(Or “How I learned to stop worrying about compliance and start loving the regulations”*)
Heat networks are complicated – and the complication is going to get supercharged with full regulation by Ofgem. There is only one simple solution – create your strategic plan for compliance.
However, we often see an understandable desire to come up with quick-fix solutions – the busywork which means being seen to be doing something and which adds comfort, but doesn’t deliver.
So, we thought we’d make a list of things we hear that will NOT deliver better heat networks and compliance:
1. Heat networks are a technical challenge.
Of course you have to get the technical things right, but heat networks in social housing are overwhelmingly a management challenge – it’s what people do and how they do it that makes the real difference. You need customer communications, compliance, governance, asset management, repairs and maintenance and contract managers involved. And that’s just the start.
2. Appointing a Heat Network Manager is the solution.
That would be great, wouldn’t it? However, they’re in scarce supply and very difficult to recruit. Our advice is always to find a good housing person and train them on heat networks – not find a heat network manager and train them on housing. If you do recruit, the best heat networks managers are people managers (see above…) – then engage, coordinate, plan and develop.
3. Heat networks can all be delegated [Part One].
You need the right people to do the right things – to take action, to deliver – but heat networks are a regulation and compliance issue that must be signed off by the board and have a Director lead. The days are gone when heat networks can simply be added to the sustainability person’s job because ‘it’s got something to do with energy’.
4. Heat networks can be delegated [Part Two].
Many hope they can outsource everything from repairs and maintenance to metering, billing and compliance – or even better, that an energy service company will pony up and do it all. Firstly, you cannot outsource the final responsibility for compliance (and your customers will always see you as being responsible, whoever you get in.) And secondly, there is currently very little commercial appetite to take on small, existing heat networks. That may change, but this will be at a huge risk premium plus a decent margin. And there is only one place those costs come from – other customers through their rent.
5. We don’t have enough budget to deal any of this.
It’s guaranteed that no one ever has enough budget when new regulations come along. The key is to have a plan and to use the resources available in the best way over a reasonable timeframe. That plan will also help you set out your compliance pathway to Ofgem. And boards love a plan; what they don’t like is being non-compliant and with no plan.
6. We don’t have many heat networks so it’s not an issue.
On average, around 10% of a housing provider’s homes are on a heat network. Some have more, some have less. But we guarantee until someone looks, no one knows how many heat networks they have. Do you have any supported housing? Extra care? Most of those have been built with communal heating and so form part of the new heat network regulations. The requirements for regulation will apply to everyone, whether you’ve got one heat network or one hundred.
7. We don’t have to worry about new developments.
Most of the issues people have with heat networks around efficiency, reliability and cost are as direct result of the way new heat networks have been developed. Whilst we now have the Heat Network Code of Compliance (CP1) and while new technical regulations are coming in, new heat networks continue to be poorly designed, developed and delivered leading to years of issues. This only gets worse with Section 106 (or externally managed) schemes. Always check your development pipeline for new heat networks and act today.
We don’t actually expect you to love the regulations, but if you want to discuss further how to get your plan to compliance on track and avoid pointless busy work, get in touch at simplybetterheatnetworks@chirpyheat.com. You can also get your free bespoke Regulation and Compliance Insights Report from Chirpy Heat here.
*With apologies to Stanley Kubrick