Regulation of Heat Networks: What Do You Need to Know?
2026 will see substantial changes to how heat networks are regulated, with Ofgem taking over the role of regulator. This will mean a range of changes which those operating and supplying heat through a heat network need to be aware of.
What is a Heat Network?
A heat network is a way of supplying heating, hot water or cooling to different buildings (or individual units within one building e.g. a flat) from one central heat source. Where a property is linked into a heat network it won’t have its own boiler but will get heating from a separate central source. There are different types of heat networks.
What heat networks are impacted by the changes?
The changes will apply to “relevant heat networks” being:
- District Heat Networks: where multiple buildings (or persons within a building) are provided with heating, cooling or hot water via a heat network.
- Communal Heat Networks: where heating, cooling or hot water is supplied to a single building which is divided into separate premises or persons in those premises.
Certain types of heat networks are excluded from the changes (for example if a network only services a single HMO).
How Are Heat Networks Currently Regulated?
Currently, at the start of 2026 there are relatively minimal regulations concerning heat networks. The vast majority of legal requirements relate to providing those who receive heat or hot water via a district heating system with information about their usage and bills (with the exact requirements being contained in the Heat Networks (Metering and Billing) Regulations 2014).
How Are Changes to Regulation Being Introduced?
Changes are being made through a framework of legislation, mainly: the Energy Act 2023 and the Heat Networks (Market Framework) (Great Britain) Regulations 2025.
Ofgem, as the new regulator of heat networks, will also introduce requirements and guidance to be followed. More information is available via Ofgem’s website.
Who is Impacted by the Changes?
- People who operate a relevant heat network (with the legislation stating that a person “operates” a heat network if they control the transfer on that network of thermal energy for the purposes of supplying heating, cooling or hot water); and
- People who supply heating, cooling or hot water to consumers by means of a relevant heat network.
What Are the Changes
Authorisation and Registration
It will be a criminal offence to operate a relevant heat network without authorisation from Ofgem.
Heat networks operating before 27 January 2027 will be authorised automatically by Ofgem. Heat networks with automatic authorisation must also be registered with Ofgem by 26 January 2027.
At the time of writing Ofgem is finalising its guidance and process for registration with the expectation that the registration process will be open in spring 2026.
Authorisation Conditions
From 27 January 2026 those either operating a relevant heat network or supplying heating etc. through a relevant heat network must comply with a range of authorisation conditions produced by Ofgem.
In addition to requirements concerning registering relevant heat networks, the conditions cover a range of areas including:
- Ensuring consumers are being charged a fair price for energy costs with costs being allocated appropriately
- Ensuring “fit and proper” people oversee the relevant heat network
- Co-operating and providing information to Ofgem and those appointed by Ofgem
- Acting in a responsible manner to ensure continuity of service to consumers
- Maintaining information on the relevant heat network
- Treating consumers fairly and handling complaints
- Protecting vulnerable consumers
Ofgem has produced guidance on various aspects of the Authorisation Conditions to help in understanding these new requirements.
Technical Standards
The UK Government will be able to mandate minimal technical standards for heat networks. It is expected that these will be introduced alongside the Heat Network Technical Assurance Scheme (HNTAS) which is due to launch in 2026.
Next Steps
- Those whose properties are served by heat networks will need to assess if they are caught by the new changes.
- Where caught, it will be necessary to gather data on the heat networks to be able to register it with Ofgem before the January 2027.
- Operators and suppliers with relevant heat networks will need to review the authorisation conditions and take steps to comply (or demonstrate compliance).
- Heat networks will need to be assessed against HNTAS and any other minimum standards to ensure technical compliance.
If you have any questions about how the new changes might impact you, or heat networks generally, please contact our team.
