CIH Northern Ireland response to Department for the Economy’s consultation on Heat Networks

The Chartered Institute of Housing Northern Ireland (CIH NI) welcomes the opportunity to respond to the Department for the Economy’s (DfE) consultation on Heat Networks. 

While heat networks are relatively uncommon in Northern Ireland at present, it is widely accepted that they can play an important role in reducing carbon emissions from heating. According to the DfE, heating currently represents about 44% of Northern Ireland’s energy consumption. It is clear there is a growing need to explore alternative, cost-effective, low-carbon sources of heating to achieve decarbonisation and net zero ambitions. We welcome the DfE’s commitment to carrying out research to establish where heat networks will be most effective, and its acknowledgement of the important economic benefits and job creation opportunities linked with the expansion of the heat network market.

Given the considerable shift that these regulations represent for Northern Ireland, and the growing number of people who will be connected to heat networks in the coming years, it is vital that heat network regulations provide the greatest possible protection to customers and create a stable, financially viable regulatory environment for heat networks to operate. 

Fuel poverty is an ongoing crisis – 24% of households in Northern Ireland are living in fuel poverty. This means that almost 180,000 households are estimated to spend at least 10% of their income on energy bills, and these high costs disproportionately affect lower-income homes. As the heat network regulations continue to develop, it is essential that people in or at risk of fuel poverty, and/or who have cold-related vulnerabilities, are adequately protected. We therefore welcome the proposals from DfE on clearer information and guidance for consumers, and a code of conduct for suppliers to strengthen consumer protection and increase engagement with heat network customers. As we have noted in response to question 4 below, if this approach is taken forward, it will be important to ensure that clear, consistent information is provided to consumers about the three-step process to ensure they understand the route, and who they should contact with an issue in the first instance.

Consultation question 1 (scope) Do you agree with the types of heat networks that should be covered by these rules, and the types that should be out of scope?

Yes, we agree with the scope of the heat networks covered by these rules, as outlined in the consultation document.

Consultation question 2 (authorisation) Do you agree with using an authorisation regime (rather than licensing) for heat network operators, including an automatic “deemed authorisation” for existing networks?

Yes, we believe this is a sensible approach that allows for growth of the sector in Northern Ireland and avoids an overly onerous administrative entry burden. The growth of heat networks in Northern Ireland is a positive ambition, and it would help to support the transition to lower-carbon heat and provide opportunities to improve energy efficiency and the reliability of heat supply. A sensible authorisation regime should help facilitate this growth while ensuring appropriate standards and protections are maintained.

Consultation question 3 (metering and billing) Do you consider that the existing approach to metering, billing and exemptions (as set out in the HNMBR) remains appropriate for the NI market when implemented through the proposed authorisation framework? If not, what changes would you propose?

Yes, we consider this appropriate.

Consultation question 4 (complaints) What are your views on the potential benefits and risks of the illustrative three-step complaints route (operator → CCNI → UR for rule-compliance issues)?

We believe this is a sensible approach that will ensure the customer’s voice is heard and complaints are dealt with in a constructive manner. 

Consultation question 5 (complaints code of conduct) Do you agree with the proposal that heat network suppliers should have a Code of Conduct developed with CCNI and the UR as an authorisation condition?

Yes, we agree with the establishment of a code of conduct for heat network suppliers. This is important to ensure robust consumer protection, adequate accountability for suppliers, a level playing field for the market, and therefore peace of mind for heat network customers. 

Consultation question 6 (public register and information) What information should be included on a public register of heat networks, and what additional low-cost information from suppliers, CCNI and the UR would help customers understand their heat network service?

We believe a public register should contain information on the heat network suppliers, the heat network location, the type of development (e.g. social housing development, mixed tenure and commercial premises) and the average cost per resident. This will allow for more accurate information gathering to inform policy as the heat network sector continues to develop. 

Customers should be informed about best practice for using their heat network service, i.e. how to minimise costs and maximise heating efficiency. They should also receive clear information about their consumer rights, the complaints process, and helpline contact information. Information should be provided in hard copy, digitally, and over the phone if required. Suppliers, the Consumer Council for Northern Ireland (CCNI) and the Utility Regulator (UR) should be mindful that some customers may require more involved support and contact via phone rather than email/post. 

Consultation question 7 (other comments) Do you have any other comments on how the Department should exercise its powers under the Energy Act 2023 to deliver a proportionate and effective heat networks regulatory framework for Northern Ireland?

CIH has been closely involved in the development of heat network legislation in England, which has produced both positive outcomes and lessons to be learned. As the heat network regulatory framework in Northern Ireland develops, CIH would welcome the opportunity to engage with DfE to share learning and experience from the English regulatory rollout. We believe this could provide a valuable space for knowledge exchange and help support the long-term viability, effectiveness, and success of heat networks in Northern Ireland.

Heat networks are relatively well established within the social housing sector in England, with approximately one in 12 social housing residents currently living in a property connected to a heat network. In contrast, the sector is considerably less developed in Northern Ireland, with more limited uptake among social housing providers. However, given the DfE’s legislative ambitions around decarbonisation, it is reasonable to anticipate that social housing providers may increasingly be encouraged to consider heat networks as an alternative, lower-carbon source of heating for new and existing developments.

CIH believes that early and meaningful engagement with the housing sector will be important in supporting the successful development and rollout of heat networks in Northern Ireland. Drawing on the experience of England, early engagement would provide an opportunity to identify and address potential challenges at an early stage, while ensuring that the needs and experiences of social housing providers and residents are reflected in the emerging regulatory framework. This could help facilitate a smoother rollout and avoid some of the issues that have emerged in England.