Heat zoning: from compliance to competitive advantage. How Ofgem's new regulation will redefine the future of England district heating

With the UK Government accelerating local heat zoning and Ofgem taking over regulation from January 2026, the sector faces a decisive moment for both policy and investment. In less than 90 days, Ofgem's new licensing regime for heat networks will come into force. For many operators, 27 January 2026 will mark not just a regulatory milestone, but the beginning of a fundamentally new business model for district heating in England.

Under the Energy Act 2023, the government and local authorities will designate heat network zones - areas where district heating represents the most efficient route to decarbonisation. This approach, known as heat zoning, replaces fragmented, project-by-project investment with coherent, system-level energy planning.

"Heat zoning is not merely a regulatory exercise - it's an opportunity to rebuild confidence in the sector through data, transparency and long-term performance. The operators who act now will lead the market not because they have to, but because they're ready to," says Jarosław Żuchowski, CEO, Radpol Pipes Ltd.

The Heat Network Zoning Playbook serves as a guide for operators and investors across the UK heat-network sector. It summarises key regulatory milestones under Ofgem, the emerging zoning framework, and best-practice approaches to network planning, ESG integration and funding under the GHNF and HNES schemes.

The Playbook highlights three priority areas that will define the transition period for both operators and local authorities.

Data and modelling
The first pillar of successful heat zoning is understanding the data. Operators need detailed GIS-based heat maps showing demand density, building stock and connection potential across each area. Such analysis forms the backbone of investment decisions - identifying where district heating is technically and economically viable, and where alternative solutions, such as local heat pumps, are more appropriate. Accurate modelling of demand and supply is also key to planning network flexibility and real-time energy management.

Technology and ESG
The second focus area is technology and the integration of ESG principles throughout the asset life cycle. Ofgem expects future networks to be not only efficient but also transparent in terms of emissions, energy performance and material provenance. In practice, this means investing in systems with low thermal conductivity and high durability - for example, modern diffusion-barrier solutions - and embracing circular materials. Quantifiable data - reduced heat losses, lower CO2 emissions, recycled content - will become the new language of performance and accountability.

Finance and regulation
The third priority concerns financial structures and regulatory alignment. Public funding programmes such as the Green Heat Network Fund (GHNF) and the Heat Network Efficiency Scheme (HNES) will favour projects that demonstrate zoning compliance, robust ESG frameworks and verifiable energy savings. At the same time, Ofgem requires operators to provide transparent tariff methodologies and clear evidence of licence compliance. For many, this represents an opportunity to combine public and private capital to build resilient, regulation-proof business models.

The conclusion is clear: regulation is only the starting point. Operators who combine technical performance with credible ESG metrics will secure better access to finance, greater investor confidence and more stable long-term growth.

The coming months will determine who leads in this new, regulated environment - and who merely follows the rules.

The full Heat Network Zoning Playbook is available here: https://bit.ly/4qAvf5a

The Playbook positions heat zoning not as a regulatory burden, but as a blueprint for a smarter, fairer and more investable heat network market in the UK.

Radpol Pipes sp. z o.o.
Kolonia Prawiedniki 57
20-515 Lublin (Poland)
tel. +48 81 750 01 70,
fax. +48 59 834 25 51

Media contact:
Dariusz Chrzanowski
Marketing & Communications Manager
+48 507 074 449
dchrzanowski@radpolpipes.eu

Radpol Pipes is an innovative manufacturer and supplier of technologically advanced district heating and cooling systems, as well as plastic pipes for water, sewage, and gas installations, along with tailored solutions for other industrial sectors.

This release was published on openPR.