

Guest
NO CHP THANKS says:
2 April 2015

I can show you a Faber Manunsell written report (or maybe AECOM, anyway, big consulting company) about how my site should work as well. They use this kind of things to get planning permission done. I guess that means you can find a copy of similar things about each site on council planning portal. What happens after the planning permission was granted is another story.

So your so called research is still theoretical research but not practical comparison finding. I still need to carefully read the paper you provided, but in brief, I don’t even see comparison and discussion about heat losses on network in section 3, then how do you come up with the conclusion that it would be carbon reduction without knowing fuel to heat efficient ratio? From other papers I read, this network heat loss number varies a lot, that changes the result a lot.

Your findings are great, but I still think it would be better you could treat theoretical report differently from actual readings on sites.

I am not saying it is completely wrong saying district heating could help reduce carbon emission, but I just think this statement deserve a lot of careful examination and checking. Unless ESCO disclose data to you on sites in operation, I guess all the “potential”, “theoretical” papers does not mean much really.

Also, even in the case that you see carbon emission reduction compare to the old standard or government quota, you got to be careful checking what exactly the driver is. As you reported, buildings are much better insulated nowadays, so is it DH caused carbon emission reduction or simply better technology on insulation etc enabled people to use less?

Guest
Robert C says:
25 May 2015

A scheme I am aware of in a nearby city uses waste heat from burning rubbish, used by several local councils. While it may still create CO2, at least it is not using fossil fuel. So it saves those for another day, which is better than nothing. As to the efficiency, true it will be lower if the incinerator is far from the homes it heats.

Is the issue of charges like any other lease? You don’t own it, so what are the charges now, and how are they reviewed? I like the idea of district heating especially if from waste, but feel it is better suited to schools and hospitals – those big enough to fend for themselves, backed by the council that gave the planning permission. (or even council offices)

Guest
John G says:
22 June 2015

The potential benefits from district heating (DH) are not simply theoretical, look at Aberdeen, Glasgow, and any number of large scale UK DH programs and you’ll find the actual cost savings and service improvements are pretty impressive (with around 50% CO2 reductions). DH itself (as well as consumer protection) in the UK is in its infancy, the fact is we tried it here years ago (in particular after the London Blitz), and it was a disaster. This was not due to the theory of DH, just poor implementation, for DH to work it needs to be done well, but once implemented the savings are huge.

As some of you may remember there was a big fuel crisis in 1979, which caused prices to rocket. In Denmark at the time the majority of fuel was imported, and they basically ran out of money and had a really tough winter. The result was a financial and comfort based incentive for DH. The important thing here is that the incentive worked for both the residents AND the government, in effect public opinion towards heating changed. Denmark installed huge amounts of infrastructure and now absolutely leads the world in DH, if we want to sort out UK DH, we should look to Denmark.

Just to address the issue you raised about the low carbon aspect, DH is useful because the pipework (once installed), can be used by any heat source. The the most likely course will be to start off with CHP (where you produce electricity and then harvest the byproduct heat), as well as any current forms of fossil fuel sources of heat (you can connect DH to an industrial estate and harvest the heat that would otherwise just be sent up into the atmosphere, whether this would count as ‘free heat’ or not is up to you, but clearly this saves carbon emission when compared to burning gas in your own flat), and then over time the source of heat can be changed to low carbon sources.

The real issue here is that DH only really works on large scales, that’s when you’ll see savings on costs, and huge carbon emission reductions. As I say the UK isn’t very far along, but examples of successful systems such as Stockethill – Aberdeen, and Maryhill – Glasgow (to be honest right now Scotland is doing much better in terms of future DH projects than the rest of the UK), you’ll see that DH really can deliver on its promises.

Talking specifically about people not seeing cost savings after being connected to DH, I would just say that DH is a player in a larger playing field. How well insulated is your home? How much control do you have on your energy usage? How is your usage defined? The UK government has recently made is obligatory of flats on DH networks to install individual energy meters in each flat/house. This means you can say exactly how much energy you’re taking out of the DH system, and can be billed accordingly.

I completely agree that the government is lagging behind in terms of legislating for consumer protection, there’s no excuse. I would just say that DH itself is a good idea, successfully implemented in countries like Denmark. The onus here should really be on the government/OFGEM to regulate this growing market.

Guest
Heat Trust says:
2 April 2015

As mentioned in the blog, Heat Trust is a major new initiative to protect the interests of householders and micro businesses connected to heat networks which is soon to be launched . Please visit http://www.heattrust.org for more information.

There are over 2,000 heat networks in the UK, numerous schemes have already registered their interest to join, however there is no single list of all these schemes that we can use to invite suppliers to join.

So if you are a district heating customer, please help us by checking with your supplier if they intend to register or email us the name of your scheme and supplier.

Guest
NO CHP THANKS says:
2 April 2015

I found this interesting.

You are calling yourself Heat Trust now, but it is actually previously called “Independent Heat Customer Protection Scheme”.

Guess who was sitting on top of the steering committee last year? Barratt and EON, if you want to have screenshot as proof, do let me know.

If you guys are serious about this, then disclose all cost properly to your customers please. Otherwise, I guess the trust you get from customer is as little as before.

Also, it is not free to join the trust right? So, we pay EON and EON pays you and you are partially steered by EON? Please don’t under estimate the intelligence of general public.

Guest
Heat Trust says:
7 April 2015

Thank you for your comment. The Independent Heat Customer Protection Scheme was the body that presented the proposals to the Department for Energy and Climate Change that were taken forward as Heat Trust.

For reference, the IHCPS steering committee was made up of a number of other district heating operators, the Department for Energy and Climate Change, Scottish Government, Which?, Citizens Advice, lawyers and trade associations. Interested parties were invited to join the committee to ensure that the Scheme would be able meet the needs of various different heat customers.

Heat Trust will operate with an independent and impartial steering committee, with members from a wide range of backgrounds, which is governed by rules that will be made publicly available on the Heat Trust website in the coming weeks.