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Guide to generating and selling electricity on heat networks

Heat network specialist Switch2 Energy and law firm Penningtons Manches Cooper have published a free guide to selling electricity generated on-site at residential developments.

The sale and distribution of power is regulated, requiring a licence from Ofgem in many instances, but there are exemptions that can apply to residential schemes, including heat networks.

The guide will help heat network operators understand the rules and regulations of supplying electricity to residents connected to a site’s privately operated electricity network. This points the way to unlocking the potential of lower carbon, integrated local energy systems.

By adding power supply into local heat networks, residents can benefit from lower, stable electricity prices, as well as affordable heat. In addition, landlords can use savings to offset heat network costs. This is particularly important during the expensive transition to lower carbon systems and provides scope to introduce additional services, such as electric vehicle charge points.

Ian Allan, head of market strategy for Switch2, said: 'There is strong interest from developers, landlords and ESCos in supplying residents with electricity as part of a heat network service. This makes strong commercial sense for existing schemes, where combined heat and power (CHP) plant is used. The drive for lower carbon solutions is also creating new opportunities to integrate heat and power from solar PV and heat pumps.'

The guide covers:

1. The legal aspects of distributing and reselling locally generated electricity to residents

2. Ofgem licence rules and exemptions

3. Pricing regulations, including standing charges and Maximum Resale Price caps

4. Consumer rights of residents

5. Licensing and supply rules applying to on-site electric vehicle charging


9 September 2020


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