Residents with communal heating missing out on energy rebate says London Mayor

Up to 400,000 Londoners with communal heat networks could miss out on having their energy bills capped and face extremely high costs, the Mayor of London has warned.

Communal heating systems warm multiple homes with a common heat source, such as in apartment blocks, meaning each home doesn’t need its own individual boiler.

Anyone with this system is not protected by the price cap, as their fuel is bought through the uncapped commercial gas market.

Mayor of London, Sadiq Khan, is proposing the government provide cash transfers to be distributed among residents as a rebate or credit when heat network providers can show heating charges exceed the domestic price cap.

He said: ‘All Londoners are feeling the squeeze from the cost-of-living crisis, but once again it is those in the most precarious financial position who are failing to receive the support they deserve. 

‘This is a particular issue for Londoners because our city has far more people using communal heating systems than in the rest of the country. All I am asking for is for all Londoners to be treated fairly. 

‘Heat networks have an important role to play in our work to reach net zero, but it is vital that their customers are protected from the wildly fluctuating energy market.’

The amount of the rebate given to households would vary, but it’s been estimated a £100m rebate scheme would be required to help Londoners with communal heat networks.

Mr Khan is calling for this measure to be put in place prior to energy bills rising once again and the introduction of the tariff price cap in October.

Analysis has shown that 50% of the 200,000 homes on communal heat networks is social housing, while 32% is privately rented.

Stephen Knight, Director of Heat Trust, the national consumer protect scheme for heat networks, said: ‘The Mayor has rightly identified a huge injustice in the energy market.  The lack of price regulation in this sector means that most communal and district heating customers are seeing price rises many times larger than those being experienced by domestic gas customers with their own central heating boiler.

‘We’ve seen many examples of 300-400% price rises and even some as high as 700%. Government needs to step-in to protect these customers and ensure that they don’t suffer disproportionately from the current crisis.’

Photo by Chanhee Lee