Heat networks regulation: enforcement guidelines and penalty policy

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Closes 6 Oct 2025

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Enforcement Guidelines

The proposed Heat Networks Enforcement Guidelines explain the enforcement framework that we will use when deploying itsour powers to investigate and, where appropriate, take enforcement action.

In particular, the guidelines set out:

  • how we may use our enforcement powers and tools in situations relating to relevant authorisation condition and requirement contraventions
  • how our decision-making process works
  • how contraventions will be addressed and deterred
  • the actions we may take as an alternative to exercising out statutory enforcement powers

Our proposed Heat Network Enforcement Guidelines in general follow the same structure as our gas and electricity Enforcement Guidelines.

However, there are several material differences that reflect the distinct statutory framework and characteristics of the heat networks sector:

  • references to statutory instruments have been updated to reflect that our regulatory powers over heat networks come from the Regulations
  • we have considered differences in the enforcement framework for heat networks compared to our existing powers and used terminology suited to the heat networks regime such as “authorisation” instead of “licence”
  • our guidance reflects that strategic objectives for heat networks differ from those in the gas and electricity frameworks and are set out in the Regulations, aligning with our wider regulatory responsibilities as detailed in section 1.9 of the Enforcement Guidelines
  • under the Regulations, the maximum financial penalty is the greater of £1 million or 10% of the authorised person’s turnover, allowing proportionate action where 10% of turnover is insufficient - for example where a low turnover company has gained significantly from contraventions
  • the Regulations allow longer timeframes for key enforcement steps than the gas and electricity regimes, with up to 12 months from service to confirm a provisional order and up to five years from confirmation or final order to impose penalties or redress
  • given the expected volume and nature of heat network enforcement cases, decisions may be made by the Director for Enforcement (or a nominated alternate) or a Deputy Director to support timely, proportionate enforcement with appropriate governance
  • the Heat Networks Enforcement Guidelines do not include detailed guidance on cases involving consumer law or the Competition Act, and where relevant we will rely on existing guidance in Ofgem’s gas and electricity Enforcement Guidelines - while welcoming views on whether this cross-reference is clear or if further clarification is needed

While the existing Enforcement Guidelines have informed our approach, these are likely to be updated to reflect the Digital Markets, Competition and Consumers Act (DMCCA) and other recent changes at the next scheduled update.

Before you give us your views

You’ll need to read the draft Heat Networks Enforcement Guidelines (PDF, opens in a new window).

1. Are the enforcement powers, procedures and governance set out clearly in the Heat Network Enforcement Guidelines? If not, please specify which areas need to be clearer and why.
2. Is the cross-reference to Ofgem’s main Enforcement Guidelines in relation to consumer law and Competition Act cases clear and sufficient? If not, what additional information or clarification would be helpful?
3. Is there anything relevant to the heat network sector that we need to take account of in the approach we have outlined for enforcement? What is this, and where do you think it would change our approach?
4. Do you have any comments on any other areas of the guidelines?