Citizens Advice Scotland calls for new Regulator of district heating schemes to be set up

A district heating scheme in Glasgow
A district heating scheme in Glasgow

Citizens Advice Scotland is calling for greater protection for consumers in Scotland who use ‘district heating’ schemes by setting up a new Scottish industry regulator .

This recommendation was submitted just ahead of the closure of the Scot-Govt. consultation on its new Scottish Energy Strategy later today.

District and communal heating schemes supply heat and hot water, generated in a central location, to a current total of 35,000 households in Scotland.

This may take the form of a boiler serving a number of residences within an individual building – such as a tower block, or several buildings connected to a larger network.

But district heating is not regulated in Scotland, so consumers do not benefit from the same level of consumer protections as those who rely directly on gas or electricity to heat their homes.

Citizens Advice Scotland have taken Advocate’s Opinion – just one step below proving a case in court – which indicates that the Scottish Parliament already has power to set up a Scottish District Heating Regulator.

This is the Advocate’s Opinion from QC John Campbell: “I cannot see any reason why the Scottish Government could not regulate the terms and conditions of supply of heat in any district heating scheme, existing or to be constructed, by introducing a compulsory licensing regime proportionate to the project in question. The components of that licence are questions for another day, but a licence to supply could easily enshrine existing consumer protection law…”

 The CAS spokesman added: “Our legal opinion suggests therefore that the Scottish Government does have the power to introduce a licence which includes compulsory consumer protection measures.

 “This may not apply to every measure set out above – for example, the introduction of price controls could require additional legislation at UK-level – but it is clear that it would be possible to implement a regime that included a range of basic measures that would protect consumers from detriment.

 “While this would suggest that a Scottish regulator could take enforcement action for non-compliance, it is not clear at present what potential penalties may be appropriate. This would be a matter for the Scottish Government to decide, based upon the circumstances of the district heating market.”

While the district heating market is currently small, it is expected that is will expand significantly in coming years.

The Scottish Government is seeking to substantially increase the use of district heating, with an initial target of 1.5 TWh, or 40,000 households, by 2020, while a UK Government report suggested 7% of Scotland’s total heat demand could be met by district heating by 2025

In its new study – ‘Different Rules for Different Fuels’ – Citizens Advice Scotland calls on the Scot-Govt to:

  • Establish a Scotland-wide body with responsibility for the regulation of the district heating market:
  • Provide support for suppliers to ensure they are able to meet regulatory standards and consumer expectations:
  • Investigate what mechanisms are available to introduce price controls for district heating systems and to:
  • Introduce a statutory licence for district heating suppliers. This should include compulsory consumer protection measures as well as minimum technical standards to ensure efficient operation.

A spokesman for CAS explained: “District heating has the potential to play an important and positive role in eliminating fuel poverty, but in order for this to happen, consistent consumer protections must be in place.

“The findings of this report have been illuminating, and while it shows us that there are many examples of good practice from existing district heating suppliers, there is a clear need for greater and more consistent consumer protection for those using district heating.”

The full report is available at www.cas.org.uk

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