Heat networks regulation: where are we now?

Existing heat network operators and certain landlords need to ensure that they've registered with Ofgem by 27 January 2027. As we explain below, this may require a significant amount of preparatory work. We look at what regulated businesses need to do, as well as providing updates on heat network zoning and the Heat Network Technical Assurance Scheme (HNTAS).

The new heat networks regulatory regime – a reminder

The new supervisory regime for heat networks, introduced under the Energy Act 2023, came into force on 27 January 2026. As the new sector regulator, Ofgem expects regulated entities to:

comply with consumer protection obligations relating to pricing and billing, performance standards and compensation, unbundling of the service charge from heat supply (so consumers can easily see how much their heating/hot water is costing) and treatment of vulnerable consumers, such as the elderly or disabled;

draw up contingency plans designed to ensure continuity of supply in the event of network failure or operator insolvency and keep these under review; and
comply with various reporting obligations designed to enable Ofgem to monitor compliance with the above obligations and check that entities involved in heat networks remain on a sound financial footing.

For more information on heat networks generally, see our short guide to heat networks in the UK.

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Who is caught by the new regime?

Unsurprisingly, heat network operators will be regulated – but landlords could also be caught (where they are involved in the supply of heat and hot water via networks). For example, if a lease includes the provision of heat and hot water via a heat network, the landlord may fall within scope – because it will be regarded as a "supplier". By contrast, where an energy services company (commonly referred to as an "ESCO") is appointed to run the heat network and contracts directly with customers, the landlord is unlikely to fall within scope. This arrangement – which avoids the landlord being regulated – is what we are typically seeing with new developments. However, where no ESCO is involved (or where the ESCO does not contract directly with customers), landlords could be caught.

What do regulated businesses need to have done by 27 January 2027?

Regulated entities must register their heat networks with Ofgem by 27 January 2027. However, there is a significant amount of work to carry out beforehand and some obligations are already live. In particular, since April 2026, regulated entities have been expected to collect data to meet their new reporting requirements. This information will need to be provided to Ofgem once its new digital platform is fully up and running (it is currently in a beta testing phase). Since our last update, Ofgem have published guidance to help heat network suppliers and operators understand their reporting obligations. Other steps that regulated businesses will need to take in order to register include:

Checking that individuals with "significant managerial responsibility or influence" meet Ofgem's "fit and proper" test and completing a declaration to this effect;
Pulling together a significant amount of information about the relevant heat networks, ranging from technical data through to numbers of customers, metering and billing arrangements, and details of any vulnerable consumers, so that it can be provided to Ofgem as part of the registration process; and
Confirming that appropriate continuity plans are in place (if such plans do not already exist, they will need to be created before you can register).

Heat network suppliers must also register with the Energy Ombudsman's heat network supplier scheme.

What's the latest on heat network zoning?

For heat network operators, the key benefit of being within a designated heat network zone is the power of the Zone Coordinator (typically the local authority) to require certain buildings within the zone to connect to the heat network. This should give investors greater certainty about the number of likely network connections and support private sector funding of large-scale heat networks.

For property developers and owners, an obligation to connect to a heat network may initially seem like an unwelcome restriction on their freedom of choice. However, it is expected that for many, heat networks will provide an attractive and low cost solution to the need to decarbonise heating, particularly for new developments facing more stringent energy efficiency requirements.

In January 2026, the Government published its response to the 2023 heat network zoning consultation, setting out its proposed approach for England. The Department for Energy Security and Net Zero (DESNZ) has confirmed that draft regulations are expected to be laid before Parliament later this year. In the meantime, various pilot programmes are underway in Bristol, Leeds, Liverpool, London, Manchester, Oldham, Plymouth and Sheffield.

What is the Heat Network Technical Assurance Scheme (HNTAS) and when will it be introduced?

HNTAS is a set of minimum performance and reliability standards that all heat networks will be expected to meet. Its twin objectives are to protect consumers from poor outcomes and to ensure that heat networks contribute as much as reasonably practicable to achieving the UK's net zero targets.

The Government's consultation on the scheme ended in April 2026. This was closely followed by a technical feedback process in May, during which industry stakeholders were invited to comment on draft code and standards. The Government is currently considering the feedback, with HNTAS still expected to be phased in over 2027. New networks will need to meet HNTAS standards in full, whereas existing networks are likely to be given longer to comply (because in some cases, significant upgrades may be needed).

How we can help

While there are still months to go before the registration deadline, heat network operators and suppliers should be actively preparing to meet their new obligations.

Travers Smith offers a comprehensive approach to navigating the complexities of heat networks:

Dedicated Commercial Team: Our experts can guide you through regulatory compliance, zoning requirements and the integration of heat networks into development projects. We also work closely with experts from our Real Estate, Planning and Construction teams.
Contract Negotiation and Drafting: We have considerable experience in drafting and negotiating robust and fair contractual arrangements with all stakeholders, including ESCO concession agreements, construction agreements, leases and customer supply agreements, and advising on planning and regulatory requirements.
Legal and Strategic Advice: We leverage our extensive experience to optimise your business strategy, whether implementing new heat networks or expanding existing ones.

Our combined expertise ensures your project is not only legally compliant but strategically positioned to benefit from the evolving regulatory landscape. Contact us today to learn how we can support your initiatives in the heat network sector.

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