On 27 January 2026, the remainder of the Heat Networks (Market Framework) (Great Britain) Regulations 2025 come into force. Here’s a short history lesson and some suggestions for topics heat network operators, suppliers, landlords and off takers might want to think about as the date approaches.
Heat networks – weren’t they a thing in 2014?
While heat networks have been around for a while (property professionals will be familiar with the Heat Network (Metering and Billing) Regulations 2014), the government’s target of net zero by 2050 has resulted in an increased focus on the heat network market – given that in order to achieve those net zero targets, there will need to be a significant increase in the amount of heat supplied by the sector.
The Energy Act 2023 – the new chapter in heat networks
As a result, beginning with the Energy Act 2023, the government has sought to introduce regulation into the heat network sector that addressed the Competition and Markets Authority‘s recommendation from their 2018 market study (found here), that the sector ought to ensure that all customers are adequately protected by a statutory framework that underpins the regulation of all heat networks. The Energy Act 2023 and its various statutory instruments gave responsibility for regulating the sector to the Gas and Energy Markets Authority (GEMA) acting through the Office of Gas and Electricity Markets (Ofgem), and sought to provide a structure to the heat networks sector similar to that of electricity and gas – with both customer protection and technical specifications.
Technical standards – what’s the position?
The Act also provided the powers for government to mandate heat network technical standards in Great Britain. The government proposes to address technical standards by the introduction of the Heat Network Technical Assurance Scheme (HNTAS). The introduction of HNTAS will be phased in over time, once policy proposals are consulted on and finalised. CP1 (2020), published by the Chartered Institution of Building Services Engineers, is the current recognised Code of Practice for heat networks in the UK and contains technical guidance and voluntary minimum standards for UK heat networks. DESNZ has developed TS1 (the Heat Network Technical Standard) based on CP1 but introducing new requirements in several key technical areas. The government has also issued draft code documents; Technical Specifications and Assessment Procedures for new build networks in December 2025 and for existing networks in January 2026 in draft form ahead of the scheme’s planned launch (which is still to be decided). Both TS1 and the draft code documents can be found here.
Ofgem – the regulator for heat networks
Since its appointment as regulator, Ofgem has been working with DESNZ to develop policy and regulations. Through a number of consultations (some 13 in total – found here), Ofgem have sought market input on a variety of subjects, including but not limited to regulations in the areas of consumer protections and their implementation, authorisation conditions and registration of networks, pricing and heat network zoning. Ofgem have also consulted on how they will oversee the sector, including the methods they will use to manage risks and protect consumers.
The Heat Networks (Market Framework) (Great Britain) Regulations 2025 – a catchy title
Arising out of these consultations, Ofgem, alongside DESNZ, developed the statutory framework for the sector, and The Heat Networks (Market Framework) (Great Britain) Regulations 2025 were made on 2 March 2025. The Regulations did not come into force in their entirety immediately, but instead made provision for a phased introduction to align with the timetable for implementation outlined by Ofgem.
Focusing on consumer advice first, Ofgem implemented its consumer advocacy and advice services on 1 April 2025, allowing consumers to obtain free, impartial advice and support to resolve problems with their heat network operator. At the same time, Ofgem addressed the authorisation of heat networks and, as part of deeming provisions in the Regulations, all heat networks operating before 1 January 2027 received deemed authorisation from Ofgem to operate.
What’s next?
The next milestone in Ofgem’s pathway to implementation is the coming into force of the remainder of the Regulations on 27 January 2026. This step is perhaps the most significant and will allow Ofgem to begin regulating heat networks in Great Britain (England, Scotland and Wales). From this date, heat network suppliers and operators will need to comply with the Regulations which introduce new rules to protect customers.
What is a relevant heat network?
The Regulations apply to “relevant heat networks”. These are defined as the transfer on a network of thermal energy for the purposes of suppling heating, cooling or hot water and make the operating of a relevant heat network or supplying heating, cooling or hot water to heat networks consumers by means of a relevant heat network. This is a “regulated activity” for the purposes of the Regulations. While the Regulations introduce an exception for networks that serve a house in multiple occupation, the definition is wide and likely to catch entities and persons who perhaps haven’t realised that they are operating a relevant heat network.
New regulations – new offences
The Regulations introduce several offences. The first and most relevant of which is an offence of carrying on a regulated activity without authorisation from Ofgem. As we have said above, any network in existence at present or that commences operation from now until 1 January 2027 will be deemed to be authorised. However, all operators and suppliers with deemed authorisation will be required to register their heat networks with Ofgem. This registration process will be the subject of further secondary legislation in spring 2026.
Authorisation but with conditions attached
The Regulations impose compliance with authorisation conditions put forward by Ofgem, as regulator for the sector, as well as requiring adherence to a standard of performance for authorised operators and suppliers. While we are yet to hear further on the standards of performance, consultations on the authorisation conditions and registration guidance have been carried out, and we await Ofgem’s final conclusions on what these will look like. We know from the draft documents provided as part of the consultation that the authorisation conditions cover topics such as standards of conduct, pricing, billing and provision of information.
In relation to standards of practice, Ofgem and DESNZ have stated that operators and supplies ought to follow the existing good practice of the Heat Trust, stating: “The Heat Trust's established role in setting industry standards provides a strong foundation upon which the new regulation will build and their continued involvement will aid transition, ensuring continuity, and reducing risk of disruption for the sector and its consumers … [We] encourage parties to follow existing good practice, such as that set out by the Heat Trust.”
New heat networks and zoning
Those involved with the procurement and development of new heat networks will be keen to monitor progress of the Zoning Pilot Project and the ongoing consultation. This will be the subject of further Mills & Reeve briefings.
So, what can be done to prepare?
Ofgem are aware that this is a significant change for the sector and have announced that they wish to “work with the heat network sector to improve outcomes for consumers and intend to work collaboratively with suppliers and operators during the first year of regulation.” So, what should operators and suppliers of relevant heat network be doing in advance of, and after, 27 January 2026?
- Owners and operators of buildings with communal heat solutions should assess whether they are caught by the Regulations – especially given the wide nature of the definition of a relevant heat network.
- Engage with Ofgem – through input into consultations, reviewing consultation responses and signing up to their heat network distribution list.
- Register and engage with the Energy Ombudsman – Ofgem are encouraging all heat network suppliers to join the Energy Ombudsman Heat Network Supplier scheme to ensure that unresolved disputes with consumers are handled without confusion or delay.
- Review internal processes for compliance with proposed regulations.
- Review and consider implementation of the Heat Trust Heat Network Scheme rules.
- Review existing contractual arrangements to ensure alignment with proposed regulations.
- Review the draft TP1 and additional HNTAS guidance issued by the government and carry out any necessary technical due diligence to understand potential non-compliance at any early stage.