At the end of last year, the Competition and Markets Authority (CMA) launched a study in to the heat networks market, which is the market that involves the generation and distribution of heat to buildings.
The study was launched to ensure that the market was working for the consumers, and since the launch of their investigations at the end of 2017, a number of action steps have taken place.
These kinds of studies are common for the CMA to engage in as they look at any sector in the UK to make sure there is healthy competition and ensure that the consumer is always being treated fairly. The CMA will usually talk to the businesses involved in the market and obtain data from consumers and public sector sources.
The CMA have been initially led to believe that there may be a monopoly of the supply to the market as well as supply-chain incentives that many stifling competition as providers in the market face little pressure to price their services competitively and strive for providing a greater service.
According to the preliminary reports from the CMA, the heat network market isn’t actually regulated, so there are understandable fears that the lack of regulation could mean the market is stifling, and there may be little in the way of competitors in the market having the motivation to truly compete and innovate.
According to the CMA’s reports so far, there are some 14,000 heat networks in the UK, and their study encompasses communal heating systems and the supply to multiple customers in a building, as well as district heating supply.
Information and data from players in the market, as well as government sources, will be used to determine whether the market is fair and is working effectively and efficiently. We will keep an eye on the study as it develops.