Baxi’s Director of External Affairs & Policy Jeff House identifies the new regulations facing the heat network sector and what operators must do to stay ahead
Heat networks are a critical pillar in the UK government’s net zero roadmap. In dense urban environments, heat networks are seen as a practical, scalable solution to decarbonising heat where retrofitting individual solutions may be costly, challenging or less efficient. The government has therefore set a target to grow the share of UK heat demand met by heat networks from 3% today to 7% by 2035 and 20% by 2050.
It has launched a new regulatory heat network regime that aims to support this growth while improving consumer protection and providing more reliable, consistent performance. From greater consumer protection to tighter regulatory standards to heat network zoning, here’s what heat network operators need to know about the new framework.
Consumer Protection Regulation
Historically, heat networks have been largely unregulated, with no full consideration of consumer protection. This has resulted in allegations of legacy communal heat networks operating at just 35 to 45% efficiency, unfair pricing and poor service reliability. To address consumer protection and investor confidence, Ofgem was appointed as the statutory regulator for heat networks in Great Britain in January 2026 under the Energy Act 2023 and implemented through secondary legislation in the Heat Networks (Market Framework) (Great Britain) Regulations.
This marks a significant shift for operators and suppliers of heat networks who will now be treated as regulated suppliers while consumers will benefit from having access to the Energy Ombudsman for dispute resolution. Full regulatory requirements will be phased in from next year with operators obliged to register all relevant heat networks through Ofgem’s new digital portal by 26 January 2027.
More information on which heat networks are in scope and detailed consumer protection guidance can be found on the Ofgem website.
Improved operating standards through HNTAS
The second major area of change is the introduction of new mandatory technical standards known as the Heat Network Technical Assurance Scheme (HNTAS).
The aim of HNTAS is to improve performance and ensure that the heat network framework is built correctly from the start for future flexibility. HNTAS aligns with the CIBSE Code of Practice CPI with auditing to assess all requirements.
HNTAS is expected to be introduced for new heat networks from next year. While existing networks will have longer to comply with the higher standards, it’s worth noting that funding to support performance improvements for existing district heating or communal heat networks in England and Wales is available now. Guidance on eligibility criteria and the application process for the Heat Network Efficiency Scheme (HNES) can be found on the government website.
Heat Network Zoning
The third notable area of change, expected to be implemented in 2026, is heat network zoning. The government is working with cities to identify these zones, focusing on London, Leeds, Plymouth, Bristol, Stockport, and Sheffield to pilot the schemes. New and existing buildings within the designated area will be mandated to connect to district heat networks where this is the lowest cost solution for low-carbon heating. New homes and existing communally-heated, high-rise residential buildings as well as new commercial buildings and large non-domestic buildings (with an average annual heat demand of over 100MWh) may be required to connect.
Heat networks can use a range of low-carbon and waste heat sources, including from the air, rivers and ground as well as excess heat from buildings such as data centres. As such, the government believes that zoning will offer local communities the tools to accelerate the development of heat networks and ensure that more homes and businesses can access lower-carbon, cheaper heat.
The government’s response to the heat network zoning consultation can be found on their website.
Act now for compliance
With significant changes ahead for heat network developers and operators in 2026, early action is advisable to ensure compliance and avoid financial penalties.
Suggested steps are as follow:
- identify the number of heat networks operated
- collect detailed data on the network, including size and performance
- register with the Ofgem digital platform
- ensure full compliance with new regulations relating to billing transparency, full heat metering and service quality
- assess existing networks alongside the proposed HNTAS standards to understand any required updates and identify funding opportunities
- apply for HNES funding where relevant
The time to act it now. As always, early engagement with expert end-to-end solutions providers like Baxi are at hand to make it easier to identify the solutions required to navigate the regulatory changes and support the move to cleaner heat.
Fine out more about Baxi’s heat network solutions here.
This article appeared in the June 2026 issue of Energy Manager magazine. Subscribe here.
