Ofgem has opened a consultation on how it will recover the costs of regulating heat networks, a growing part of the UK's low‑carbon infrastructure pipeline spanning new housing, mixed‑use and regeneration schemes across the country.

Under proposals published on 17 February 2026, Ofgem's regulatory costs would initially be recovered via licence fees paid by certain gas and electricity licensees. At a later stage, fees would apply to both gas and electricity licensees and heat network authorised persons. Government confirmed this overarching "blended" approach in 2022, following a 2021 consultation.

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The paper sets out detailed policy proposals to implement that decision, covering: the mechanics of the blended model across heat network authorised persons and gas and electricity licensees; a de minimis threshold; the method for apportioning fees; who ultimately pays; and how frequently payments are collected. Ofgem says the design aims to streamline administration and reduce burden while ensuring a fair and proportionate outcome.

The consultation is directed at organisations across the heat network value chain, including heat network operators and suppliers, energy services companies, housing providers, consumer groups, asset owners, metering and billing agents, and trade associations. It is also relevant to gas and electricity network companies and supply licensees, underlining the cross‑sector implications for project finance, operations and long‑term asset stewardship.

Responses can be submitted via Ofgem's Citizen Space portal by Thursday 2 April 2026. Queries and written submissions can be emailed to [email protected] by the same deadline.