Heat networks regulation: fair pricing protection guidance

Details of outcome 

We consulted on a fair pricing and cost allocation guidance framework for heat networks. We received 38 responses from a range of stakeholders including:

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

We reviewed responses and considered stakeholder views. In general, stakeholders were supportive of our proposed guidance on fair pricing and cost allocation.

Whilst there was general support, we did receive feedback on potential changes that could be included prior to the publication of the first iteration of guidance to aid in clarity and understanding. Some stakeholders expressed concerns with areas of the guidance related to the ‘affordability’ and ‘fair and reasonable returns’ principles.

We have decided to proceed with the overall approach to the first iteration of guidance, focusing on the fair pricing principles and cost allocation. We have made changes to wording structure where appropriate, in response to stakeholder feedback.

In particular, we have updated the ‘industry outcome’ to make clear that sector growth is a desired outcome of this framework, and that a fair return for investors is a key element of achieving this, alongside ensuring consumers have confidence in the sector through fair pricing.

We have also decided to rename the ‘affordability’ principle to ‘consumer impact’ to minimise confusion, however the underlying principle and the areas it covers remain unchanged.

Read the heat networks regulation: fair pricing and cost allocation guidance

Read the full outcome

Read the full outcome of this consultation in our online consultation.

Original consultation

Consultation description

This consultation builds on:  

• the Heat networks regulation: implementing consumer protections consultation, published by the Department for Energy Security and Net Zero (DESNZ) and Ofgem in November 2024 and the government response published in August 2025  
• our Heat networks regulation: fair pricing protections consultation, published in April 2025 and our response, published in September 2025.  

We are now seeking views on our draft guidance for the rules and requirements set out in our heat network authorisation conditions relating to fair pricing and cost allocation.

Who should respond

We would like views from people with an interest in heat networks and particularly welcome responses from:   

• heat network operators 
• heat network suppliers  
• energy services companies  
• housing providers  
• consumer groups  
• asset owners  
• metering and billing agents  
• trade associations   

We would also welcome responses from other stakeholders and the public. 

How to respond

This consultation closed on Monday 27 October 2025.