Tom Burton, CEng, MCIBSE, a principal engineer at FairHeat.
In the media and public discourse, we often hear how deregulation is a catalyst for growth. And, of course it very much can be.
However, we hear much, much less about how good, well thought through regulation helps to deliver growth by ensuring common standards, which are essential for building trust, increasing demand and supply and delivering growth.
What do the Electricity Supply Act of 1926 and the European single market both have in common?
They are both examples of regulation which were brought in to harmonise rules which delivered significant growth and lower prices for consumers.
Heat networks are now on the cusp of going through a similar regulatory journey which will help set the heat network sector on a path to supplying DESNZ’s target of 20% of UK heat demand by 2050, up from just 3% of heat demand now.
DESNZ estimates that delivering this growth will involve investment of between £60 billion to £80 billion by 2050 and create about 30,000 jobs across the UK.
However, we believe heat networks could grow beyond that target with jobs and investment growing further too.
Becoming a regulated utility is an important journey for the heat network sector as it shows that the UK government has confidence in heat networks as a solution for decarbonising our energy supply and also for improving British energy security by providing heat from domestic sources for more British homes and more British businesses.
New regulations coming into force for heat networks include:
- Zoning: setting out where heat networks are the best solution for decarbonisation and increasing energy security.
- Consumer protection: Heat networks have until January 2027 to register with Ofgem as the new regulator which is putting in place new requirements around pricing, quality of service, and transparency.
- HNTAS: Heat networks will also need to meet the requirements of the Heat Network Technical Assurance Scheme (HNTAS).
What is HNTAS?
While many modern heat networks operate efficiently too many do not and there are currently no regulatory standards to enforce performance.
HNTAS is a new heat network technical assurance scheme that ensures a minimum level of performance and reliability for heat networks in the UK.
What does HNTAS mean for new networks? Having delivered some of the first new heat networks to go through the HNTAS pilot programme, FairHeat is pleased to say that builders who’ve adopted structured quality assurance are seeing significant capital expenditure (CAPEX) reductions, even after factoring in assessment costs.
Why? Because there has been a tendency both historically and in the present day for some heat network developers and consultancies to oversize networks and make them too complex.
The savings from HNTAS can be substantial and we’ve seen cost savings of between £500 to £2,500 per dwelling depending on technology choices.
What does HNTAS mean for existing networks?
To safeguard the performance and longevity of an asset, proactive monitoring and maintenance is a minimum requirement under HNTAS.
Local authorities, social landlords, ESCOs and managing agents operating large numbers of heat networks will also need to take a portfolio approach to prioritise which heat networks require investment first.
We are certain that minimum standards for heat networks will lead to better outcomes and lower costs for consumers and heat network investors in the long-term.
To this end heat network developers have already pledged to achieve a 7.5% reduction in the capital cost of building heat networks and a 20% cut in the cost of electricity consumed by them by 2030.
Furthermore, households connected to heat networks in England could save almost £150 million per year according to FairHeat’s analysis of HNTAS-style regulations so far.
The average annual cost to residents of heat from a heat network pre-HNTAS would fall by almost one-third (32%) and by £328 per dwelling assuming the same cost assuming 15p kw/h.
This plays into the government’s agenda to reduce costs reflected in its decision to lower energy bills by an average of £150 by removing funding for the Energy Company Obligation scheme from household energy bills.
While we appreciate there is always a cost and a time investment that organisations need to make to adapt to new HNTAS regulations, there is solid evidence that HNTAS will build trust, deliver growth and lower costs for operators and households.
And this is the kind of pro-growth regulation that should be welcomed.
This article appeared in the April 2026 issue of Energy Manager magazine. Subscribe here.