Are Landlords ready for new metering regulations?

London officeThe way that Landlords account for the heating, cooling or hot water supplied to tenants is changing. If a landlord supplies more than one tenant within the same building, then it’s likely that ‘The Heat Network (Metering and Billing) Regulations 2014’ will affect them.

The deadline for complying with the new regulations is 31st December 2015, when Landlords will need to notify the National Measurement Office (NMO) of any existing heat networks.

The notification includes the estimated capacity of the systems and the kWh of heat, cooling or hot water supplied.

Then, 12 months later, the heat supplier must have meters installed to measure heating, cooling or hot water consumption, assuming that doing so is cost effective and technically feasible. Otherwise a feasibility analysis must be completed by 31 December 2016 and then on a four yearly basis.

Where did these regulations come from?

On 25 October 2012, the EU adopted a Directive on energy efficiency: DIRECTIVE 2012/27/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL.

Article 8 of these regulations led to the introduction of ESOS (Energy Saving Opportunity Scheme), but it was Article 9 that led to the requirements for metering.

What are the benefits?

It is an established principle that metering is the first step to energy reduction and the Government has identified that 27% of UK energy consumption comes from heating, cooling and hot water. Heat metering is thought to give consumers more information and therefore control over the cost – acting as a direct financial incentive to reduce waste.

Will this change things?

In the past, it has generally been easier to include heating, cooling and hot water within a rent or service charge. From our experience, with no direct incentive for either the landlord or the tenant to conserve energy, waste occurs, the cost of which tends to be built within the tenants rent.

With no way of identifying waste, issues such as heating and cooling in operation at the same time or services in operation outside of business hours are fairly common place.

But with metering installed as matter of regulation, things are likely to change. Metering and monitoring tends to lead to savings. Savvy organisations that have an ISO50001 energy management system or participate within ESOS will have real data for the first time, an element that has often been missing in the past and has held many organisations back from realising financial savings.