Energy Act 2023 gives the government powers to create heat network zones

The Energy Act 2023 became law on 26 October 2023. It is a long Act covering everything from carbon capture to energy security, but one small group of sections matters a great deal for building owners in English towns and cities. The heat network zoning powers sit in Energy Act 2023, Part 8, Chapter 2 (sections 226 to 237)[source].

What the Act does

In plain terms, the Act gives the government the legal power to create heat network zones. These are areas where a heat network, also called district heating, is expected to be the cheapest low-carbon way to heat buildings. Inside a zone, the plan is that one organisation gets the right to build the network, and certain buildings can be required to connect to it.

The zoning powers apply to England only[source]. Scotland already has a separate regime under the Heat Networks (Scotland) Act 2021[source], which includes its own approach to zoning. Wales is not covered by the English powers.

What the Act doesn't do yet

The Act is a framework. It says zones can exist and sets out the broad shape of how they will work, but almost all the detail is left to regulations that ministers will make later. Those regulations will settle which buildings must connect, what thresholds apply, how exemptions work and what penalties look like. None of that is decided by the Act itself.

The government has already done groundwork. Its Heat Network Zoning Pilot has worked with 28 towns and cities in England[source] to test how zones might be identified. Being on that list does not mean a zone exists there.

What it means for building owners

Nothing changes on the day. No building has to connect to anything because of this Act alone, and no zones exist. But the direction is now set in law. If you look after a large office, hotel, hospital or university building in an English city, it is worth knowing that zoning is coming, and keeping an eye on the consultation and regulations that follow.

Looking back from November 2026, the zoning regulations are not yet laid before Parliament[source], and no zones have been designated. Our zoning explainer has the current position.