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Posted by Ian Allan

Wednesday 17th November, 2021

Higher gas prices improves payback of heat network metering

Posted by Kirsty Lambert

Record high gas prices have made major news headlines over the last two months, with a handful of mainstream energy companies going bust, due to them not hedging against price increases. Unsurprisingly, this has led to a chain reaction, multiplying the payback of installing individual smart metering systems in homes connected to heat networks and demonstrating a solid investment for heat network owners.

In this blog we unveil key stats on why installing meters to heat networks has serious cost benefits.

Resident savings

This will be no surprise, but if supplies are sold upon individual usage, then behaviour towards consumption changes. Once metering is installed, residents typically save 35 to 50% on their bills where they have heat meters and pay only for the energy they use, rather than a fixed flat rate charge based on a share of the heat network fuel costs, as with unmetered properties.

In our experience, when residents pay based on their consumption – they start making conscious decisions about their energy use. We see behaviour changes, such as turning the heating off when they are out, closing windows and turning the heat down when unneeded. The resulting cost savings are even greater now that gas prices are around 250% higher than they were at the start of the year. While these prices may soften, forecasters don't expect gas tariffs to return to the low 2020 levels.

Compliance with the heat network (metering and billing) regulations

More than a third (more than 170,000) of homes connected to UK heat networks are currently unmetered, but Government legislation is driving a switch to cost and carbon saving heat meters.

The Heat Network Metering and Billing Regulations will mandate retrofitting of individual metering to most unmetered homes, wherever it is technically and financially viable – as proven using a cost effectiveness tool assessment.

With much higher gas prices, this assessment is now more likely to prove financially viable. Modelling we have put together using existing heat network data shows that with a 100% or 150% increase in gas prices, installing final customer meters will deliver big cost savings. We believe that actual savings will be much higher than those predicted by the Government’s assessment tool, which estimates the demand reduction benefit of smart metering and billing at 20%, while our experience shows that this is more than 35% and up to 50% in many UK social housing schemes.

Under the regulations, heat network suppliers should assess whether it will be compulsory to retrofit final customer meters or heat cost allocators in unmetered homes by 27 November 2021. Where metering is proved viable, they have less than a year (by 1 September 2022) to complete installations. At Switch2, we’ve been working with many providers across the UK to ensure that their heat network schemes are compliant in time for these key dates. You can find out how we supported Leeds City Council on one of their flagship schemes here.

You can find out more on how to ensure your heat network is compliant with the heat network regulations, by using the button below.

What can Switch2 do to help me?

  • Support the notification process or completely manage this for you
  • Provide site surveys to supply the information required to re-notify (e.g. address of the heat network, capacity, generation, number of buildings and final customers)

Key takeaways

  • Charging by meter consumption saves your residents money, reduces fuel poverty and reduces CO2 emissions
  • There is a tool to confirm if it is not practical to fit heat meters for technical or financial reasons
  • If you are not sure if your scheme is in scope of the regulations or you have any questions we would be happy to help

Meter2Bill

Our Meter2Bill service takes the strain out of the assessment process by us performing the on and off-site assessments required to get the right information for an accurate submission.

For support with the assessments, click here to find out more about the Meter2Bill service.

 

Kirsty Lambert

Business Development Director at Switch2

A skilled director and leader with both operational and commercial experience, Kirsty has over 10 years’ experience in the community and district heating industry.

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