Housing associations and heat network regulation

Heat networks supply thousands of homes and non-residential buildings across the UK with heat and hot water. Two-thirds of all existing heat networks are owned and managed by social landlords, mostly in the form of communal boilers. As heat networks will be critical to our mission to decarbonise home heating by 2050, a new regulatory regime which will cover social landlords is being developed to improve and expand their use. 

We will update this page to keep you abreast of the changing landscape of heat network regulation. We also work closely with sector supplier Chirpy Heat on this topic.

About heat networks

What is a heat network?

A heat network is a mechanism for supplying heat and hot water to a home or non-residential premises. Heat networks can be either communal, or district systems. Communal systems consist of a centralised large heating appliance (in more than 90% of current cases a gas boiler) located in the building (e.g. plant room in flats). District heat networks supply heat and hot water to a network of buildings and can have more varied heat sources (e.g. geothermal or waste heat). The majority of heat networks (85%) are communal, and despite district heat networks being larger – most domestic consumers are on communal schemes. Around 90% of heat networks supply residential buildings.

How many people use heat networks in the UK?

Official government data shows that there are over 14,000 heat networks in the UK (90% in England), serving around 500,000 households. Heat networks provide about 3% of nationwide heat consumption.  

Heat networks and social housing 

Ofgem estimates 66% of all existing heat networks are owned and managed by social landlords. In fact, around 180,000 housing association households in England are connected to a heat network. There is also a relatively higher presence of heat networks in the supported and older peoples’ social housing sector.

However, the data on heat networks is not robust and in 2023, the Social Market Foundation used experimental EPC data to estimate that up to 900,000 UK households (or one in 25) are on heat networks, including one in 12 in social housing. The Heat Trust (the voluntary code of standards body for heat networks) has supported this as a more accurate picture of the scale of the sector. 

Heat networks and the net zero target

Heat networks are ‘heat source agnostic’ and therefore are relatively easy to decarbonise by changing the heating source (e.g. changing from gas to a heat pump). They also benefit from economies of scale and a greater variety of heat sources than traditional domestic heating, e.g. using waste heat or geothermal sources. The government hopes that heat networks will provide at least 20% of heat demand by 2050, and that this will be from decarbonised heat sources. To make this a reality, a new regulatory regime is being rolled out. 

The new regulatory regime 

In 2017, the Competition and Markets Authority recommended the government introduce a regulatory regime for heat networks to ensure heat network consumers have equivalent protections to other household energy consumers. 

The government has been developing the regulatory regime and legislated through the Energy Act 2023 to bring it forward. 

The regulatory regime will cover three broad areas (which we detail below): 

• Consumer protections and the regulatory framework. 
• Improving the operating standards of existing and future heat networks by mandating standards through a Heat Network Technical Assurance Scheme. 
• Expanding the number of homes connected to district heat networks through zoning.  

Ofgem will be the regulatory body for heat networks. DESNZ will oversee the Heat Network Technical Assurance Scheme working with a Code Manager. The Energy Ombudsman will act as the redress body. Citizens Advice will act as the statutory consumer advocate, mimicking their existing role in the wider consumer energy market.  

The regulatory timeline 

From early 2025, the new regulatory framework will be implemented in several stages: 

• In April 2025, the Energy Ombudsman and Citizens Advice assumed their statutory powers. 
• From 27 January 2026, Ofgem will assume its role as the heat network regulator and all existing heat networks will be deemed temporarily authorised. 
• By January 2027, all heat networks will need to have registered with Ofgem for regulation

The NHF liaises regularly with the government and Ofgem on all of these topics, and we sit on Ofgem’s Heat Network Stakeholder Advisory Group. Alongside the Heat Network, Chartered Institute of Housing (CIH) and the Local Government Association (LGA), we have set up a small group of heat network providers who meet monthly with key stakeholders to help shape the regulatory framework as it evolves. We are expecting further consultations in 2025 and 2026 and will ensure the voice of housing associations is heard.