Ofgem to regulate heat networks

Ofgem has taken on regulation of heat networks in England, Scotland and Wales, with the new regime commencing in January 2026. The Energy Act 2023 named Ofgem as the sector regulator for Great Britain¹. The Energy Ombudsman states that heat networks "will be regulated by Ofgem from January 2026 in England, Scotland and Wales"², and a Commons Library briefing records that "From January 2026, Ofgem will begin regulating heat networks"³. Ofgem's own decision document puts regulatory commencement at 27 January 2026¹.

Ofgem published finalised consumer protection guidance ahead of that date, following a consultation that drew 37 responses from trade associations, consumer groups and heat network operators, with stakeholders asked to answer 27 questions¹. The guidance covers the Standards of Conduct, billing and transparency, back-billing, heat supply contracts, protections for consumers in vulnerable situations and security of supply¹. Ofgem said it had not set prescriptive minimum standards for how the Standards of Conduct should be achieved, describing the framework as "flexible, principles-based" for networks of varying size and complexity¹. It also amended an authorisation condition after stakeholders called for a twenty-four-hour enquiry service for consumers experiencing an interruption in supply, regardless of the reason¹.

"Alongside this document, we have published a finalised version of the guidance ahead of regulatory commencement on 27 January 2026."

The Energy Ombudsman has accepted heat network disputes since 1 April 2025, before Ofgem's regime began. Consumers must first complain to their heat network supplier, which has eight weeks to resolve the problem; if it does not, or issues a deadlock letter, the dispute can go to the Ombudsman². Ofgem confirmed the escalation period to the Energy Ombudsman remains eight weeks for heat networks¹. The Ombudsman can only consider disputes where the consumer became aware of the problem on or after 1 April 2025, with exceptions for networks that were Heat Trust members before that date and for certain Energy Bills Relief Scheme or Energy Bills Discount Scheme matters².

The Ombudsman estimates there are around 14,000 heat networks in the UK, supplied by heat network suppliers responsible for infrastructure and metering. These are often housing providers such as local authorities, housing associations or private landlords². Heat networks are communal systems, serving a single building or site, or district systems serving multiple buildings in a local area². The Scottish Government reports that heat networks currently supply only 1.5% of heat in Scotland, with analyses estimating that up to approximately 20% of heat demand from buildings could be met by district and communal heating in time⁴.

Why it matters for households

For homes on a heat network, heating and hot water arrive through pipes from a shared source rather than an individual boiler, and charges may sit inside a service charge or rent, or arrive as a separate bill². Until now, these households did not have the same regulatory protections as gas and electricity customers. The government describes the new regime as providing heat network consumers with "equivalent protections to those in gas and electricity markets, including designating Ofgem as the sector regulator"⁵. In practice this means Ofgem oversight of conduct, billing, contracts and vulnerable-consumer protections, and an established route to the Energy Ombudsman where a supplier does not resolve a complaint². A household on a heat network cannot switch supplier in the way a gas or electricity customer can, so the standards applied by the network operator and the redress route are the main levers available. Ofgem notes that it generally does not intervene in individual disputes between consumers and energy businesses, including heat suppliers and operators¹.

What happens next

The Scottish Government intends to introduce a draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill as early as possible in the next parliamentary session, subject to the 2026 election and clarity on the UK Government position. It plans powers for a new licensing system and provisions to work alongside the wider UK authorisation regime introduced in January 2026⁴. The UK government says it will support at least 10 of the largest English towns and cities to establish heat network zones soon after zoning regulations go live later in 2026⁵.

Sources5 cited

1. Heat networks regulation: consumer protection guidance, consult.ofgem.gov.uk
2. All about heat networks: your rights and how to… | Energy Ombudsman, energyombudsman.org
3. [](https://researchbriefings.files.parliament.uk/documents/SN06163/SN06163.pdf), researchbriefings.files.parliament.uk
4. 4. Scottish Government Response to Taskforce Conclusions - Green Heat Finance Taskforce reports: Scottish Government response - gov.scot, gov.scot
5. CBGDP investor factsheet: Heat and buildings (web accessible) - GOV.UK, gov.uk