Heat network zoning explained for building owners

If you look after an office, a hotel, a university building or a hospital in an English city, you may have heard the phrase "heat network zoning" in the last year or so. It sounds technical and slightly ominous, and the official documents don't help much. This guide explains what it is, who it affects and, just as importantly, what hasn't happened yet.

What a heat network is

A heat network, also called district heating, is a system of insulated pipes that carries hot water from a central source to lots of buildings. Each building takes the heat it needs through a heat exchanger, usually called a heat interface unit or substation, instead of running its own boilers.

The heat can come from almost anywhere: large heat pumps drawing on rivers or sewers, waste heat from data centres or industry, energy-from-waste plants, old mine workings, or gas combined heat and power on older schemes. The point is that one big, efficient source can serve many buildings, and the source can be swapped for a cleaner one later without touching each building.

Heat networks supply about 3% of UK heat demand[source] today. The government wants that to grow to 7% of England's heat (27 TWh) by 2035[source], and expects networks to provide about a fifth of all heat by 2050[source].

What zoning means

In most of England today, connecting to a heat network is voluntary. Developers build a network and then persuade building owners to join. That makes networks slow and expensive to build, because the developer can't be sure who will connect.

Zoning changes this. The Energy Act 2023, Part 8, Chapter 2 (sections 226 to 237)[source] gave the government powers to designate heat network zones: areas where a heat network is expected to be the lowest-cost way to decarbonise heat. Inside a zone, a single zone developer gets the exclusive right to build the network, and certain buildings can be required to connect to it.

The idea is borrowed from Denmark and parts of the Netherlands, where zoning helped district heating become the normal way to heat city buildings. Zoning applies in England only. Scotland and Wales are covered at the end of this guide.

Which buildings will be covered

The government set out its policy in its response to consultation, published 21 January 2026[source]. It proposes three categories of building that can be required to connect inside a designated zone:

1. New buildings: new buildings that receive planning permission after the zone is designated[source].
2. Communal heating: existing buildings with communal heating, both domestic and non-domestic[source].
3. Large non-domestic buildings: existing non-domestic buildings with a wet heating system and average heat demand above 100 MWh a year[source].

That third category is where most commercial building owners will land. A "wet" system means heat is moved around the building by hot water, through radiators, underfloor heating or coils in air handling units. A building heated only by electric panels or air-to-air units wouldn't qualify on that measure.

Two groups sit outside the requirement. Existing individually heated homes are not required to connect[source], and Crown buildings are not covered: zoning law does not apply to bodies with Crown status[source]. The government also plans to bring in buildings that house a campus energy centre, such as a university or hospital boiler house serving several buildings.

Who's who

Zoning introduces some new organisations. You'll hear these names a lot.

• The Heat Network Zoning Authority is the national body that oversees the whole system. Sits within DESNZ at first, then moves to the Warm Homes Agency once that is set up[source].
• Zone coordination bodies run zoning locally. In practice this will usually be your city council or combined authority. Set up by local government; the zoning authority can step in if councils cannot agree within 28 days[source].
• Zone developers build and run the network in a zone. They are appointed through competition, with exclusive rights to develop a heat network in the zone delivery area[source].

If your building is in a zone, the zone developer is the organisation you'll negotiate with about price, timing and technical details. The coordination body is the one that sends the formal notice and deals with exemption applications.

What happens if you get a connection notice

Once a zone exists and the developer wants to serve your building, it asks the coordination body to send you a connection notice. The zone coordination body issues the notice within 2 weeks of the zone developer's request[source].

From that point the process runs like this:

In plain terms, you have half a year to either sign up to a connection date or make a case for a temporary exemption. The actual connection then has to happen within a window that's at least a year long, giving you time to plan works around your building's operations.

If you have good reasons not to connect, there are exemptions. They include existing low-carbon heating with plenty of life left, lease terms that stop you, building safety works, physical or technical barriers and conservation constraints. Temporary exemptions can last up to 2 years from the end of the proposed connection window[source]. Our guide to exemptions and deferrals goes through each one.

What if you ignore it

The government proposes real penalties for not complying: up to £1 million or 10% of annual turnover, whichever is higher ○Pending[source]. That figure is designed to bite for large organisations. It isn't law yet, but it tells you how seriously the requirement is meant to be taken.

More practically, ignoring a notice wastes your six months. The agreement phase is your chance to negotiate the connection date, understand the charges and check the technical design. Owners who engage early will have far more say over how and when connection happens.

Where things stand now

Here's the honest position as of our last check.

A lot of groundwork has been done. The government ran a Heat Network Zoning Pilot covering 28 towns and cities in England[source]. In October 2024 it named the first places to develop zones: Leeds, Plymouth, Bristol, Stockport, Sheffield and two schemes in London, including Old Oak and Park Royal[source]. In 2026 local authorities were invited to put forward more areas, and the Warm Homes Plan was published 21 January 2026, including £1bn for heat networks this Parliament[source].

So nobody has received a statutory connection notice yet, and nobody can until the regulations are in force and zones are formally designated. If someone tells you that you must connect today under zoning law, ask them to show you the designation.

Why it's worth paying attention now

If zoning isn't in force, why bother? Three reasons.

First, plant replacement cycles are long. If your boilers are due for replacement in the next few years, the decision you make now could affect your position later. Installing new low-carbon plant could support an exemption. Installing like-for-like gas boilers might leave you with stranded kit if a connection notice arrives.

Second, your heat demand figure matters a great deal. Whether you're over or under 100 MWh a year decides whether you're covered at all. It's much better to have your own reliable figure than to rely on a benchmark someone else applies. Our 100 MWh guide explains how to work it out.

Third, early zones are already moving. In places like Plymouth, Westminster and Old Oak, delivery partners are appointed and networks are being planned. If you're in one of those areas, conversations with the developer may start well before any statutory notice.

Connecting isn't necessarily bad news

It's easy to see zoning purely as a compliance burden. For many buildings, though, connection will be a reasonable deal. You hand over the job of generating heat, you avoid replacing boilers or installing heat pumps yourself, and you free up plant room space. Heat networks are also regulated now. Ofgem became the regulator on 27 January 2026 ●In force[source]. The consumer advocate is Citizens Advice, for heat network consumers in England and Wales[source], and the Energy Ombudsman accepts heat network disputes, usually after 8 weeks with the supplier[source].

Whether it's a good deal for your building depends on the price, the connection costs and what you'd otherwise spend. We compare the options honestly in heat network vs your own heat pump, and explain charges in what connection costs and who pays.

Scotland and Wales

This guide covers England only. Scotland has a separate regime under the Heat Networks (Scotland) Act 2021[source]. Wales has no zoning regime; the Welsh Government is assessing whether zoning powers are needed[source].