The issue has drawn attention from policymakers and consumer groups, who warn that gaps in regulation may leave many households vulnerable. While most UK energy users benefit from a capped pricing system, others face a more uncertain outlook as wholesale costs fluctuate.
Homes supplied by heat networks, which deliver heating and hot water from a central source, are at the centre of concern. According to reporting by The Sun and the Express, around 500,000 households could be affected if current global pressures persist.
Heat Network Customers Face Limited Protection
Unlike standard gas and electricity users, households on heat networks are not covered by Ofgem’s domestic energy price cap. This means there is no fixed upper limit on what suppliers can charge, leaving customers more directly exposed to market volatility.
According to the Express, these households are also unable to switch providers if prices rise, reducing their ability to seek cheaper alternatives. Costs can vary widely depending on how energy is procured, with some providers tied to commercial contracts that are typically more expensive.
Figures from Heat Trust indicate that customers on heat networks usually pay between 10p and 15p per kWh for gas. During the previous energy crisis, however, some saw prices exceed 50p per kWh, leading to substantial increases in household bills.
The way these systems operate adds to the risk. Energy is often bought in bulk through contracts that are renewed at different times of the year, allowing higher wholesale costs to be passed on relatively quickly. As a result, households connected to heat networks may feel the effects of global price changes sooner than those on standard tariffs.
Global supply disruption drives renewed concern
The latest pressure on energy prices has been linked to disruptions in global supply chains following the ongoing conflict in the Middle East. According to The Sun, transport through the Strait of Hormuz, a key route for oil and gas shipments, has been restricted, while damage to major gas infrastructure has reduced supply.
These developments have contributed to rising wholesale costs, which are expected to feed through to consumers. Leonie Cooper, chair of the London Assembly Environment Committee, said increasing global prices are likely to affect UK households, particularly those without the protection of a price cap.
She added that it would be fair for heat network customers to receive support equivalent to other energy users. One proposal is to link assistance to the Ofgem price cap, which is set to fall to £1,641 per year from April.
Regulation of heat networks has only recently been introduced, following earlier price spikes when some households experienced increases of up to 450%. New rules allow Ofgem to intervene in cases of unfair pricing, while customers can seek redress through the Energy Ombudsman. The system, though, is still being implemented. According to the Express, this leaves many households exposed in the short term, as protections are not yet fully established.
