Ofgem heat networks regulation begins: Key changes coming into effect on 27 January 2026

From 27 January 2026, Ofgem will begin regulating heat networks across Great Britain. The new framework is implemented under The Heat Networks (Market Framework) (Great Britain) Regulations 2025, made under the Energy Act 2023, and gives Ofgem powers to set and enforce “authorisation conditions” for those who operate or supply heat on a network. 

Within the Heat networks regulation: consumer protection guidance, Ofgem stated:

“From 27 January 2026, relevant heat network suppliers and operators must comply with the authorisation conditions. These conditions are a combination of prescriptive requirements and principle-based rules, designed to protect heat network consumers and ensure they receive a service that is fair, transparent and reliable.” 

Ofgem has confirmed commencement by notice for this date, and published its first set of guidance (Heat networks regulation: consumer protection guidance) and its first set of conditions (Heat Networks: 2026 January Authorisation Conditions).

Ofgem also released its Heat networks fair pricing and cost allocation guidance to focus on “addressing pricing issues where these arise while keeping any burdens on heat networks to a proportionate level”.  

The regulatory regime has been expressly designed not to override existing housing legislation. Ofgem has stated where the supply and operation of a heat network is part of a broader housing service being provided, “the authorised person will be subject to both our Authorisation Conditions and existing housing legislation.”

In terms of transitional periods, landlords should work towards compliance with the Conditions from now onwards. Ofgem’s focus in the coming months will likely be on providing guidance aimed at supporting the sector, and its focus will probably not be on enforcement, save in extreme cases.

Consumer protection guidance: Key Authorisation conditions 

1. Standards of conduct

Ofgem’s Standards of Conduct now apply to suppliers and operators and require fair treatment in every interaction with consumers. The principles cover behaviour, information, customer‑service design, consideration of vulnerability and active consumer engagement. In practice, providers must act honestly and professionally, give complete and intelligible information, keep customer‑service routes accessible and effective, and cooperate when different parties share responsibility on a network. They are expected to record how fairness has been considered, and to engage meaningfully with consumers on significant decisions such as fuel‑source choices.

2. Heat supply contracts 

Where an authorised person supplies heating, hot water or cooling to a relevant consumer, it is required to do so under an agreed Heat Supply Contract (or a deemed Heat Supply Contract). A Heat Supply Contract may be a variety of a contracts including a lease, a tenancy or a service‑charge arrangement, and must be provided in clear written form setting out items including all key terms, charges, billing information, responsibilities, dispute routes and contact details. Where older leases already contain heat‑supply provisions, suppliers may provide missing information separately and update supply contracts at a “time when reasonably practicable”. 

3. Quality of service 

Authorised persons must have a clear complaints process, make consumers aware of it at least annually, and keep adequate records. The supplier will ordinarily be the single point of contact even where an operator or contractor is involved. Unresolved complaints can be escalated to an approved redress body, with Ofgem’s guidance signposting the Energy Ombudsman as the route once internal procedures are exhausted.

4. Billing and transparency

From commencement, bills must be accurate and, for metered networks, based on actual readings at least once a year. Minimum requirements for Billing information that must be provided with each bill includes, current charges, consumption, clear and accurate information on the terms, how to contact the supplier, billing agent and emergency service, how to complain and access redress, and signposts to energy‑saving advice and consumer‑advice bodies.

5. Back-billing

Consumers should be provided with timely and accurate bills. Ofgem state that “back-billing should be a last resort”, and only where back-billing is necessary, it should be limited to 12 months to ensure all consumers are treated fairly. Where heat costs are recovered as a service charge within section 18 of the Landlord and Tenant Act 1985, the section 20B 18‑month limitation period continues to apply. However, even here Ofgem “encourages” the authorised person to keep to the 12-month period. 

6. Protections for consumers in vulnerable situations 

Suppliers must operate a Priority Services Register, proactively identify vulnerable households, and provide appropriate free support (for example, alternative formats, meter‑reading assistance, nominated third‑party contacts and priority help during emergencies). There are specific constraints on disconnections for non‑payment, especially during winter and where very young children, older residents or people with medical needs live at the premises. The regime prioritises debt prevention, constructive engagement and proportionate recovery.

7. Security of supply

Operators are required to maintain networks in line with good industry practice, undertake risk assessments to reduce the likelihood and impact of outages, and keep performance records for at least 5 years. Where interruptions occur, they should notify consumers promptly, provide appropriate interim support (for example, temporary heat or hot water where feasible), and communicate plainly about causes, remedies and steps to avoid recurrence.

For more information on heat networks and how stakeholders should be preparing, please see our previous article on the topic:

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

For more information, please contact Mark Foxcroft, Kris Kelliher, or Kirsten Taylor.