The previously unregulated industry involves firms heating multiple buildings from a central heating source, such as taking excess heat generated from a data centre or factory to connected properties through pipes.
Under the new rules, Ofgem will have powers to act if a heat network operator puts up prices unfairly or delivers poor service, with compensation available to customers who suffer an outage.
Homes and businesses on heat networks will also see clearer, itemised billing and there will be greater support for vulnerable customers, the Department for Energy Security and Net Zero (DESNZ) said.
Some heat network customers have seen energy price rises of up to 450% following the increase in gas prices.
Matt Cole, CEO of Fuel Bank Foundation, said: “This is a very welcome and long-overdue step forward for the hundreds of thousands of households using heat networks. For too long, customers have been left without the basic protections that other energy customers rightly expect, often facing sharp price rises and little recourse when things go wrong.
“Fuel Bank Foundation has consistently called for stronger regulation of heat networks, particularly clearer pricing, fair treatment and better support for vulnerable customers. Bringing the sector under Ofgem’s oversight is an important move that begins to level the playing field and puts consumers first.
