District Heating

maxthepolarbear

Hi - I've seen various people on this forum have been complaining about the district heating arrangement in new builds. I have a similar problem.

The heating to my flat is supplied by a company called Data Energy and they charge me 5.95p per kWh and a standing charge of 67.07p per day. This seems very high to me.

Like most people, I had to sign a contract agreeing to have the heating supplied via this company as part of my purchase of my current flat (new build). I didn't have a choice not signing it and I had never been told it would cost so much.

I am aware I'm not in this situation alone - I'm just wondering if there's any consumer group who would fight for us against these extortionate charges?

Surely this district heating arrangement is unfair to consumers and benefits the supplier as they can charge as high as they want since it's not a free market?

modsandmockers

The modern concept of District Heating is new to me, and I seriously hope that it will be banned fairly soon. It is surely not much different from a landlord’s re-selling of energy to a tenant at a price of the landlord’s choice.

If each separate flat has its own metering system, then I can see no reason why an occupier should not be allowed to choose their own supplier.

HappyMJ

modsandmockers wrote: »

The modern concept of District Heating is new to me, and I seriously hope that it will be banned fairly soon. It is surely not much different from a landlord’s re-selling of energy to a tenant at a price of the landlord’s choice.

If each separate flat has its own metering system, then I can see no reason why an occupier should not be allowed to choose their own supplier.

A district heating system is a lot cheaper to maintain for the owner. There's only a heat exchanger at the property to maintain. The expected lifespan of the system is 40 years. The savings also need to be taken into account when calculating a total cost of ownership.

Although a £20.40 per month standing charge to me does seem quite excessive.

5.95p/kWh doesn't seem to excessive. It's 100% efficient so kWh in equals kWh heat in the building. Gas heating is not 100% efficient. If you assumed an average of 80% gas efficiency over the year and used an average of 16,500kWh of gas then you would only need 13,200kWh of the district heating energy. That would be an extra £65.45 per month totalling £85.65 per month. That's not too bad considering no boiler is required. Just a very simple heat exchanger hardly requiring any maintenance at all. A British Gas service contract could be £12 per month and replacing a boiler could cost around £1,200 every 10 years adding another £10 per month onto the total cost.

Replacing the radiators and pipes in both systems would cost the same every 40 years so no difference there.

Both systems use electric pumps so again no difference on that cost.

Richie-from-the-Boro

The overall average efficiency of the schemes in 2013-14 was 55%, the very best at 85%,. a large group of schemes were operating at below 50% efficiency. For me a more important issue is how it is measured, for example house No 67 Firkinshaw Street was delivered hot water at 60°C but was it ..... house No 67 Firkinshaw Street was indeed supplied with CHP measured at 60°C before the run of 40 meters to the house where it was 28°C when it entered the dwelling, and then there are one or more dwelling [as in flats] per delivery.

HappyMJ

Richie-from-the-Boro wrote: »

The overall average efficiency of the schemes in 2013-14 was 55%, the very best at 85%,. a large group of schemes were operating at below 50% efficiency. For me a more important issue is how it is measured, for example house No 67 Firkinshaw Street was delivered hot water at 60°C but was it ..... house No 67 Firkinshaw Street was indeed supplied with CHP measured at 60°C before the run of 40 meters to the house where it was 28°C when it entered the dwelling, and then there are one or more dwelling [as in flats] per delivery.

And a coal fired power station is 30% efficient.

maxthepolarbear

HappyMJ wrote: »

A district heating system is a lot cheaper to maintain for the owner. There's only a heat exchanger at the property to maintain. The expected lifespan of the system is 40 years. The savings also need to be taken into account when calculating a total cost of ownership.

Although a £20.40 per month standing charge to me does seem quite excessive.

5.95p/kWh doesn't seem to excessive. It's 100% efficient so kWh in equals kWh heat in the building. Gas heating is not 100% efficient. If you assumed an average of 80% gas efficiency over the year and used an average of 16,500kWh of gas then you would only need 13,200kWh of the district heating energy. That would be an extra £65.45 per month totalling £85.65 per month. That's not too bad considering no boiler is required. Just a very simple heat exchanger hardly requiring any maintenance at all. A British Gas service contract could be £12 per month and replacing a boiler could cost around £1,200 every 10 years adding another £10 per month onto the total cost.

Replacing the radiators and pipes in both systems would cost the same every 40 years so no difference there.

Both systems use electric pumps so again no difference on that cost.

Thanks for your reply - however, as you rightly pointed out the service charge does seem quite high.

Regardless of whether the charges are reasonable or not, it is the fact that it's a monopoly that I find it unfair. When there is no competition then there's no pressure for the company to lower the price and I think this is a topic that needs addressing.

I wonder if ofgem or my local MP can do anything about it...

HappyMJ

maxthepolarbear wrote: »

Thanks for your reply - however, as you rightly pointed out the service charge does seem quite high.

Regardless of whether the charges are reasonable or not, it is the fact that it's a monopoly that I find it unfair. When there is no competition then there's no pressure for the company to lower the price and I think this is a topic that needs addressing.

I wonder if ofgem or my local MP can do anything about it...

You can choose not to live there. The property was built to be a zero carbon property requiring the installation of a CHP plant and to be zero carbon property the excess heat is required to be offered for use by the properties built as part of the development.

If you don't like it then you can choose to live on a development which doesn't have a district heating system.

Richie-from-the-Boro

Dontcha just love 'green policy' we will achieve the climate change agreement - all we need are enough muppets to agree to the various ways of taxing and increased costs to pay for it - GOV !

modsandmockers

HappyMJ wrote: »

You can choose not to live there. The property was built to be a zero carbon property requiring the installation of a CHP plant and to be zero carbon property the excess heat is required to be offered for use by the properties built as part of the development.

If you don't like it then you can choose to live on a development which doesn't have a district heating system.

It would be interesting to know how much of this information was given to the OP by the marketing and sales departments.

Biscuit_Tin

maxthepolarbear wrote: »

Hi - I've seen various people on this forum have been complaining about the district heating arrangement in new builds. I have a similar problem.

The heating to my flat is supplied by a company called Data Energy and they charge me 5.95p per kWh and a standing charge of 67.07p per day. This seems very high to me.

Like most people, I had to sign a contract agreeing to have the heating supplied via this company as part of my purchase of my current flat (new build). I didn't have a choice not signing it and I had never been told it would cost so much.

I am aware I'm not in this situation alone - I'm just wondering if there's any consumer group who would fight for us against these extortionate charges?

Surely this district heating arrangement is unfair to consumers and benefits the supplier as they can charge as high as they want since it's not a free market?

maxthepolarbear wrote: »

Thanks for your reply - however, as you rightly pointed out the service charge does seem quite high.

Regardless of whether the charges are reasonable or not, it is the fact that it's a monopoly that I find it unfair. When there is no competition then there's no pressure for the company to lower the price and I think this is a topic that needs addressing.

I wonder if ofgem or my local MP can do anything about it...

Individually there is not a lot you can do. You should have been made aware of the situation when you bought the property.

Collectively you may have some success. Do the other residents agree with you and if so, is the management company on your side? If necessary, have you considered the right to manage?

What contract has been entered into with Data Energy? i.e how long is it? If it's not long, then presumably your management co can, if necessary, shop around when it comes to renew. Would any other company be prepared to supply?
If it's a long contract, then is that possibly because Data Energy supplied the heating equipment and your bills are effectively paying the capital cost as well as the cost of the energy?

You need to get other residents on your side, get the support of your management co. and then get them to seek independent legal advice if necessary.

I can't see Ofgem or your MP getting involved, not at this stage.