Renewable and low carbon energy

Heat networks

Heat networks supply heat to homes and other buildings from a central source, avoiding the need for individual gas boilers. 

Heat networks will play an important role in achieving our climate change targets. They do this by offering an efficient and environmentally friendly way to heat homes and businesses. They can also lead to fuel savings, helping to reduce fuel poverty. 

Just under 2% of Scotland’s heat is supplied from heat networks.

Our heat networks delivery plan (March 2022) sets out what we are doing to expand the development of heat networks. This includes funding new projects and introducing rules to regulate the sector. We will review the plan every two years when we will update on progress against our targets. We published the first HNDP review report  in March 2024.

Funding for heat network projects 

Scotland’s Heat Network Fund (SHNF), launched in February 2022, provides capital grant funding to public and private sector organisations.

This funding supports the:

• rollout of new zero-emission heat networks and communal heating systems
• expansion and decarbonisation of existing heat networks across Scotland

We publish biannual progress reports. These detail the projects funded through Scotland’s Heat Network Fund. They also provide information about other current and closed Scottish Government schemes which provide capital and pre-capital support for the development of heat networks in Scotland.

For enquiries email heatnetworkfund@gov.scot

Heat Network Support Unit (HNSU)

The Heat Network Support Unit (HNSU) is sponsored by the Scottish Government and delivered in partnership with Scottish Futures Trust (SFT) and Zero Waste Scotland (ZWS).

The HNSU supports the development of heat network projects in Scotland by offering grant funding and expert advice throughout the pre-capital stages of development. We are working on building a pipeline of deliverable heat network projects to meet our targets and bring to market strategic projects of scale that will gain private investment. Read more about the Heat Network Support Unit, including information on funding.

For any queries about potential heat network projects and pre-capital support email heatnetworksupport@gov.scot.

Heat networks regulation 

The regulation of heat networks is devolved to the Scottish Parliament. The Heat Networks (Scotland) Act 2021 introduced powers to regulate the heat networks market in Scotland for the first time.

Other issues such as the regulation of consumer protection – including for pricing, transparency, and quality of service - are reserved, with the UK Parliament retaining the power to make these laws. Existing UK regulations require eligible heat network operators to take a number of actions. These regulations include:

• Heat Network Metering and Billing Regulations
• Energy Bills Discount Scheme Pass-through Requirement (Heat Suppliers) Regulations

The Energy Act 2023 was passed by the UK Parliament in October 2023. We continue to work with the UK Government and Ofgem during the development of regulations under the Energy Act 2023 on new consumer protections and technical standards they will provide.

The phase in of consumer protection and authorisation regulations applying across Great Britain has already begun, as follows:

• advice and advocacy services started for consumers in April 2025. In Scotland, Consumer Scotland, Advice Direct Scotland, and Citizen’s Advice Extra Help Unit will advocate for Scottish consumers and escalate key issues. For Scottish consumers looking for advice, they can use the webchat function at energyadvice.scot, or call 0808 196 8660. The Energy Ombudsman will also provide an independent escalation route for consumer complaints. Read more information on the Energy Ombudsman’s website.
• on 27 January 2026, Ofgem’s formal role as regulator of heat networks began, with the initial set of rules in place. Existing heat network operators and suppliers have been given a ‘deemed authorisation’ and have until 26 January 2027 to register with Ofgem. After this date all new heat networks must apply to Ofgem to receive authorisation.
• Ofgem will collect data through the registration process to inform their work to develop pricing benchmarks and implement Guaranteed Standards of Performance
• over time, these new protections will give consumers greater confidence in heat networks as they will have a more consistent standard of service across the sector. Importantly, they will have a clear route to hold operators and suppliers accountable if their heat network fails to meet these expectations.

The authorisation regime mentioned above will apply across GB with Ofgem acting as the authorisation’s regulator. Read more information on the authorisations regime on Ofgem’s website.

Heat network targets

Our heat network targets are set out in the Heat Networks (Scotland) Act 2021. This requires us to ensure the following amounts of thermal energy are supplied through heat networks:

• 2.6 terawatt hours of output by 2027
• 6 terawatt hours of output by 2030

• 7 terawatt hours of output by 2035

These figures equate to approximately 3%, 8% and 9% of current non-electrical heat consumption respectively.

We have also consulted on a potential heat network target for 2035, based on evidence including the First national assessment of potential heat network zones. We published an analysis of responses received and our response in July 2023.

Next steps 

We continue to work with UK Government and Ofgem to make the GB wide and Scottish regulatory regimes for heat networks interoperable as well as aiming to minimise duplication where possible.

Bills and legislation 

The Heat Networks (Scotland) Act 2021 is accompanied by the following impact assessments: 

• equality impact assessment 
• fairer Scotland duty assessment 
• island communities impact assessment 
• business and regulatory impact assessment 
• children’s rights and wellbeing impact assessment 

The act will be supplemented by secondary legislation, including: 

• The Heat Networks (Heat Network Zones and Building Assessment Reports) (Scotland) Regulations 2023 

Related strategies and consultations

We published the draft Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill (November 2025) to:

• help provide clarity to industry and stakeholders
• support the decarbonisation of heat in buildings (moving away from fossil fuel heating like gas boilers)
• propose the creation of an opt in licensing regime enabling heat network developers in Scotland to access the rights and powers for things like road works, survey and compulsory purchase
• propose that certain buildings, within a designated heat network zone, cease their use of polluting heating systems and adopt a decarbonised heat solution. This will also provide some assurance of the demand for heat from heat networks, supporting their development.