Heat networks provide heating, cooling and hot water to multiple properties in a building or to multiple buildings from a single source.
Ofgem provides a more exact definition of a heat network as:
A network that, by distributing a liquid or a gas, enables the transfer of thermal energy for the purpose of supplying heating, cooling or hot water to a building or persons in that building, and includes any appliance the main purpose of which is to heat or cool the liquid or gas.
Communal and district heat networks
There are generally two types of heat network, communal and district heating. While both are classed as a type of heat network, there are some fundamental differences.
Communal heating usually serves a single building or site with a shared, central heat source, such as a fossil fuel boiler or heat pump. They are common in residential blocks such as flats. Heat from the central source is sent to each home in the block via layers of pipework. Sometimes, each home will have their own meter, allowing occupants to control and understand how much energy they use. However, many communal systems remain unmetered.
District heating systems are typically much larger, with a significant central heat source distributing heat to several, sometimes dozens, of buildings in the local area. Their heat source is often different, and can be generated by a very large heat pump or via industrial waste heat, for example. Similarly to communal systems, individual homes in buildings connected to the district network will sometimes be metered, but often they will not.
Both communal and district heating systems will be regulated by Ofgem.
Heat network suppliers and operators
In addition, Ofgem draws a distinction between the heat network supplier, and the heat network operator. These are often the same entity or organisation, but not always.
A heat network supplier is defined as any person or organisation that supplies and charges for the supply of heating, cooling or hot water to customers through a heat network.
A supplier has responsibility for operating a network to generate heating, cooling or hot water, and distribute this supply to customers. Where multiple parties are involved in running a network, the heat supplier is the beneficiary of the customers’ payments. Typically, this is the party using customers’ payments to pay fuel bills to keep the network running.
A heat network operator is defined as the person or organisation controlling the transfer of thermal energy on that heat network for the purposes of supplying heating, cooling or hot water.
The operator will be the entity that has sufficient control over the material assets used or needed to comply with the regulatory framework, and they will generally be expected to have control over key decisions ensuring the long-term reliability, efficiency, and compliance of the heat network.
Lastly, it is important to note that HMOs that consist of a single house or building with shared facilities of kitchen or bathroom are exempt from the regulations because they are not considered to have separate homes in a single building. However, sheltered and supported housing providers are in scope.
Further information
- DESNZ’s heat networks collection, which includes information about regulation, policy, and support for heat network operators and suppliers.
- Ofgem’s heat network regulation information page, which features more information on the timeline for regulation as well as onward links to their guidance, consultations, publications, and support.
- The Heat Network, a best practice forum for social housing providers that own or operate heat networks. CIH provides in-kind support to The Heat Network and we have worked with them on policy development and consultation responses.
- The Heat Trust, which provides guidance and information for heat network consumers.
- Trowers and Hamlin’s guide to the scope of regulation and the authorisation regime. Their general heat network advice page is also very good, and their older page on what regulation means for social landlords.
- Winckworth Sherwood LLP’s guide to the outlines of regulation.
- Heat Trust: about heat networks and their consumers
- guide to heat networks.
