UK Construction and Law

The heat networks minister says a failing scheme needs a better network, not gas boilers, as a regulated asset base is assessed

By Staff Writer  |  24 October 2026

Martin McCluskey told the heat network industry that ministers are weighing a regulated asset base model for the sector and will say more on minimum technical standards in the coming months. He restated a target of 7 per cent of England's heat demand within ten years.

The Minister for Local Energy and Jobs was speaking at the ADE Heat Network Conference. The Department for Energy Security and Net Zero published the text on 23 October 2026. He said the government wants heat networks to meet 7 per cent of heat demand in England over the next ten years, double the current level, and a fifth of all heat in England by 2050.

Money spent and money still to find

Across four Green Heat Network Fund announcements in the past twelve months, the government has confirmed allocations of more than 200 million pounds to twenty low carbon heat network projects. The minister named town centre schemes in Sunderland, Stockport, Oldham and Milton Keynes, and heat carried by barge along the River Thames that could lead to a larger scheme in central London. Seaham Garden Village in County Durham and Lancaster University have begun supplying heat this year, with West King Street in Hammersmith among those to follow. The fund has also been opened to projects in Wales.

Under the Heat Network Efficiency Scheme, almost 35 million pounds of capital funding has gone to 65 projects serving more than 10,000 residents on existing networks. The minister said the cost of low carbon heat remains a barrier to growth, that ministers are working with the National Wealth Fund on further support, and that a range of options to bring down the cost of financing heat infrastructure is being assessed, including a regulated asset base model.

Standards for networks that perform badly

Regulation began at the start of this year, with Ofgem as regulator and about half a million heat network customers given protections for the first time. Customers who suffer an outage can now go to the Energy Ombudsman. The minister described one case in which a supplier had to correct bills after applying an inflated tariff to recover past losses.

He accepted that many networks, some of them new, lose too much heat or were designed, built, operated or maintained badly. The government consulted on mandatory minimum technical standards earlier this year and will say more in the coming months, with a scheme he wants to be proportionate, affordable and deliverable.

The answer to me for a poorly performing heat network is a better performing heat network.

Martin McCluskey MP, Minister for Local Energy and Jobs

On zoning, he said at least ten of the largest English towns and cities will receive government support to set up heat network zones soon after the Heat Network Zoning Regulations come into force, and that areas in the Advanced Zoning Programme have completed their developer procurements.

Designers and contractors building networks now are working ahead of technical standards that have still to be fixed.

Until those standards are settled, the specification and the performance guarantees in each network contract carry the weight that regulation does not yet carry.