Why Education Institutions Must Prepare for Impending Heat Network Regulation

With the UK government advancing its net zero commitments, education institutions operating or connected to heat networks must prepare for a major regulatory shift. From January 2026, Ofgem will begin regulating heat networks in Great Britain for the first time under the Energy Act 2023 and the Heat Networks (Market Framework) Regulations 2025.

This change will bring formal oversight, service standards and consumer protections to a sector that has, until now, existed outside the regulatory frameworks governing gas and electricity

What Are heat networks?

Heat networks, sometimes referred to as district or communal heating, distribute heating, hot water and, in some cases, cooling from a central source to multiple buildings. Many universities and colleges rely on these systems to supply energy across campuses, halls of residence and research buildings.

In October 2024, the government named six towns and cities for the first heat network zones: Leeds, Plymouth, Bristol, Stockport, Sheffield and two sites in London. Within these zones, certain buildings will be required to connect to a central network within set timeframes.

Why the regulation matters

Historically, heat networks have lacked the consumer protections and price regulations that apply to other utilities. The new regime is intended to close that gap, delivering:

• Fairer, more transparent pricing and billing
• Improved service standards and system reliability
• Access to complaints and dispute resolution via the Energy Ombudsman

The regulatory framework also introduces Ofgem oversight and establishes obligations on providers to meet specific technical, customer service and reporting standards.

Key dates and compliance milestones

Education institutions must be aware of the following:

• April 2025 – Launch of consumer advocacy services via Citizens Advice (England and Wales) and Advice Direct Scotland
• January 2026 – Regulations come into force; operators must comply
• Spring 2026 -January 2027 – All existing heat networks must register with Ofgem under “deemed authorisation” using the new digital platform

What this means for education institutions

Whether acting as heat suppliers or owning infrastructure connected to a network, education providers need to prepare for increased regulatory scrutiny and operational responsibilities.

1. Operational readiness

Institutions will need to review whether their systems meet technical standards and service expectations. This may include upgrades to metering and billing systems, better record keeping, and formalising service protocols for users across campus.

2. Governance and accountability

Those operating as heat suppliers will fall under Ofgem’s regulatory regime. This includes the possibility of audits, data reporting requirements, and financial or reputational consequences in the event of non-compliance.

3. Financial planning

There may be a need to budget for infrastructure upgrades, improved digital systems, staff training and new internal processes to ensure compliance and support customer service.

4. Reputation and student experience

Reliable heating and transparent billing are central to student satisfaction. Institutions that fail to meet the new standards risk reputational damage and criticism around their sustainability commitments.

What should education providers do now?

To get ahead of the upcoming changes, institutions should consider taking the following steps:

• Carry out a regulatory impact assessment of their current heat network operations
• Engage with Ofgem’s guidance and consultations, especially in areas relating to consumer protection and authorisation
• Begin early discussions with the Energy Ombudsman to understand expectations and ensure complaints processes are in place
• Review billing practices, customer communications, and service response mechanisms

This is an important moment for the future of heat networks in the UK. Education institutions must act now to prepare for the upcoming regulation, to meet compliance deadlines, improve service quality and demonstrate their commitment to sustainability and student welfare.