Heat Networks: Finance
The question
To ask the Secretary of State for Energy Security and Net Zero, with reference to the recommendations on the use of long-term revenue support mechanisms such as Regulated Asset Base models and Contracts for Difference within the of the ADE: Heat Networks' Clean Heat 2040 report, whether she has considered applying such a model to a demonstrator city, such as Bath.
Answered by Martin McCluskey
A Regulated Asset Base (RAB) model allows a regulated monopoly to earn an agreed level of revenue, as used in sectors such as water. Planned Heat Network Zoning Regulations will deliver a similar effect by granting zone developers exclusive rights within designated areas, with tariffs agreed with the responsible local authority to enable an appropriate return.
Further work is required to assess the effectiveness of these models relative to zoning and existing capital support, and it would not be appropriate to introduce a demonstrator city at this stage.
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