The Regulatory Landscape

We explain the upcoming timeline of regulation and key milestones under Ofgem and DESNZ - so you know what's coming, when and what to prioritise.

The Path to Ofgem

For years, heat networks have operated in a regulatory grey area, often leaving residents with limited consumer protection, poor billing transparency and unclear routes for complaints or support.

As shown in the regulatory framework diagram, that is now changing.

Under the Energy Act 2023, Ofgem has been appointed as the official regulator for heat networks, bringing the sector closer to the standards already expected across gas and electricity. Their focus is clear: improve fairness, accountability and transparency while protecting vulnerable residents.

Under the new regulations, consumers will benefit from:

Clearer billing information
Fairer and more transparent tariffs
Defined complaints and escalation routes
Greater protection for vulnerable consumers
Improved service standards across the sector

The Regulatory Framework

The shift comes at a critical time. Heat networks already serve around 500,000 consumers across the UK, with demand expected to grow rapidly as new developments move away from gas boilers and towards low-carbon heating solutions.

However, many existing networks were not built or managed to modern best-practice standards. Issues around billing, maintenance, complaints and network performance have become increasingly common across the sector.

Ofgem’s framework is designed to address these challenges by introducing clearer responsibilities for heat suppliers and heat network operators, alongside stronger protections for residents.

Ofgem will sit at the centre of a more structured compliance model involving heat suppliers, network operators, Ombudsman Services and consumer advocacy bodies.

Under the new framework, heat suppliers and operators will be expected to demonstrate:

Accurate and functioning metering
Fair and transparent billing
Safe and proactive maintenance
Proper complaints handling processes
Clear operational oversight and reporting

Operators should already be maintaining consistent audit trails and documentation including:

Meter data and read history
Tariff reviews and billing calculations
Maintenance logs and asset records
Complaints and resolution records
Network performance reporting

The expectation is simple: heat suppliers must be able to evidence visibility, accountability and control across the entire network.

Key Questions for PMs

Do I actually have a heat network – and is my client legally the heat supplier?
What's in the handover pack – and is anything missing?
Do I have a complete asset register, meter list and O&Ms?
What tariffs will residents be paying – and are they fair?
How do I spot gaps that could cause compliance or billing issues later?

The Four Fundamentals of Compliance

The easiest way to approach compliance is to focus on four core foundations:

1. Meter It - Are all meters operating correctly and reporting accurate data?

2. Bill It - Are bills fair, transparent and based on real consumption data?

3. Maintain It - Is there a proactive and reactive maintenance strategy in place?

4. Manage It - Can network performance, compliance and resident outcomes be monitored and evidenced?

When these are in place, compliance becomes far more manageable and effective.