Heat networks regulation: fair pricing protection guidance

Feedback updated 13 Jan 2026

We asked

We consulted on a fair pricing and cost allocation guidance framework for heat networks. This built on our joint consultation with the Department for Energy Security and Net Zero (DESNZ) on implementing heat networks regulations for consumer protection (2024 implementing consumer protections consultation) and our fair pricing protections consultation (April 2025 consultation). We sought feedback and views on the following areas:

  • Fair pricing principles guidance
  • Cost allocation guidance

You said

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 did

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 decided to update the ‘affordability’ principle, which is now called ‘consumer impact’, to minimise confusion and to better reflect its intended purpose and contents.

We are publishing this first iteration of guidance alongside this decision document in January 2026.

View our consultation decision (PDF, 473 KB)

Published responses

View submitted responses where consent has been given to publish the response.

Closed 27 Oct 2025

Opened 29 Sep 2025

Contact

Heat networks

HeatNetworksRegulation@ofgem.gov.uk

Overview

We are consulting on a fair pricing and cost allocation guidance framework for heat networks.

This builds on our joint consultation with the Department for Energy Security and Net Zero (DESNZ) on implementing heat networks regulations for consumer protection (2024 implementing consumer protections consultation) and our fair pricing protections consultation (April 2025 consultation).

The responses to these consultations have been analysed, with the consumer protection government response published on 8 August 2025 and the ​​response to the consultation on fair pricing protections​ published on 29 September 2025.

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.

Background

The Energy Act 2023 named Ofgem as the regulator for heat networks in Great Britain (England, Scotland, and Wales).

Our Forward Work Plan outlines the work we are doing in 2025 and 2026, including our ongoing preparations for our new regulatory responsibilities for heat networks and the commencement of the new regime in January 2026. We aim to develop a proportionate regulatory framework, balancing:

  • consumer protections
  • supporting investment in the sector
  • government net zero targets

The related draft guidance has been developed in conjunction with previous stakeholder feedback and agreed outcomes that we expect to see for heat network consumers.

We identified several common themes in the responses to the April 2025 Heat networks regulation: fair pricing protections consultation. We have taken these into consideration when developing the draft guidance.

Before you start

Read the ​​‘Heat networks regulation: fair pricing protection guidance​’ consultation and draft guidance document. You will find them in the ‘Related’ section on this page. Please refer to the guidance document when giving us your views.

Why your views matter

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

Audiences

  • Consumer groups
  • Heat network operators
  • Heat network suppliers
  • Landlords
  • Local authority
  • Social housing providers
  • Trade associations

Interests

  • Heat networks