On 27th January, heat networks came under Ofgem regulation. In the same way that companies supplying gas and electricity networks must be regulated, now, so too must those with heat networks. Many businesses may be concerned about the how they will cope with the rules and procedures and whether they want to register with Ofgem as a heat network operator or supplier. There is, however, the option of selling heat networks, an idea introduced by heat network specialist, Power On.

What counts as a heat network? 

It may surprise some to discover that what counts as a heat network is anything with more than two properties sharing a heating system. So technically, a gas boiler serving three flats is a heat network and comes under Ofgem regulation.

Who needs to register?   

From now (January 2026) all heat network operators and suppliers will require authorisation from Ofgem to allow them to participate in the market. Existing heat networks will be automatically authorised but must still register with Ofgem. New networks (any that begin operating after January 2026) will need to apply for and receive authorisation before they can operate.

Authorisation will cover a broad set of obligations, which include standards of conduct, performance guarantees, pricing protections, proof of financial resilience and technical compliance under the Heat Networks Technical Assurance Scheme.

With just 12 months to ensure all of the above and more is adhered to, heat network owners may well be concerned about the time, knowledge, and cost that will need to be invested to meet the regulations.

Sell or succumb  

Rather than succumb to becoming a regulated heat network supplier and operator, some may wish to consider selling their heat network.

Alex Randall, Business Lead for Sustainable Heat at Power On, said: “Many developers, may decide they do not want to be an energy provider – they want to be a housebuilder. The same is true for housing associations, local authorities, care homes, student accommodation, buy-to-rent. Selling their heat network may well be their preferred option.”

Optimising the value of heat networks 

Those considering selling their heat network should take advice on how to optimise its value. Performing a health check is an important first step as there are grants available to upgrade poorly performing networks.

Power On is holding a webinar: ‘Preparing your heat network portfolio for sale’ on Tuesday 10th February at 10am for details and to secure a place visit:

https://www.poweron-uk.co.uk/news/preparing-your-heat-network-portfolio-for-sale/