Heat Networks: Price Caps
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment he has made of the potential merits of introducing a price protection mechanism for domestic consumers connected to heat networks, comparable to that provided by the Price Cap for domestic gas and electricity customers.
Answered by Martin McCluskey
Heat networks buy the energy they need through commercial contracts and the price they charge domestic consumers reflects these individual contract prices and the energy efficiency of each heat network. Applying a price cap therefore risks being ineffective for consumers, if set to high, or supplier insolvency, if set too low.
The Department has provided the heat network regulator, Ofgem, with broad powers relating to heat network price regulation. These include powers to investigate and intervene where heat network prices charged to consumers are disproportionate or unfair.
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