The Environment Committee met on Thursday 8 January 2026 to discuss the expansion of heat networks in London. The committee heard from consumer advocates, housing associations, and government officials about the challenges and opportunities associated with heat networks, with a particular focus on consumer protection, pricing, and the implementation of zoning policies. Decisions were made to note the completed and ongoing actions from previous meetings and to note recent actions taken under delegated authority.

Expanding Heat Networks in London

The committee's primary focus was on the expansion of heat networks across London. Tom Brooke Bullard, Interim Principal Policy Manager at Citizens Advice, highlighted that while some consumers have positive experiences with heat networks, many face significant issues. These include very extreme sort of backbilling, with some individuals receiving bills for thousands of pounds for energy used years ago, and extreme price shocks, with heating costs increasing by up to 300%. He also noted cases of extreme cases where people are facing eviction because of housing debt. Citizens Advice has been the statutory consumer advocate for heat network consumers since April, and has been collecting data on these cases.

Richard Ellis, Director of Sustainability at Peabody, a large housing group, shared that Peabody manages a diverse range of heat networks, from 60-year-old systems to newly installed ones. He acknowledged that this diversity can lead to confusion for residents, who sometimes believe Peabody directly provides their heat when it is supplied by an external provider. Ellis also noted that residents struggle to understand heat tariffs, but Peabody has been keeping our prices relatively low. He expressed concern that as the sector moves towards schemes like HNTAS (Heat Network Technical Assurance Scheme), prices might increase, making it more difficult for their customers. David Strong, also from Peabody, elaborated on the complexity of their heat network arrangements, including 40-year concessions with energy services companies (ESCOs) for larger developments like the one planned for 1,800 homes in Plumstead. He explained that planning policy has increasingly mandated heat network solutions for new developments, influencing Peabody's approach to selecting heat sources, distribution, and emitters. However, Peabody is also exploring a broader energy strategy that includes heat networks as a component but is not entirely disregarding other technologies.

Assembly Member Andrew Boff raised a specific concern about residents in Butterfly Court on the Weaver's estate in Barking and Dagenham, whose hot water failed on a cold day. Tom Brooke Bullard confirmed that Citizens Advice collects data on such cases and can investigate specific heat networks. He also mentioned that while HNTAS aims to improve efficiency and reliability, other measures like guaranteed standards of performance are also being introduced.

The discussion also touched upon the proposed heat network zoning policies. David Strong believes these policies will be helpful, allowing for more focused scenario testing of estate-by-estate choices. However, he cautioned that Some of the zones work really, really well and will continue to work really, really well where there's a density of energy need, but in other places, I'm not so sure. Tom Brooke Bullard agreed that zoning makes sense but stressed the importance of having all of the good, all of the right consumer protections in place at the same time as zoning. He warned that mandatory connection rules without adequate consumer protections could put consumers at risk.

Regarding the Corrie Riverside plant, David Strong indicated that financial and commercial viability, particularly ensuring the consumer price is fair, is being assessed. He also highlighted the historical context of Thamesmead, which had a heat network 20 years ago that was removed due to poor performance and management. Any future plans would require extensive consultation with residents.

Assembly Member Gareth Roberts asked Tom Brooke Bullard to identify the three biggest issues affecting heat network users in London. These were identified as:

1. Billing: Primarily high catch-up bills, although incoming regulations are expected to address some of these issues.
2. Financial Strain: Significant jumps in the cost of heat and hot water.
3. Debt and Disconnection: Direct disconnection from heating and hot water due to debt, which is not common in the retail energy market. Roberts also inquired about the impact of Ofgem regulating heat networks from 26 January 2026. Tom Brooke Bullard stated that this will make a difference, particularly regarding billing, treatment of vulnerable consumers, and debt and disconnection rules. However, he cautioned that it is the start of the journey and not all issues will be resolved immediately, noting that suppliers have a year to register with Ofgem. He also highlighted that a price cap, as seen in the retail market, will not be introduced, and there are concerns about bundled heating and housing costs affecting approximately a third of consumers.

Regarding fair pricing protections, Tom Brooke Bullard expressed that while the principle is positive, more prescriptive principles are needed. He suggested that addressing pricing transparency and data collection is a good start, but further action is required upstream, potentially through an input price cap. Richard Ellis echoed the complexity of implementing a fair pricing tariff due to the wide variation in heat network costs, influenced by factors like size, energy input, building age, and operational model. He agreed that transparency and standardisation of billing are beneficial but will take time.

