Policy · Ofgem Authorisation

Ofgem authorisation conditions for heat networks — explained

Ofgem's authorisation conditions are the rules every regulated heat network operator and supplier must meet. They cover consumer protection, financial resilience, billing, complaints and reporting. Here is what each requires in practice.

What the conditions are

When Ofgem assumed regulatory responsibility in January 2026, it published authorisation conditions — the specific obligations that operators and suppliers must meet as a condition of being permitted to continue operating. They apply now, not only at registration. Whether you are an operator, supplier, or both determines which conditions apply to you.

Consumer protection conditions

These are the most immediately enforceable. Suppliers must:

  • Provide accurate, timely bills based on metered usage where metering exists
  • Run a complaints process meeting Ofgem standards, with Energy Ombudsman access after 8 weeks
  • Identify vulnerable customers and have a documented protection policy
  • Give residents clear information about their supply, pricing and rights
  • Ensure pricing is transparent and — once the fair pricing framework is in force — demonstrably fair

Financial resilience conditions

Operators and suppliers must demonstrate they have sufficient resilience to maintain supply. At registration this means evidencing adequate reserves or funding, supply continuity contingencies, and documenting your financial position in a format Ofgem can assess. This is the most commonly underprepared area.

Billing and metering conditions

  • Bills must show consumption data where individual metering is installed
  • Where metering is absent, cost allocation basis must be transparent
  • Standing charges, unit rates and all other charges must be itemised and justifiable
  • Estimated bills must be reconciled with actual readings within a reasonable period

Complaints handling conditions

  • Complaints policy clearly communicated to residents
  • Complaints acknowledged promptly and resolved within defined timescales
  • Energy Ombudsman access for complaints unresolved after 8 weeks
  • Complaints data recorded and available for Ofgem reporting

Reporting conditions

Operators and suppliers will report performance data to Ofgem from Spring 2026, with data backdated to April 2026. Establish what data you are capturing now.

These conditions apply now Ofgem's conditions have been in force since 27 January 2026. Ofgem has committed to pragmatic early enforcement, but the obligations are live.
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Frequently asked questions

Do the conditions apply immediately?

Yes. They came into force 27 January 2026. Ofgem has stated it will be pragmatic in early enforcement, but the conditions are legally in effect now.

What happens if I breach an authorisation condition?

Ofgem can issue enforcement notices, require remediation, impose financial penalties, or ultimately withdraw authorisation. Consumer protection failures may also be escalated via the Energy Ombudsman.

Are the conditions different for operators and suppliers?

Yes. Operators are primarily responsible for network reliability and metering. Suppliers are responsible for billing, consumer protection and complaints. Many entities are both and must meet all conditions for each role.

Where can I read the full conditions?

The full text is on the Ofgem website. This page explains what they require in practice.