Heat Network regulations – updated guidance for heat network operators

16th April 2021
In 2014, the Department for Business, Energy and Industrial Strategy (BEIS) published the Heat Network Metering and Billing Regulation (HNMBR) in response to the EU Energy Efficiency Directive (EED). The regulations aim to drive energy efficiency and transparency within heat networks to ensure that customers can monitor their energy usage.

On 27 November 2020 these regulations were updated, if you operate a heat network you must now carry out an assessment to see whether you need to install heat meters and bill the end-users based on their actual consumption. The purpose of the assessment is to determine the cost-effectiveness of heat meter installation and is part of a drive towards decarbonisation of heating in the UK.

What is a heat Network and am I captured by the legislation?

If you are the owner of a heating or cooling system that supplies heat and/or cooling to more than one end user, and you charge those end users for the supply of heating, cooling or hot water then you are operating a heat network. There are two types of heat network:

• District Heat network: Heat is supplied to multiple buildings from a central system. This could include city-wide schemes or could be on an industrial/commercial estate where buildings are sub-let to tenants (these are just 2 examples).
• Communal Heat network – This is a heating system within a single building that has more than one tenant. An example would be an office building occupied by multiple businesses, managed by a property management company.

The legislation will not apply to all owners of heat networks in the same way. BEIS has introduced three building classes to define who will be required to install heat meters.

Viable – Those who must install heat meters.

• Buildings connected to a district heat network since 27 November 2020.
• An existing building where the building is supplied by a district heat network and on or after 27th November 2020 the building undergoes major renovations relating to the technical services of that building.
• Buildings connected to a communal heat network on or after 1 September 2022.
• Buildings within a district heat network where meter installations have previously been mandatory.

Open – Must complete an assessment to determine if they should install heat meters

• Newly constructed building with a communal heat network (which does not fall in the exempt class) connected on or after 27th November 2020 and before 1st September 2022.
• New buildings connected to a communal heat network after 1 September 2022 that are used for social housing or purpose-built student accommodation or have more than one entry points for pipes.
• Existing buildings where heat meters or heat cost allocators are installed in all private dwellings or non-domestic premises within that building.
• All other buildings that do not fall into the other classes.

Exempt – no action necessary

• New buildings (connected to a communal heat network after 27 November 2020) and existing buildings not consisting mainly of private dwellings where heat is supplied by a system other than hot water or the cooling distribution system uses a transfer fluid other than water (unless viable).
• Existing buildings used for social housing or purpose-built student accommodation (unless in the viable class).
• Existing buildings covered by a lease that contains a provision that prevents billing based on metered consumption.

What are the deadlines?

Heat network operators need to carry out an assessment of the cost-effectiveness of installing heat meters and update the Office for Product Safety and Standards (OPSS) by November 2021. Many will require the assessment to be carried out by a third party such as an energy management expert so this isn’t something that should be left until the last minute.

If the assessment concludes that heat meters will be cost-effective, then the operator must have them installed by September 2022.

If heat meters are installed, then the network operator will need to amend the way they bill tenants for heat.

Since this regulation is a legal requirement the OPSS will have enforcement powers, including the ability to issue fines for non-compliance.

A sustainability opportunity

A net-zero carbon future is becoming a key priority for UK businesses and customers alike (and the UK government). The HNMBR provides a pathway for reducing carbon emissions in heating through the metering and billing of heat networks within the UK. Both landlords and tenants may see the installation of heat meters as an opportunity to measure their carbon emissions and take action to reduce their impact on the environment.

Inenco can help

Our solutions team can carry out the heat metering cost-effectiveness assessment and produce the notification document for OPSS along with an evidence pack on behalf of the owner of the heat network. This will have one or both of the following outcomes:

• Heat meters not required – Inenco will provide proof of calculations which can be used as evidence should OPSS carry out an external audit.
• Heat meters required –Inenco can provide project management services if required for the installation of the meters.

Inenco is also supporting customers and tenants on billing methodologies and accuracy, but these are likely to be more ad-hoc and are unlikely to be needed before the end of 2021 or the start of 2022.

To find out more about how Inenco can help please contact us on 01253 785294