The Government has provided clarification on compliance with the Heat Network Regulations following intervention by the European Commission (EC) on the UK’s cost effectiveness test. The EC’s cost effectiveness criteria have been delayed and consequently the government will be consulting early next year on its revised regulations. The Department for Business Energy and Industrial Strategy (BEIS) is working towards the launch of a public consultation on a revised methodology for assessing the cost effectiveness of metering for district and communal heat networks. The consultation will also seek views on some additional areas where the regulations could benefit from clarification following the first two years of implementation.

The Heat Network (Metering and Billing) Regulations 2014 require that certain heat suppliers to test whether it is cost-effective to fit heat meters in multi-occupancy buildings, and where appropriate, fit them by 31 December 2016. The Financial Conduct Authority (FCA) has confirmed that it would not be appropriate for fines to be imposed or other disciplinary measures in respect of a breach of the requirement at this time. Accordingly, a pragmatic approach will be adopted for any non-compliance with this requirement until a new tool and re-testing date is in place.

With the cost effectiveness tool currently being revised, no action is required by heat suppliers to test the cost effectiveness of heat meters and retrofit the installation of heat meters for existing heat networks. The regulations will be amended following the consultation. Fines or other disciplinary measures will not be imposed while heat suppliers are unable to comply with the regulations as they are currently drafted however the remaining obligations in the regulations are unaffected, for example new builds, major renovations and billing where existing meters are already in place. Following the consultation, BEIS intends to launch the new cost effectiveness tool and accompanying regulatory amendments later in 2017.


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