Heat networks regulation: authorisation and regulatory oversight

Summary

In this section, we explain our proposed approach to audit, and how we intend to implement an audit programme that takes account of proportionality and regulatory burden across the range of heat networks.

We want your feedback on the overall approach, and in particular:

• the approach to the implementation of the audit programme
• whether the approach is proportional
• the proposed sampling methods
• segmentation

Details

Approach to audit

The proposed audit programme will serve as an assurance process, making sure policies and procedures are in place for:

• data quality
• data recording
• providing data to Ofgem.  

The scope and coverage of an audit will be based on information provided at the registration stage, and on data monitoring requirements.  

In general, we propose that audits cover the authorised entity rather than specific sites. We may also undertake some site-specific audits where we believe it is appropriate.

Future guidance will provide more detail on our overall process, including our approach to identifying heat networks we will audit, and how long audits will last.

Segmentation and sampling

To ensure our approach to audit is proportionate, we expect to base audits on sampling covering different heat network types and market segments. We will also seek to audit those networks we believe could be causing consumer detriment, based on monitoring data and other intelligence.  

We propose using sampling techniques to implement a risk-based approach to auditing. We expect to use both targeted sampling (intelligence gathered and used to identify risk) and random sampling (sample of heat networks to cover all segments of the market).

We expect to use different sample audit methods depending on factors like risk and compliance actions.  

Before you give us your views

You’ll need to read the full details in the Audit chapter of the consultation (PDF).