Heat networks regulation: authorisation conditions and guidance on measures to mitigate the risk and impact of financial failure

Our consultation on measures to mitigate the financial failure of heat networks in England, Scotland and Wales (Great Britain). These proposals include the scope of financial provisions and continuity arrangements for heat networks and the regular ongoing financial monitoring of the sector. 

Details of outcome

We received 31 responses from a range of stakeholders including:

• consumer advocacy groups  
• energy network operators
• energy suppliers
• housing associations
• local authorities
• metering and billing providers
• property management companies
• trade associations

In general, stakeholders were supportive of our proposed authorisation conditions and their scope. Whilst stakeholders were supportive of guidance, we did receive feedback on potential changes that could be included prior to their publication, as well as additional requests for support such as worked examples.

We have decided to proceed with the overall approach proposed in the consultation, with changes made to reflect stakeholder feedback.

The authorisation conditions can be found in the appendix of our outcome document.  

We will publish an updated guidance document ahead of regulatory commencement in January 2026.  

Read the full outcome

Read the full outcome to this consultation on Citizen Space.

Original consultation

Who should respond 

The consultation will be of interest to the heat network industry, including: 

• consumer advocacy groups
• industry trade associations
• energy supply companies
• local authorities
• housing associations 
• managing agents, property management companies and developers
• landlords
• building owners
• heat network consumers  

The proposals on recovering costs from a Special Administration Regime (SAR) will also be relevant to the gas and electricity sector, including network companies and supply licensees.

Background

The Energy Act 2023 named Ofgem as the regulator for heat networks in Great Britain. Our most recent Forward Work Programme outlines how we intend to develop a regulatory framework for heat networks which is proportionate, in line with our duties to protect consumers, and which supports:  

• investment
• market growth  
• meeting the Government’s net zero targets   

  This consultation builds on the approaches proposed in:  

• our 2023 joint consultation with the Department for Energy and Net Zero (DESNZ) on heat networks regulations for consumer protection  
• the 2024 government response to that consultation
• the contents of the Heat Networks (Market Framework) (Great Britain) Regulations 2025
• our 2024 joint consultation with DESNZ on heat networks regulations for implementing consumer protections
• the government response to that consultation

Why your views matter 

Your feedback will help us develop new regulations to protect consumers and improve network reliability, while allowing growth in the sector.