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Heat Network
(Metering and Billing)

A heat network (which can also be referred to as district heating) supplies heat or cooling to consumers. This heat or cooling is supplied through the transfer of chilled water, heated water, or steam which is produced at a central hub and distributed via a network of pipework.

A large range of technology can be utilised at the central source of production. Some examples of this technology can be:

  • Combined Heat and Power (CHP) plants.
  • Boilers fuelled on gas, oil, biomass and more.
  • Shared air, ground, and water source heat pumps.

The HNMBR (Heat Network (Metering and Billing) Regulations) were first implemented in 2014. The Regulations are mandatory and enforced by the Office for Product Safety and Standards (OPSS), part of the Department for Energy, Security and Net Zero (DESNZ).

The main purpose of the HNMBR is to increase energy efficiency and decrease carbon emissions from heating throughout the UK, with a large focus on domestic and commercial tenanted buildings. 

The Regulations focus on the metering and billing of heat networks and are applicable to the majority of district and communal heat networks throughout England, Scotland, Wales and Northern Ireland. This covers most networks in the residential, commercial, industrial, and public sectors.

As the Regulations will ensure heat suppliers install the required metering devices and issue billing based on consumption, consumer awareness of energy consumption will likely increase, encouraging lower energy usage and therefore reducing the carbon emissions emitted from heating.

Any legal entity, whether that be a person or an organisation, who is classified as a ‘heat supplier’, must comply with the Regulations.

A heat supplier is classified as an entity who supplies and charges for heating, cooling, or hot water via a heat network.

However, this charge is not limited to a direct bill. It can also encompass supply of heat as part of a package; paid for indirectly through rent, ground rent, a service contract, or other means.

Under the Regulations it is required that heat network operators must notify the Office for Product Safety Standards (OPSS) about their networks every four years and, where determined economically and technically feasible to do so, install heat metering devices on those networks.

A notification must be submitted before or on the start date of operation.

A notification must include information based on the network’s:

  • Location
  • Capacity
  • Building Classes
  • Meters
  • Billing

Since the Regulations implementation in 2014, they were amended in 2020. The most significant change relates to how a heat supplier must achieve compliance with the regulations.

These amendments introduced building classes, which now means that heat suppliers must define the class of each building on their network. There are three building classes stated within the Regulations, which are: Viable, Open and Exempt.

The purpose of these building classes is that dependent upon which class a building falls into will determine if a heat supplier needs to install customer meters.

Building classes also determine whether a cost-effective/technical feasibility analysis is required regarding the installation of customer meters within Open class buildings.

In order for heat suppliers to have enough time to comply with these amendments, the Government introduced transitional arrangements, which came into force on the 27th of November 2020 and ended on the 1st of September 2022.

These transitional arrangements have now ended; therefore, all heat suppliers should comply with the new changes introduced within the 2020 amendments.

Yes, the requirements of what information should be reported within a notification will change based upon the type of heat network.

This is because there are different requirements relating to the meters which heat suppliers should install based on the heating, cooling and/or hot water at a building level and those that measure heating, cooling and/or hot water consumption by a final customer.

There are also different requirements based on the building class of each building within a network, which also determines if a cost-effective analysis is required to be conducted and the methodology of how that analysis should be carried out.

In 2020, the OPSS stated that the Regulations are a building block to developing a legislative Heat Network Market Framework – which before the Coronavirus pandemic, was due to be introduced in 2022. However, this did not occur.

In March 2023, DESNZ published an ‘Energy Bill Policy Statement’, relating to the ‘Heat Network Market Framework’. Within this statement, it was further reiterated that the Energy Bill outlines plans to create a market framework for the heat networks sector.

A market framework would be beneficial as it is recognised by DESNZ that the heat network sector lacks regulation (besides the HNMBR), which hinders consumers, investors, and businesses throughout the UK.

The Bill outlines the groundwork for the development of this framework, which aims to result in the regulation of the market (which includes consumer protection, carbon emission limits and technical standards on networks), the assignment of a heat networks regulator and more.

To read more on the Bill, click here

It is stated within the Government’s HNMBR guidance document that there ‘no further changes are anticipated in the near future’ for the HNMBR.

However, this does not mean that the new legislation regarding Heat Networks will not be introduced sooner, as it is anticipated that new Heat Networks Regulation based on the Energy Bill and Market Framework will come into force early in 2024.

Swan Energy Know How
Swan Energy are experts in Streamlined Energy and Compliance Reporting (SECR) and our team is experienced and skilled to support your organisation.

Sarah Holbrook

Marketing Manager

Sarah started working with the Swan Energy team in August 2018 as Marketing Manager and is responsible for raising the profile of Swan Energy in the market and helping to drive the strategic growth of the business. She takes the lead on marketing planning and activities.