These regulations will expand the regulation of district and communal heat networks, which may supply heating, cooling and/or hot water to customers.

Authorisations will ultimately be required to operate these networks. Binding standards of performance may be applied in the future.

The Heat Networks (Market Framework) (Great Britain) Regulations 2025 are due to begin coming into force in early 2025, with the full implementation due on 27 January 2026.

This legislation will apply across Great Britain only.

What will change?

These regulations will expand the regulation of heat networks in Great Britain. Two types of heat networks will be subject to the regime:

• District heat networks, which supply two or more buildings; and
• Communal heat networks, which are operated within a single building, such as a block of flats.

These networks may be used to supply heating, cooling and/or hot water to customers.

The definition of a ‘heat network’ does not include those serving homes in multiple occupation or those serving a single converted building with a capacity no greater than 45kWth.

Authorisations

An authorisation will be required to operate a district or communal heat network (a ‘regulated activity’).

• Authorisations will need to be applied for and obtained from the Gas and Electricity Markets Authority (Ofgem) before the heat network is operated, if it is to be commissioned on or after 27 January 2026.
• Deemed authorisations will be granted to pre-existing heat networks in operation before 27 January 2027. This authorisation will be time limited until 27 January 2028, by which date a normal authorisation is required.

Specific and general conditions will apply on heat network authorisations. Conditions may concern charges payable by customers and billing, service standards, compliance with technical standards and metering arrangements.

Standards of Performance

Regulations may be made setting required standards of performance. This may include consumer protection rules or carbon emissions limits.

Enforcement powers

The regulator is required to protect the interests of heat network customers, including reliable supplies of heating, cooling or hot water, conformity with emissions reduction commitments under the Climate Change Act 2008 and that proportionate charges are being applied.

The regulator is required to monitor and review the operation of heat networks throughout Great Britain. The regulator is empowered to undertake inspections and will be able to request relevant information.

Enforcement orders, notices and penalties may be issued to heat network operators.

Relationship with the Heat Networks (Scotland) Act 2021

Amendments to the Heat Networks (Scotland) Act 2021 recognise the Scottish heat network licensing regime as a form of heat network authorisation. Ofgem is designated as the heat network licensing authority to avoid conflicts with the regulations.

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