The key to Heat Network growth: satisfaction for customers and investors alike

Blog post by Richard Cave-Bigley, Head of Distributed Energy for SSE Enterprise Utilities

Recently I spoke at the Westminster launch of the Association for Decentralised Energy’s (ADE) Heat Network Task Force report - which comes at a pivotal moment for the heat networks sector. With a CMA market study underway the spotlight is now on companies such as ours to ensure that we continue to manage our heat networks in a way that keeps every customer happy.

SSE was invited to provide a supplier’s viewpoint. I therefore had the opportunity to present our thoughts, alongside the Minister for Energy and Clean Growth, Claire Perry MP, and the ADE’s Vice President James Heappey MP. There was widespread support in the room for the recommendations made in the Task Force report, containing a series of proposals to increase inward investment and improve customer satisfaction through increased regulatory certainty.

We invest in and manage a growing number of heat networks whilst serving several thousand customers, and we were a founding member of the Heat Trust Scheme which brings a welcome level of consumer protection to the industry, so the proposed industry developments will have significant importance to us. As the Head of Distributed Energy for SSE Enterprise Utilities, it is my role to seek out innovative ways to bring local, low carbon and low cost energy to end users, so I was only too pleased to be invited by the ADE to represent a supplier’s view of the coming changes.

District Heating is one of the more important solutions available to the UK economy in achieving its decarbonisation aims. Today, we have less district heating here in the UK than in parts of continental Europe, and the market has a lot of room to grow over the coming years. To make this happen, we need to focus on driving up standards for the customer and making sure investors feel comfortable.

For end-customers, we recognise that whilst the current voluntary framework of service standards has been a good step forward, we as an industry can still improve significantly on the level of customer service satisfaction that can and should be achieved. We agree that improving the customer’s trust in the industry, whether it be in pricing, in system reliability or even in the ability to choose suppliers, is of highest priority.

Regulatory frameworks need to provide the necessary conditions for greater investment. A capital-intensive market such as this will increasingly rely on more and different sources of inward investment to achieve an acceptably sustainable growth rate. However, the investment community, particularly those not familiar with heat networks, will be cautious.

So a firmer regulatory platform, demanding some of the performance obligations associated with other regulated energy networks, is a must-have. Coupled with increased powers (for example in relation to pipe wayleaves) and, crucially, coupled with the kind of demand guarantees recommended by the Task Force; this could provide the stability to attract a far greater diversity of investment than we see now.

The Task Force report provides a blueprint for all the improvements that can and should be made to enable market success. It keeps everyone’s eyes on the ultimate prize which is peace of mind for customers and investors alike.