Understanding Ofgem Authorisation for Heat Networks

The Energy Act 2023 established Ofgem as the regulator for heat networks in Great Britain. The Heat Networks (Market Framework) Regulations 2025 commenced on 27 January 2026, creating a formal authorisation regime for heat network operators and suppliers.

What is Deemed Authorisation?

All operating heat networks were automatically granted deemed authorisation on 27 January 2026. This allows networks to continue operating while working toward full compliance. Deemed authorisation does not remove the obligation to comply with Ofgem's authorisation conditions — consumer protection obligations became enforceable from 27 January 2026.

The Authorisation Conditions

Ofgem published its final determined Authorisation Conditions in January 2026. The conditions are structured across three sections:

• Section A (A1–A15) — Consumer protection, standards of conduct, complaints handling, Priority Services Register, billing, metering, and fair pricing.
• Section B (B1–B12) — Financial resilience, governance, and reporting obligations.
• Section C (C1–C2) — Registration and information requirements.

Registration Deadline

Operators of relevant heat networks must register with Ofgem by 26 January 2027. Ofgem's digital registration service opens in spring 2026.

Who Must Comply?

The obligations apply to operators and suppliers of relevant heat networks — district heating networks and communal heating systems supplying more than one property. Local authorities and registered providers of social housing have limited exemptions from financial resilience conditions (AC A12 and A13), but ESCOs and SPVs linked to them are explicitly not exempt.

Enforcement

Ofgem published its Heat Networks Enforcement Guidelines on 20 February 2026. Penalties for non-compliance include fines of up to £1 million or 10% of annual turnover, whichever is higher, as well as consumer redress payments where harm has been caused.