Heat network zoning explained: what it could mean for a business building
Heat network zoning is a planned English system for designating areas where a heat network is the preferred low-carbon heat source; this guide separates what is law, what is government policy and what is still proposed, as last checked on 20 October 2026.
What heat network zoning is
Heat network zoning is a government policy, for England only, to identify areas where a heat network is likely to be the lowest-cost way to supply low-carbon heat, and then to organise the building of networks in those areas. The Energy Act 2023 gave the Secretary of State the powers to set up the system through regulations. GOV.UK describes a national zoning model that identifies opportunity areas using factors such as building type, size and existing energy use, and says it was tested and refined with pilots in 28 English towns and cities.
A heat network (district heating) supplies heat from a shared source to more than one building through insulated pipes. The ambient-loop explainer and the heat networks and ambient loops guide cover how the technology works. This page is about the rules that decide whether a network is built near you and whether your building might be asked to join it.
Zoning is separate from consumer regulation of heat networks, which is Ofgem’s job and is covered further down.
What has been decided and what is still proposed
The table separates the status of each element. Dates are those on the cited GOV.UK pages; this guide last checked them on 20 October 2026. Where a later regulation has been made since, the primary sources below will show it.
| Element | Status | Detail |
|---|---|---|
| Powers to create zones | In law | Energy Act 2023 (England). |
| National zoning model and 28-town pilots | Pilots complete; some areas being progressed as first zones | GOV.UK says some pilot areas are being progressed as first zones ahead of zoning legislation taking effect (webinar material dated 25 November 2025). |
| Government response to the 2023 consultation | Published 21 January 2026 | Sets out the intended design; it is a statement of policy, not the regulations themselves. |
| Zoning regulations | Proposed | The response said regulations were expected to be laid in spring 2026, subject to parliamentary time; by late July 2026 DESNZ was reported to be targeting a summer laying date, possibly after the summer recess, with the aim of the rules taking effect by the end of 2026, and this guide has found no confirmation that the regulations have been laid or made as at 20 October 2026. Check legislation.gov.uk before relying on any of this. |
| Charging for connection | Not yet possible | The response says the primary legislation needed has not been passed, and that few connection notices are expected until it is. |
| Carbon limit for zone networks | Proposed for 2030 | The response says that from 2030 zone heat networks and new connections to existing networks in zones must meet an emissions limit, reviewed every 5 years. |
If you read a headline saying that businesses “must connect to heat networks”, treat it with caution: on the published design, a connection requirement would apply only to some buildings, inside a designated zone, after a formal notice and with exemptions available.
Who runs a zone and who could be told to connect
Under the January 2026 response there are two layers. A heat network zoning authority coordinates the system across England; it starts inside the Department for Energy Security and Net Zero and moves to the Warm Homes Agency once that exists. Local delivery sits with zone coordination bodies (earlier documents called them zone coordinators), which collect data, define zone boundaries, consult, select a zone developer and enforce zone rules.
The response proposes that a zone coordination body could require the following to connect, but only if the zone developer asks and is confident it can connect the building in time:
- new buildings that receive planning permission after the zone is designated;
- existing communally heated domestic and non-domestic buildings;
- existing non-domestic buildings with an annual average heat demand above 100 megawatt-hours (MWh) and a wet heating system (buildings heated only by electric radiators are not in this group).
The proposed process gives a building a 12-month window to connect after a notice, with at least 6 months to agree the connection date. Owners could apply for conditional exemptions once a zone is designated, or a temporary exemption of up to 2 years after a notice. Existing buildings could keep their old heating system while connected. All of this is proposed design, not yet confirmed law, and you should check the regulations when they appear.
A building with 100 MWh of annual heat demand is a sizeable one. A small shop, office or workshop is unlikely to reach that, so the threshold mainly concerns larger sites. Check your own gas or oil consumption on your bills; this guide cannot tell you whether your site is above it.
Ofgem’s role as heat network regulator
Ofgem regulates heat networks across Great Britain, with a focus on customer outcomes. According to its own page, the rules cover customer service, reliability of supply, clear bills and fair pricing. All heat networks operating before the regime began were given “deemed authorisation”, and operators and suppliers of relevant networks must give Ofgem details of their organisation, ownership, finances and consumer-protection arrangements by 26 January 2027. Ofgem says regulation is being introduced in phases, and the main market-framework provisions took effect on 27 January 2026 (check the Ofgem page and legislation.gov.uk for the current phase); further rules, including pricing and guaranteed standards of performance, are due to follow.
Technical standards are a separate strand. The Government consulted on a Heat Network Technical Assurance Scheme (HNTAS) from 21 January to 15 April 2026, with a launch planned for 2027. That is a plan, not a rule in force.
Why this matters to a business: if you are a customer of a heat network, for example as a tenant in a building that is already on one, Ofgem’s rules are the ones that govern how you are billed and treated. Zoning decides where networks are built; Ofgem regulation governs how they are run. The two are linked, since the response indicates Ofgem will have a role in the pricing of zone heat networks. Check Ofgem’s heat networks page for the current position.
Owner-occupier or landlord: what changes
Owner-occupiers. If you own and occupy a building, the first question is whether it falls inside a proposed zone, and then whether it would meet the proposed criteria for a connection notice. If not, nothing is required of you, and a normal replacement such as an air-source heat pump remains a free choice. If it might, a network connection becomes a real alternative to compare on cost and risk, and the proposed exemption routes become relevant to plan around.
Landlords and tenants. The response refers to the building owner as the person who would receive a notice, so in a let building the obligation would sit with whoever holds the relevant interest, and lease terms on service charges and plant access need reading. If you are a tenant with a landlord-controlled boiler, ask the landlord whether they have heard from the council. This site does not cover landlord compliance questions such as EPC rules in detail.
Either way, a connection to a network usually replaces the central boiler plant but not the internal pipework, emitters and controls, which are your responsibility. Whether the internal system can run at network temperatures is a design question for an engineer, and low-temperature compatibility also determines whether the building could take a heat pump later; the electrical supply guide explains the other half, the power connection.
What to do now
- Ask your local authority. Find out whether it is a pilot area, whether a zone is proposed, and who the contact is. Search its website for “heat network” and “local area energy plan”.
- Work out your annual heat demand in kWh from 12 months of gas or oil bills, and compare it with 100,000 kWh (100 MWh).
- Do not strand a good decision. If your boiler is failing now, you cannot wait for a zone that may be years away; a heat pump or hybrid is a legitimate choice, and the proposals allow for exemptions. If it can wait, ask the council before committing capital.
- Keep options open in the design. Low flow-temperature emitters, space for plant, metering and a heat-pump-ready layout make either a network connection or your own heat pump easier later.
- Check funding status on the grants and funding page, which says what is open and closed, and use the cost guide to compare a heat pump against a network connection once you have a connection quote.
- Get your own quotes if you want a heat pump costed: send your details and we reply by email.
Decision checklist
- Is your building in England? (Zoning is an England policy; Ofgem regulation covers Great Britain.)
- Has the local authority published or consulted on a zone covering your postcode?
- Is your annual heat demand above or below 100 MWh, and is your system wet (water-based) or electric only?
- Are you owner, landlord or tenant, and who would receive a connection notice?
- When does your plant reach end of life, and can the replacement wait for the council’s answer?
- Could your emitters run at a lower flow temperature if needed?
- If a network is offered, what is the price basis, who is the operator, and is it registered with Ofgem?
None of this replaces legal or engineering advice. This guide publishes information from primary sources and does not give advice on your particular building.