More than 500,000 households across Britain who rely on heat networks for their energy are set to receive significant new protections from this week, as the previously unregulated sector finally comes under the oversight of energy regulator Ofgem.
Long-Awaited Consumer Safeguards
The new regulatory framework, which took effect from January 27, brings heat network customers in England, Scotland and Wales more closely in line with those connected to traditional gas and electricity supplies. This marks a substantial shift for an industry that has operated without formal consumer protections for years.
Heat networks involve companies heating multiple buildings from a central source, often using excess heat generated from data centres, factories or other industrial processes, which is then distributed to connected properties through underground pipes.
Powers to Challenge Unfair Practices
Under the new rules, Ofgem will have the authority to intervene when heat network operators impose unjustified price increases or provide substandard service. Crucially, customers who experience service outages will now be eligible for compensation, bringing them parity with other energy consumers.
Labour Party minister for energy consumers Martin McCluskey welcomed the changes, stating: "For too long customers on heat networks have been unprotected, being hit with unfair price rises and having to manage with hugely inconvenient service outages. It's simply not good enough – and that is why from today, we're giving Ofgem new powers to act and hold heat network suppliers operating a poor-quality service to account."
Industry and Advocacy Responses
Helena Charlton, director of heat networks at Ofgem, emphasised the regulator's commitment: "Ofgem is committed to putting consumers first, and the beginning of heat network regulation marks an important step towards better protections. This change means customers will begin to benefit from stronger protections on billing, complaints and support for those in vulnerable situations."
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, described the move as "an important and long-overdue step," noting that "for years heat network customers have effectively been second-class energy consumers, facing huge price hikes, poor service and little meaningful protection."
Gillian Cooper, director of energy at Citizens Advice, highlighted the significance of the moment: "New protections for people who rely on heat networks are a pivotal moment. For too long, people on heat networks have faced gaps in support and fewer safeguards than households using gas or electricity."
Future Development and Standards
The regulatory changes come as the government aims to double the amount of heat demand met by networks over the next decade, as outlined in last week's warm homes plan. Dhara Vyas, chief executive of Energy UK, commented: "Ensuring households on heat networks are protected in the same way as other energy customers will raise standards across Britain's thousands of existing heat networks and lay a foundation from which the sector can grow."
While welcoming the new framework, campaigners have cautioned that regulation alone won't solve all issues. Francis added: "Ofgem and ministers must now make sure these powers are used robustly, vulnerable households are properly protected, and that heat networks genuinely deliver what they promise: affordable, reliable heat that helps tackle fuel poverty, not deepen it."
