Up to 500,000 UK households connected to heat networks face the prospect of energy bills doubling if prices surge due to escalating tensions in the Middle East.
What Are Heat Networks?
Heat networks deliver heating, cooling, and hot water to multiple properties in a single building or across several structures from a centralized source. These systems commonly serve residents in apartment blocks and multi-building complexes.
Unlike standard gas and electricity users, heat network customers lack protection from the Ofgem energy price cap, which limits charges per unit of energy. They also cannot switch suppliers during price spikes.
Vulnerability Exposed
Costs for these households fluctuate widely, as many networks rely on pricier commercial gas contracts. Typically, users pay 10-15p per kWh for mains gas equivalent, but during the 2021-22 energy crisis, some bills exceeded 50p per kWh, data from Heat Trust reveals.
Heat networks purchase energy through brokers in annual batches, with contracts renewable at any time, leaving users exposed to market volatility.
Middle East Conflict Drives Price Surge
Gas and oil prices have spiked following disruptions in the Middle East, including restrictions in the Strait of Hormuz—a vital global shipping route—and strikes on major gas fields that curb supply.
While most households benefit from safeguards against immediate increases, heat network users remain unprotected.
Calls for Urgent Protections
The London Assembly Environment Committee urges the government to implement price protections for heat network customers, matching the support available to traditional gas and electricity users.
Leonie Cooper, chair of the committee, stated: “The ongoing conflict in the Middle East risks rising costs for gas and oil. Even prior to recent price rises, gas prices for customers in the United Kingdom were expected to be 50 per cent higher in March 2026 than in the winter of 2021-22. It is only fair that Londoners on heat networks are given the equivalent support with their heating bills that other domestic gas and electricity consumers receive.”
Such measures could align with Ofgem’s price cap, set to drop to £1,641 annually from April.
New Regulations in Place
Heat networks came under regulation in January amid a gas price spike that drove some bills up by 450%. New rules in England, Scotland, and Wales empower Ofgem to intervene against unfair price hikes and provide Energy Ombudsman compensation for outages.
However, these safeguards are nascent, heightening customer risks.
Ofgem has contacted heat network operators, reminding them to treat customers fairly. A spokesperson noted: “We know people are worried about the impact of the conflict on bills. We are working with the heat network industry to understand how heat network consumers may be affected.”
What Customers Can Do
Concerned heat network users should promptly contact their supplier for assistance, including payment plans or support for financial difficulties.
