Heat networks are now subject to a regulatory regime broadly aligned with gas and electricity – with major ramifications for registered providers of social housing. Mechanical engineer Ben Heede and asset management experts Ian Foster and Kevin Hartshorn explain their new obligations
Heat networks are undergoing the most significant regulatory reform for decades.
On 27 January 2026, the Heat Networks (Market Framework) (Great Britain) Regulations were introduced – bringing heat networks into the same regulatory regime as gas and electricity for the first time. Registered providers (RPs) operating communal or district heat networks are now legally classed as heat network suppliers, and they face similar obligations to gas and electricity firms. That includes meeting new consumer protection and pricing rules and enhanced technical and safety standards, and providing detailed operational data to the regulator, Ofgem.
Crucially, it will mean treating heat networks as a separate asset class within business plans, so that accurate assumptions can be made about investment and compliance.
Why do heat networks need new regulations?
The new regulations are about bringing heat networks up to modern standards, and bringing some accountability and governance to them for the first time. Operators have to improve the efficiency and management of heat networks, which should lower running costs and enable them to be decarbonised. It’s also about improving the consumer experience and increasing transparency.
Historically, district heat networks haven’t been maintained or operated very well, and the sector has been quite poor at basic elements like accurate metering and billing. For example, we believe there are still a large number of heat networks that don’t comply with the mandatory requirements under the Heat Networks (Metering and Billing) regulations, which initially came into force back in 2014.
In the short term, RPs face new compliance duties, and in the medium term, potentially very significant investment in heat network upgrades. But in the longer term, this should make them easier and cheaper to run, improve service and reliability, and reduce energy bills for residents.
What do registered providers have to do?
There are two parts: the additional administration to fulfil their compliance duties, and the technical work to bring networks up to standard.
The first part starts now: RPs with heat networks have to register them with Ofgem by 26 January 2027. This means providing details about their organisation, the technical specifications of the network, the customers it serves, and a continuity plan, complaints procedure and a Priority Services Register of vulnerable consumers. They will also have to submit quarterly and annual data to Ofgem on an ongoing basis.
As for the second, the Heat Network Technical Assurance Scheme (HNTAS) is expected to launch in 2027, introducing minimum technical standards for all networks. This is likely to involve mandatory upgrades to insulation, pipework, heat interface units, flow/return temperature controls and overall system efficiency, though it will be phased and proportionate.
How hard will it be to meet the regulations?
For new systems, meeting the technical standards should be relatively straightforward. But the regulations apply to existing networks too, and that is where the challenges lie, especially on large estates built between the 1960s and the 1990s.
Retrofitting heat networks can be intrusive, expensive and operationally complex, particularly on postwar estates. Managing disruption to residents and maintaining the heat and hot water supply during the works adds to the difficulty.
What will compliance involve?
This is a whole new area of compliance that RPs haven’t had to do before, and will undoubtedly add to pressure on internal resources and budgets. Attention has been focused elsewhere and resources diverted to meet building safety requirements and compliance in other areas. Most RPs won’t have included heat network upgrades within their investment plan, but now this is becoming a must-do not a nice-to-have, they’ll be wondering how to fund it on top of everything else.
From a governance point of view, heat network operators will need to establish new processes and systems, and bring their customer service up to date.
What does this mean for housing business plans?
One big change will be where responsibility for heat networks sits within RPs themselves. Historically, it has been treated essentially like a service charge, so it probably sits mainly with finance, or in the background of tenancy management. Now it’s moving into day-to-day property management, and into the asset management side as well. We need to start thinking about planning-in maintenance and upgrades, and getting it right in the investment profile. Asset managers haven’t had to think about heat networks in the past, and suddenly they could be hit with large costs or penalties.
Importantly, heat network components – including metering, controls, monitoring systems and digital infrastructure – should be treated as distinct asset classes within 30-year business plans. Their renewal cycles differ from standard communal heating plant, and in some cases, they may not be replaced or upgraded when systems are renewed. Accurately separating these assumptions is essential for long-term compliance, asset planning and financial resilience.
What about the benefits?
This is another challenge for housing organisations, but it is directly linked to other areas of compliance such as decarbonisation, damp and mould, and the new Decent Homes Standard. Rather than waiting until the enforcement date is looming, by integrating intelligence on their properties, landlords could make progress on all three by moving towards a demonstrable, evidence-led understanding of how homes perform.
Meeting the new standards will involve significant capital expenditure, but RPs will reap the benefits in the long run – in five, ten or 15 years, operating these systems will be more straightforward and the costs of maintaining them should come down. They will be more efficient and less prone to failure.
From residents’ point of view, comfort, reliability and cost predictability will improve. Not everyone’s bills will go down, but they will be fairer and more transparent, and there should be more winners than losers.
The new regulations shine a light on a historically neglected part of the housing estate, bringing it into the consumer choice and decarbonisation agendas. They will raise standards, improve customer experience and, ultimately, result in homes that are safer, healthier and more affordable for their residents.
Kevin Hartshorn is a partner at Ridge and Ian Foster is a senior associate, both in the property consultancy team, advising registered providers on strategic transformation, asset management, governance and compliance. You can reach Kevin at kevinhartshorn@ridge.co.uk and Ian at ianfoster@ridge.co.uk
Ben Heede is an associate partner at Ridge, and chartered mechanical engineer who advises registered housing providers on all aspects of heat networks. Email him at benheede@ridge.co.uk
