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Regulatory changes to district heating systems mean new opportunity

With changes to regulations for the metering and billing of district and communal heating networks come new business opportunities for mechanical and electrical (M&E) contractors.

The EU has committed member countries to efficiency improvements of 20% over 2012 levels by the year 2020. Enter the Heat Networks (Metering and Billing) Regulations 2014, which were designed to empower end users of communal heating systems to better manage their energy use through the installation of individual heat energy meters and free access to consumption data.

For new builds and existing networks undergoing major renovation, the installation of user-level meters has been mandatory since December 2014. By 31 December this year, all heat suppliers must complete a Department of Energy & Climate Change (DECC) notification and data collection exercise for the networks they operate. Retrofit installations of heat meters must be completed by 31 December 2016.

There are, however, planned construction projects that do not comply with the new requirements, as well as heat suppliers of existing individually metered systems who mistakenly believe their current level of customer energy reporting is compliant.

As an example, much student accommodation continues to be designed without individual property meters and unfortunately systems where residents pay a share of the cost of heat no longer conform.

M&E contractors have an important role to play in appropriately advising their developers, managing agents, universities and housing association customers, particularly as the result is an opportunity for heating contractors to sell meter installation services. This will be a growth area in parallel with the increase in heat networks in general.

It is worth noting that, typically, the people within these organisations who commission M&E work – defined by DECC in this context as “heat suppliers” – are often the least well informed when it comes to this new regulation.

Any new process change and increase in build cost is likely to be met with resistance, but the regulations should not be considered burdensome. Heat suppliers will, in most cases, benefit from the adoption of modern meters as well as best-practice energy consumption reporting and billing practices. Clear, accurate consumption data helps providers run their networks more efficiently by identifying sources of loss or inefficient operating practices, while the latest meters allow residents’ payments to be collected more easily and quickly and, with managed payment plans, enable the eradication of historic heat debt.

Most meters allow for flexible payment methods, increasingly using the pay-as-you-go model, with credit limits individually configured by property according to differing debt risks.

Contractors can also add value by ensuring metering and data reporting methods comply with the new legislation; for example, by promoting the use of check meters and the specification of conforming meters and undertaking good installations.

Peter Westwood is the managing director of Insite Energy

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