Very simply put, we feel strongly that the obligation to connect would be of benefit for heat networks.
It is important to make a separation between new builds and existing buildings. New builds could be addressed through an obligation to connect in the planning process. There would be an obligation to connect or otherwise, with that “otherwise” being when a heat source that is both cheaper and lower carbon can be found. That would be the standard for not connecting, but the de facto assumption would be that new builds would connect to the heat network.
In relation to existing buildings, we think that the obligation to connect needs to be strengthened. We have touched on anchor loads and how that derisks investment, which allows for longer-term capital investment as well. The obligation to connect for existing buildings is currently not as strong in the bill as we would like it to be, although there is an acceptance that public buildings will, or should be, connected. One reason why we want to see that obligation to connect is that it allows for a bigger view to be taken of the whole heat network, which enables people to invest ahead of need, in different areas at different times. It also enables us to decarbonise.
We have touched on the issue of the public versus the private sector. The obligation on new builds would be the equivalent of the obligation on the public sector to connect, without there being too strong a mandate for retrofits to connect, just as there is not for the private sector. That allows for a balance of connecting between new builds and retrofits.
One of our networks is in Amsterdam. When it started more than 20 years ago, 85 per cent of the projects were new builds—that was through a planning obligation—and 15 per cent of them were retrofits. Today the balance is about 50:50. The planning obligation is still in place, and we see that the obligation to connect is tightening in relation to existing buildings. For example, as boilers come to the end of their life cycles, buildings connect to the heat network. The obligation to do that is increasing, because there is a carbon tax, too, so people see connecting as beneficial.
An obligation is not a question of stating “thou must connect”; it should be a case of considering how we factor in the costs of delivering gas and ensuring a level playing field. That is something that should be addressed in secondary legislation.
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