Installation and maintenance licences for heat networks
Duration and Revocation of Licences
When considering our approach to the period of the licence we compared this to the gas and electricity licence, which is awarded with no set expiry date. This means the licence once awarded would run continuously and only end if surrendered by the licensee or revoked by the regulator, as set out below. We feel this would be a sensible and consistent approach for the heat network licence.
Other options that were considered were for the applicant to request a set period for which the licence is valid and include a licence renewal option at the end of the set expiry date. For example, the licence being awarded on the applicants request for a period of 10 or 20 years.
We feel our proposal for no expiry date to be applied to the heat network licence will provide the applicant with long term assurance and is also comparable with the approach being taken for the installation and maintenance licence being introduced by UK Government.
We intend to make regulations that allow the licensing regulator to revoke a heat network licence if the licence holder is no longer capable of performing the activities authorised by the licence or has failed to comply with the conditions of the licence.
We propose that before a licence is revoked the regulator may issue a notice to bring a regulated entity back into compliance with relevant conditions or requirements of their licence and ultimately impose fines if deemed necessary. The notice may require licence holders to take action to improve poor behaviours or conduct, such as installing insufficient apparatus or poor maintenance of heat networks, to prevent existing or future loss or harm that might arise.
Our proposal is the revocation of the licence is the last resort and where a licensee has shown they no longer have the ability to comply with the conditions of their licence. Revocations by the regulator will be subject to appeal.
Alternatively, the licence holder may choose to surrender the licence in accordance with the conditions of the licence. In doing so they would surrender their access to the associated rights and powers of the licence, and the licence would then come to an end.
This approach is similar to the enforcement guidance followed by Ofgem for gas and electricity licence holders and the approach being taken for the installation and maintenance licence by UK Government.