Legal briefing | 05 Feb 2026 |

The new heat networks regime: what do regulated businesses need to do and when?

Although the new regulatory regime for heat networks came into force on 27 January 2026, a number of aspects are being phased in over the next 12 months. We look at what businesses caught by the regime need to do – and when.

An overview of the regulatory regime

In broad terms, regulated entities are required 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.

But the regulator, Ofgem, is proposing to phase in key aspects of the regime in the course of 2026. This does not mean it will refrain from acting if, for example, it believes that consumers are likely to suffer serious harm – and it is encouraging all heat network suppliers to join the Energy Ombudsman Heat Network Supplier scheme. However, by way of example, regulated entities will not be expected to supply contingency plans to Ofgem immediately (see further below for likely timing).

For discussion of which businesses are regulated entities under caught by the new regime, see our earlier briefing - but note that landlords of buildings served by heat networks will need to consider carefully whether they may be caught.

April 2026: a key deadline for reporting obligations

Although Ofgem has indicated that it does not expect to require reports from regulated entities until "later in 2026", it has also stated that it expects regulated entities to start collecting data from April 2026. It follows that regulated entities need to have mechanisms in place to record relevant data from 1 April this year. Whilst the guidance on this aspect has yet to be finalised, the data is likely to include a broad range of metrics on matters including:

billing and pricing, such as standing charges, unit rates, total charges for all domestic customers, costs and numbers of customers by payment method
service quality, such as complaints and interruptions to service (both planned and unplanned)
vulnerability and debt, such as the number of domestic customers in debt and/or on repayment plans and the number of domestic consumers considered to have vulnerable characteristics (e.g. elderly, disabled etc)

Registration: by 27 January 2027

Regulated entities involved with existing heat networks will also need to have registered with Ofgem by 27 January 2027. Whilst this deadline may seem some way off, regulated entities will need to carry out a significant amount of work before they are in a position to register. Among other things, they will need to:

draw up continuity plans (so that, on applying to register, they are in a position to confirm that a plan has been put in place, which can be provided to Ofgem on request);
confirm that individuals in positions of "Significant Managerial Responsibility or Influence" (SMRI) are "fit and proper", so that an SMRI declaration can be submitted (this in turn will involve confirming that appropriate policies and procedures in place);
confirm that a range of other measures are in place (if applicable), such as a priority services register listing vulnerable consumers and a complaints management procedure;
provide a significant amount of other information, including numbers of customers and technical specifications of the relevant heat network(s).

Prioritise compliance with consumer obligations

Last but by no means least, Ofgem is likely to be particularly concerned if there is evidence of consumer harm. In view of this, regulated entities should make it a priority to review their interactions with consumers and address any areas that need upgrading to comply with consumer protection obligations under the new regime – such as pricing and billing, complaints processes or treatment of vulnerable consumers.

What about HNTAS?

HNTAS stands for the Heat Network Technical Assurance Scheme, which is a set of minimum performance and reliability standards that all heat networks will be expected to comply with. The aim is primarily to protect consumers from poor outcomes, whilst ensuring that heat networks contribute as much as reasonably possible towards the achievement of the UK's net zero targets. The Government is still consulting on the detail of the scheme and the closing date for responses is 15 April 2026, but the final version is expected to be published later this year. The scheme is expected to be applied to new networks from 2027. These will need to demonstrate that they meet HNTAS standards from the outset, through their design, construction and commissioning phases. Existing networks are likely to be given longer to comply, although in some cases, significant work may be needed to ensure that HNTAS standards are being met (broadly speaking, the older the heat network, the more work is likely to be needed). In view of that, businesses involved with heat networks will need to assess what improvements/changes are likely to be required– and this should ideally take place alongside steps to comply with the new, broader regulatory regime described above (the draft standards should enable a meaningful assessment to be made now, rather than waiting until later in the year).

How we can help

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 contracts, construction agreements, leases and 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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