In January I wrote a post about the fact that, contrary to expectations, no meters will be retrofitted under the new Heat Network Regulations. This is because the assumptions in DECC’s meter viability tool mean almost no install will pass the financial viability test.
After hitting publish on that post, things moved pretty fast.
The next day (thanks to Nicholas Doyle) I was standing in front of people from DECC and the NMO, talking them through my calculations and data. The fact that the viability tool almost always says “no” didn’t seem to surprise them. But it appeared to come as a shock that many meter installs become viable as soon as you change your assumptions about heat losses from networks to bring them in line with real-world performance.
The viability tool assumes all networks only have 10% heat losses, when in reality unmonitored networks suffer from much higher losses than that. Once I’d taken them through anonymised performance data from a number of schemes, it was clear that a lot more domestic heat meters should be installed under the new regs than the tool indicated.
I get the impression that after that first meeting and a follow-up meeting in Whitehall, there was a fair amount of discussion between DECC and Aecom, who built the meter viability tool. But the result of that discussion wasn’t clear until last week, when I was in the room for an NMO presentation about the new regs.
In that presentation, the man from the NMO hinted that there would be some changes to the tool in future. I sat right up in my chair when I heard that. Had a blog post influenced government policy? I asked him to tell us more and he conceded that the changes were likely to include the efficiency assumptions.
The next question was when? If the changes came in before the December 2016 deadline (by which all heat providers must assess their schemes for meter viability), it could have a huge impact, giving many more households control over how much they spend… and costing heat providers quite a lot in capital expenditure.
But from his diplomatic response, it was pretty clear that there wouldn’t be changes to the assumptions in the short term. Apparently, no one is keen to saddle heat networks with additional costs in the absence of clear policy or regulations.
Sadly, not much had changed after all. Fitting meters to existing homes will have to wait… for now.
Great stuff Casey.
Accidentally-on-purpose making unrealistic initial assumptions about network efficiency to defer the impact of the EED until you’ve got a better idea of the impact it will have isn’t daft.
Whitehall ought to receive this data in April (compulsory duty to notify). In practice it may be summer before the majority have notified. For probably the first time Whitehall will know how many schemes are affected and Whitehall will also be given the heat network operator’s assessment of the efficiency of their network. Hopefully they publish this dataset.
6 months to brief the network operators before the deadline? Short but doable. I think it’ll be more like 9 months before the assumptions are changed: many won’t have budget available in this financial year to install meters but could make the case for adding it to budgets beginning January 1st 2016 or April 1st 2016? (the latter being more common in the public sector)
The alternative is cash strapped network operators panicking and locking themselves into highly unfavourable decades-long billing and metering contracts with one of the “pay through the nose later” providers. This doesn’t favour the customer.
Hi Marko,
Regarding the scheme information that will be pouring into DECC any day now – unfortuatnely, I think that the vast majority of heat suppliers are just going to use assumed data as they probably just don’t know any better.
In fact, I wouldn’t be surprised if a lot on the notifications are completed by the same consultants that provided the design parameters in the first place and live in the “10% network losses” fantasy world.
I would also imagine that the DECC’s policing of the system may be so soft-touch (i.e. someone will just plug the numbers into a database without questioning) that there won’t be much incentive for heat suppliers to do anything more.
DECC will obtain the signatures of every heat network operator assuming 10% losses (or consultants claiming 10% loss estimates are appropriate to this particular network) though.
Some will be genuinely ignorant. Others will be wilfully ignorant. Either way DECC gets a reasonably comprehensive list of every operator and consultant that one could well argue aren’t competent.
If the entire dataset isn’t published as a matter of course, Danish style, would it be cruel to encourage residents groups to file freedom of information requests?
First from DECC for the claimed operating performance of the heat network as claimed by the operator.
Then from the operator for the justification of the claimed performance figures.
Then publish the written responses in a central repository as they ought to have been in the first place, as per electricity and gas networks?
Excellent Casey. Always nice to see they are willing to look at it again. This also moves on to the costs they have included for meters and data collection. This does not reflect what meters and systems can be procured for in the UK. They are much higher in the tool which for some suppliers might be fine but we have found many sell hardware much lower.
Nice blog Casey and shame they aren’t prepared to change the initial assumptions sooner. 10% is a ridiculous assumption my current top in-use metered losses is 60%, beat that! Or better still actually provide a UK example that’s working really well. It can be done! It would be good to hear your thoughts on IHCPS http://www.heatcustomerprotection.co.uk/ when you get a chance
Hi Tom,
I had a quick read through there website and couldn’t really see much that isn’t already covered within the new Regs.
60% is pretty impressive. What about a game of Communal Heating Top Trumps next time we meet?