Preparing for Heat Network Regulation: Timelines, Obligations, and Next Steps

Understand the UK’s new heat network regulations, phased from 2025 to 2028, and what they mean for operators, landlords, and developers.

The UK is overhauling its approach to heat networks by treating them more like traditional utilities, gas and electricity, through a new regulatory framework. In this article we explore this new regulatory framework, which is being phased in from 2025 through to 2028. These changes are significant and will impact operators, suppliers, landlords, developers, and consumers alike.

What is a heat network?

Essentially, a heat network is any system where hot water or steam is produced centrally and transported to end users through pipes. The end users then use that hot water or steam to heat up water in their own premises – for heating and/or for hot water coming out of the taps. Many council estates built in the 1950’s, 60’s and 70’s included such networks. And they’ve been encouraged on large regeneration projects and flatted developments by planning policies in the last twenty or so years. And so, a large amount of Housing Association stock is heated by such systems.

Why heat networks matter

Heat networks are pivotal in the UK’s net‑zero strategy, expected to grow from 2 % to 20 % of the heat market by 2050. 

However, until now, the sector has lacked consistent regulation, leaving consumers vulnerable and operators without clear standards. The Government has acknowledged that the heat network sector is fragmented. Heat networks in the UK are operated by a large number of individual entities that are a mix of public, private and third-sector organisations, depending on the scale and ownership of the network. Poor technical design and a disparity of customer service has meant consumers aren’t always getting a good deal in terms of price and reliability.

The new regulatory framework

The core aim of the new regulatory framework is to protect consumers, by ensuring fair pricing, reliable heat supply, and the provision of clear, transparent information.

The new regulatory framework is built on:

• The Energy Act 2023; and
• The Heat Networks (Market Framework) Regulations 2025
• Ofgem as the sector regulator;
• Authorisation requirements for operators and suppliers;
• Consumer protection measures; and
• Technical standards via the Heat Network Technical Assurance Scheme (HNTAS) 

These introduce:

Timeline of implementation

The rollout of heat network regulation is phased as follows:

• April 2025: The consumer advocacy services launched with the Energy Ombudsman and Citizens Advice;
• January 2026: Secondary legislation / regulations will take effect; Ofgem begins regulating the sector;
• January 2027: The deadline for heat networks to register with Ofgem and provide data;
• January 2027 onwards: Enhanced consumer protections and step-in rights phased in from 2027 onward.

Key aspects of the new regime

Regulated activities under the new regime will include:

• Operating a heat network; and
• Supplying heating, cooling, or hot water.

Regulated entities must be authorised by Ofgem and comply with conditions covering billing, performance, and consumer protection.

Key aspects of the new regime include the following:

1. Ofgem oversight & authorisation

• Ofgem, designated as the heat networks regulator under the Energy Act 2023, will monitor, license, and enforce compliance.
• Ofgem can impose penalties, including fines and criminal sanctions, for unauthorised operations or breaches.
• Operators must maintain records, report performance metrics, and follow authorisation conditions. 

2. Consumer protections

• Fair pricing: Ofgem proposes to benchmark heat network prices against gas and heat pump alternatives and will be granted powers to investigate pricing;
• Guaranteed Standards of Performance (GSOPs), like repair times and outage response, are expected to start in 2027;
• Vulnerability protections: adoption of Ofgem’s definition of vulnerability and a requirement for suppliers to operate a Priority Services Register with tailored support for such consumers;
• Customers will retain access to advocacy bodies and independent dispute resolution - the Energy Ombudsman. 

3. Metering & billing

• Continuation of obligations under the Heat Network (Metering and Billing) Regulations 2014. This will include network and individual consumption metering, billing transparency, and notification duties including consumption data, tariff clarity, budgeting methods, and energy efficiency advice. 

4. Technical standards & assurance

• The Heat Network Technical Assurance Scheme (HNTAS) requires minimum design, installation, and operational standards, including proper insulation and temperature control.
• TS1, a draft formal technical standard, supersedes the voluntary Code of Practice CP1 and underpins HNTAS.
• Certification, assessment, and assurance systems will be overseen by an appointed Code Manager under Ofgem’s guidance.

5. Market Framework & Zoning

• Ofgem will oversee a zoning system to coordinate network expansion and operator roles.
• Competition and licensing conditions will be shaped to avoid monopolistic control while protecting consumer interests.

What are the implications for stakeholders and what should they be doing to prepare?

The steps that operators, landlords, and suppliers should be taking to prepare for the new regime include:

• Register with Ofgem for deemed authorisation promptly, and familiarise themselves with authorisation conditions;
• Clarify organisational roles and responsibilities, and in particular determine whether they’re an “operator” or “supplier” under the new regime;
• Upgrade billing and metering systems and procedures to meet the requirements of the new regime;
• Review billing and supply contracts to ensure they meet new transparency requirements;
• Implement consumer protection practices, including complaints handling and vulnerable support;
• Start preparing for HNTAS certification, including data monitoring and performance benchmarking; and
• Review change in law clauses in long-term contracts to ascertain the contractual implications of the regulatory changes. 

Final Thoughts 

This is a transformative moment for the sector. The regulations aim to deliver fair pricing, reliable service, and environmental performance. Operators, suppliers, and building owners must act now to align with authorisation criteria, technical standards, and consumer obligations.

If you want to discuss how these matters will affect you, please contact Kris Kelliher or Jonathan Jarvis.