The Energy Act 2023 was passed by the UK Parliament in October 2023, giving the UK Government powers to set new consumer protections and technical standards for heat networks across Great Britain1. Regulation of the heat networks market in Scotland is devolved, and the Heat Networks (Scotland) Act 2021 introduced powers to regulate that market for the first time, while consumer protection matters including pricing, transparency and quality of service remain reserved to the UK Parliament1.
The Scottish Government states that it continues to work with the UK Government and Ofgem on the regulations made under the Energy Act 20231. The phase-in of consumer protection and authorisation rules across Great Britain has already begun. Advice and advocacy services for consumers started in April 2025; in Scotland, Consumer Scotland, Advice Direct Scotland and the Citizen's Advice Extra Help Unit will advocate for Scottish consumers and escalate key issues, with the Energy Ombudsman providing an independent escalation route for complaints1.
"on 27 January 2026, Ofgem's formal role as regulator of heat networks began, with the initial set of rules in place"
Existing heat network operators and suppliers have been given a "deemed authorisation" and have until 26 January 2027 to register with Ofgem; after that date all new heat networks must apply to Ofgem for authorisation1. Ofgem will collect data through registration to inform work on pricing benchmarks and Guaranteed Standards of Performance1. The Scottish Government says these protections will over time give consumers greater confidence, with a more consistent standard of service and a clear route to hold operators and suppliers accountable1.
Just under 2% of Scotland's heat is supplied from heat networks1. The Heat Networks (Scotland) Act 2021 sets targets for thermal energy supplied through heat networks:
| Target year | Output | Share of current non-electrical heat consumption |
|---|---|---|
| 2027 | 2.6 TWh | approximately 3% |
| 2030 | 6 TWh | approximately 8% |
| 2035 | 7 TWh | approximately 9% |
Funding for projects comes through Scotland's Heat Network Fund, launched in February 2022, which provides capital grant funding to public and private sector organisations for new zero-emission heat networks and communal heating systems, and for the expansion and decarbonisation of existing heat networks1. The Heat Network Support Unit, sponsored by the Scottish Government and delivered with the Scottish Futures Trust and Zero Waste Scotland, offers grant funding and expert advice during pre-capital stages of development1.
Why it matters for households
For a household whose home is heated through a communal or district system rather than its own boiler, the practical change is who stands behind the service. Under the arrangements described, a heat network operator or supplier must register with Ofgem, and the regulator is to develop pricing benchmarks and guaranteed standards of performance1. Until those benchmarks and standards are in place, the Scottish Government has not reported what the specific service levels or pricing protections will be. Households on heat networks have had an advocacy and complaints route since April 2025, including escalation to the Energy Ombudsman1. For homes not on a heat network, the Act and the Scottish regime do not change how they are heated; heat networks supply just under 2% of Scotland's heat1. The targets imply a substantial expansion of the sector, which is the route by which more homes could in future have their heating supplied from a central source rather than an individual gas boiler1.
What happens next
Existing heat network operators and suppliers must register with Ofgem by 26 January 2027; new heat networks must apply for authorisation after that date1. The Scottish Government published a draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill in November 2025, which proposes an opt-in licensing regime giving developers rights and powers for matters such as road works, survey and compulsory purchase, and proposes that certain buildings within a designated heat network zone cease using polluting heating systems and adopt a decarbonised heat solution1. The Scottish Government says it continues to work with the UK Government and Ofgem to make the GB-wide and Scottish regulatory regimes interoperable and to minimise duplication1.