David Strong added that the capital expenditure of building heat networks can be filtered into residents' bills for decades, and this connection charge or bringing capital expenditure into the present day is a component worth watching. He also noted that unrealistic comparators are sometimes used in benchmarking discussions.

Assembly Member Thomas Turrell asked about redress for consumers dissatisfied with their heat network service. Tom Brooke Bullard explained that the ombudsman became the statutory alternative redress service for heat networks from April, but coverage is fairly patchy. He also mentioned the voluntary Heat Trust as a route for redress for registered suppliers.

Natasha Valadares, Head of Energy at the GLA, and Gabriele Caprotti, Joint Interim Head of Infrastructure at the GLA, discussed the Mayor's plans for heat networks. Valadares stated that heat networks are a priority for decarbonising buildings and providing cleaner air, but this must be balanced with the need for affordable housing. She emphasised a case-by-case approach to ensure heat networks are not delivered to the detriment of Londoners, particularly marginalised Londoners. Caprotti added that the forthcoming refresh of the London Infrastructure Framework is expected to validate the need to push heat networks, noting that close to 15% of London's heat could be met via heat networks that the GLA has identified.

Regarding what has held London back compared to cities like Copenhagen, Gabriele Caprotti pointed to the UK's different regulatory context and the time it has taken for stakeholders to agree on the need for regulation. He welcomed the arrival of regulation in 2026.

Assembly Member Prince questioned the progress towards the Mayor's target of 460,000 heat network connections by 2030. Natasha Valadares admitted that data is not yet where it needs to be due to the sector being unregulated, but expects this to improve. She described the 460,000 figure as an indicative figure and part of a wider decarbonisation picture. She acknowledged that achieving this target is challenging and depends on the effectiveness of regulations and zoning. John Allison from the Department for Energy Security and Net Zero (DESNES) stated that the government has a target of 20% of heat demand from heat networks by 2050 but no interim targets for 2030 or 2040, with a trajectory of growth to be set out in the forthcoming Warm Homes Plan.

Concerns were raised about the focus on connection numbers rather than consumer outcomes. Natasha Valadares assured that the GLA prioritises consumer protection, fair pricing, and reliable connections, looking to the regulator to provide these. She stated that the GLA does not mandate connections but provides grant funding for project development.

Regarding the impact of technical standards, Richard Ellis noted that the Heat Network Technical Assurance Scheme (HNTAS) will be pretty expensive for existing networks, requiring upgrades and new monitoring systems. He anticipates that the improvement works within eight years is going to be a real challenge and that there will be some element that will have to be passed on to consumers. Tom Brooke Bullard acknowledged the difficulty of mitigating these costs but stressed that upgrading inefficient and old heat networks is necessary. He suggested that suppliers explore ways to apportion costs fairly and over time.

The committee also discussed the role of data centres as potential heat sources. John Allison explained that zoning regulations will require zones to identify and potentially mandate the use of surplus heat from sources like data centres. Gabriele Caprotti added that the GLA has identified that close to 350,000 homes could be heated through the current data centers that do exist in London. However, concerns were raised about missing opportunities to integrate data centres into heat networks during the planning process, potentially leading to future retrofit costs.

The discussion also covered the role of Transport for London (TfL) in providing heat from its sites. Gabriele Caprotti noted that while he cannot speak for TfL, there are ongoing efforts to explore opportunities to use TfL land for decarbonisation efforts, including heat networks. He also highlighted TfL's potential to provide offtake heat and its role in coordinating infrastructure works to minimise disruption. The GLA is supporting boroughs in bringing forward lane rental schemes to encourage collaborative delivery of infrastructure.

Regarding the Warm Homes Plan, John Allison stated that it is coming soon but could not provide a specific publication date. He confirmed that the plan will set out a trajectory of growth for heat networks and how the £15 billion allocated spending will be used.

The committee also explored the issue of heat storage, with Gabriele Caprotti explaining that thermal storage is important for enhancing efficiencies and resilience, and that some existing heat networks already incorporate this capability.

Finally, the committee discussed the decarbonisation of heat networks. John Allison stated that both the growth of new networks and the protection of existing customers are priorities, and that funding schemes like the Green Heat Network Fund and the Heat Network Efficiency Scheme are complementary. He confirmed that the government is quite technology-agnostic regarding low-carbon heat sources, focusing on meeting carbon emission limits. Natasha Valadares added that the GLA focuses on what is the most appropriate low carbon source for the particular area, considering geographic implications and cost-effectiveness. She also noted that in designated heat network zones, connection to the network is expected to be the lowest cost, low carbon option for most buildings, with exemptions considered for specific circumstances.