Guidance

Heat network zoning – charging powers

Published 4 November 2026

Factsheet relating to the Energy Independence Bill.

Summary

This measure allows the government to introduce capped connection charges for buildings in heat network zones which have been required to connect to a heat network. This will be set at £0 for residential buildings and a suitable counterfactual for commercial buildings. It also allows heat network zoning requirements to apply to the Crown. This measure will increase the deployment of low carbon heat networks across England to strengthen energy security and protect families and businesses from fossil fuel shocks.

Why are we legislating?

When heat network zoning launches later this year, building owners will not be required to contribute to the cost of connection when required to connect. The government intends to introduce limited capped connection charges as the sector matures and the cost of low-carbon heating falls.

However, the Energy Act 2023 does not currently allow this. The inability to introduce capped connection charges would make it more difficult for heat network developers to recover upfront infrastructure costs and slow the delivery of heat networks in zones. This will delay the benefits for consumers and for our energy security that more low carbon heat network can bring.

Additionally, heat network zoning requirements do not apply to the Crown. This would mean some important Crown buildings or low-cost heat sources could be excluded from zone requirements, which would also slow delivery.

The government response to the 2023 heat network zoning consultation^{[footnote 1]} confirmed that these 2 omissions would be addressed in primary legislation. This measure will amend the Energy Act 2023 to allow regulations enabling capped connection charges and extending heat network zoning requirements to the Crown.

What are the government’s objectives with this measure?

The government’s objective is to increase the deployment of low carbon heat networks to support the transition away from volatile fossil fuels, strengthening energy security and accelerating the electrification of the economy. Building heat networks in the right places will save consumers on their bills compared to other low-carbon technologies. The introduction of cost caps will protect families and businesses from excessive upfront costs, by ensuring that any future connection costs can be no higher than the building’s alternative heating technology.

This measure supports the Warm Homes Plan ambition for heat networks to supply 7% of UK heat by 2035 and up to a fifth by 2050. Expanding heat networks will enable lower-cost heat for consumers, reduce the costs of upgrading the electricity system and support economic growth through investment in infrastructure and development of the heat network supply chain across England.

How will this measure deliver the objectives?

This measure gives government new powers to set rules in secondary legislation about when and how connection costs can be recovered from buildings through a charge.

Strong consumer protections will be implemented through cost caps. The government intends to set the cap at £0 for pre-existing residential buildings that are required to connect. This ensures homes will not be faced with unaffordable costs if their building has been required to connect to a heat network. For non-domestic buildings, connection charges will be capped so they are no higher than the building’s alternative heating technology, and subject to consultation before they are introduced.

Allowing heat network developers to charge a capped connection fee where buildings are required to connect will allow the recovery of some upfront infrastructure costs while protecting families and businesses from excessive costs. This, alongside extending heat network zoning to the Crown, will reduce financial risks, especially in the important early stages of network development. These changes will unlock billions of pounds of investment, accelerating the deployment of heat networks across England. This will ensure homes and business can access the benefits of heat networks more quickly.

1. DESNZ (2026) ‘Proposals for heat network zoning 2023: government response’ ↩