Heat network regulation came into force this week, meaning operators and suppliers need higher standards on customer service, billing transparency and pricing fairness.<\/p>\n
Regulation of the sector is being dealt by Ofgem, which also oversees the gas and electricity markets, while operators have one year to register.<\/p>\n
Heat networks supply heating, cooling or hot water from a central source to multiple homes or businesses. They are commonly used in shopping centres, mixed-use developments, offices and major retail estates.<\/p>\n
Laurence Lacey from national law firm Clarke Willmott said: \u201c\u201cThe regulation of district heat networks is a huge shift in the legal and operational environment for the sector.<\/p>\n
\u201cFor developers, owners, and operators, compliance planning is essential \u2013 from governance reviews and technical audits to customer service redesign.<\/p>\n
\u201cActing proactively will ensure compliance and protect project value and give confidence to consumers and investors in this newly regulated market.\u201d<\/p>\n
The Energy Act 2023 and Heat Networks Regulations 2025 give Ofgem authority to regulate heat networks, improve standards, protect consumers and drive decarbonisation, while supporting investment, encouraging waste heat use and safeguarding against local monopolies.<\/p>\n
Operators must secure Ofgem authorisation, similar to licensing in the gas and electricity sectors, and comply with technical standards, reporting, consumer communication, pricing and performance rules, and provide access to the Energy Ombudsman.<\/p>\n
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Ofgem has the power to impose penalties of 10% of turnover, or \u00a31 million for non compliance.<\/p>\n
Consumers will have access to the Energy Ombudsman for dispute resolution.\u00a0<\/p>\n
Lacey added: \u201cGetting authorisation in place early is key to meeting the new standards and keeping projects on track.<\/p>\n
\u201cOperators and developers must review governance, audit technical systems and update customer processes now to protect project value and ensure compliance in this newly regulated market.<\/p>\n
\u201cNetworks that plan ahead and align with these requirements will be best placed to meet expectations and thrive in this regulated environment.\u201d<\/p>\n
By January 2027, most of Ofgem\u2019s regulatory conditions, including pricing rules and performance standards, are expected to be fully operational.<\/p>\n
In Scotland, similar standards are being introduced under the Heat Networks (Scotland) Act 2021.<\/p>\n","protected":false},"excerpt":{"rendered":"
Heat network regulation came into force this week, meaning operators and suppliers need higher standards on customer service, billing transparency and pricing fairness. Regulation of the sector is being dealt by Ofgem, which also oversees the gas and electricity markets, while operators have one year to register. Heat networks supply heating, cooling or hot water […]<\/p>\n","protected":false},"author":1,"featured_media":7937,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-7936","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n