Are You Ready for the UK's Heat Networks Regulatory Go-Live Date?

From 27 January 2026 Ofgem will commence its role as regulator of heat networks for Great Britain, backed by enforceable consumer protections, performance standards and technical requirements.  This is a significant moment for the sector, with a phased transition to a comprehensive regulatory regime running through to January 2027. 

The Heat Networks (Market Framework) (Great Britain) Regulations 2025 (Regulations) provide the legal framework for the new regime. As outlined in our previous articles on this topic (in April 2025 and August 2025), one of the Government's aims for the Regulations is to strengthen consumer protection, standardise the heat market with minimum technical standards, and support the wider adoption of low‑carbon energy sources.  Last week’s Warm Homes Plan reinforces this direction of travel, with the Government committing to unlock the potential of heat networks and describing them as a ‘proven, scalable technology' delivering the ‘lowest‑cost, lowest‑carbon heat for consumers'. 

Understanding Ofgem’s New Role and Powers

Under the new regime, Ofgem’s responsibilities include authorisation, enforcement, pricing and consumer protection. Regulated entities must maintain appropriate records, report key performance data, and comply with new authorisation conditions. Ofgem expects all customers - particularly those in vulnerable circumstances - to be treated fairly, with clear information, reliable service and fair pricing.

Under the new regime, Ofgem will have wide‑ranging enforcement powers. These include the ability to impose penalties of up to 10% of turnover (or £1 million, if higher) on operators and suppliers (as described below) that breach authorisation conditions. Ofgem will also be able to request documents, inspect premises and seize materials or equipment where necessary.

Ofgem has said it intends to take a 'flexible' approach to compliance in the early stages as it focuses on embedding the rules across the sector. Nevertheless, operators and suppliers will be expected to act quickly to resolve any issues.

Who do the Regulations apply to? 

The Regulations introduce two regulated roles:

• Operators: anyone who controls the transfer of thermal energy on the network for the purposes of supplying heating, cooling or hot water. This is typically asset owners, building owners or ESCOs who hold responsibility for infrastructure and investment; and
• Suppliers: anyone who supplies heating, cooling or hot water to heat network consumers, i.e. the entities holding heat supply contracts with customers. This may include landlords (where heat is provided under a lease), ESCOs or property management companies.

The Regulatory Landscape Ahead

Heat Network Technical Assurance Scheme (HNTAS) is being designed by the Department for Energy Security and Net Zero alongside heat network consultancy FairHeat. The aim of HNTAS is to help heat network operators ensure a minimum level of performance and reliability for heat networks in the UK - and so demonstrate compliance with the Regulations. To date, draft HNTAS requirements have been piloted on new builds and existing networks, with a planned launch in 2027 (previously 2026) once policy proposals have been consulted on and finalised. The Heat Network Technical Standards consultation, which seeks views on HNTAS, is still live and closes on 15 April 2026. 

Time to Act

Compliance with the Regulations is required from 27 January 2026. Existing operators will be deemed authorised, but must register with Ofgem by 26 January 2027 via the Heat Networks Digital Service. Any new schemes starting from 27 January 2026 onwards must apply for authorisation before commencing operations.

Bird & Bird has advised on district heating and utility projects for more than 15 years. We can help you meet these new regulatory requirements with clarity and confidence. We combine deep technical understanding with strategic and commercial insight, helping clients design, procure and deliver heat networks that are future‑proofed for decarbonisation and regulation. 

If you would like to understand how the Regulations could affect your business - and how we can support your compliance journey - please get in touch. 

International Perspectives: Insights Across Europe 

Beyond the UK, insights from our experts highlight the approaches countries are taking to developing the sector across Europe.

The Netherlands: The new Dutch collective heat act (Wet collectieve warmte) will accelerate the realisation of connections to existing and new heat networks. To phase out the use of natural gas for heating, the act includes ever stricter carbon emission target related heating. You can read more about this here, or contact Matthijs van Leeuwen (Partner) in our Amsterdam office. 

France: In order to reach the 68 TWh delivered by 2030 through district heating, it is estimated that 30 billion euros investments are needed. France is actively supporting SMR projects in order to deliver new solutions for district heating by 2035. Boris Martor is a partner in our French team. 

Germany: In Germany, the Heat Planning Act and amended District Heating Ordinance are creating investment certainty and accelerating the transformation towards decarbonised heat networks. Contact Dr Sandra Schuh, LL.M. (Partner) and Michelle Pohl (Associate) in our German team.

Finland: The Finnish Act on Banning the Energy Use of Coal, adopted in 2019, has significantly sped up investments in heat production and heat storage. In 2024, for example, Helen Oy invested €600m in the electrification of heating, and Vantaan Energia made €131m investments in the electrification of heating and the use of waste heat from waste treatment. Contact Laura Huomo (Partner) and Suvi Kurki-Suonio (Senior Associate) in our Finnish team. 

Sweden: New legislation is being prepared in Sweden to increase customer protection, improve pricing transparency, and enhance network efficiency. Sweden’s Energy Market Inspectorate delivered their final suggestions on this in December 2025, including how to implement the improved Energy Efficiency Directive (Directive (EU) 2023/1791). The Swedish Government is now reviewing the recommendations for implementation, including expanded supervisory powers and information obligations. Lukas Holmberg is a partner in our Swedish team. 

Written by George Matthew and Rachel Savin