Target Operating Model for Heat Networks Regulation

The UK Government is legislating to introduce statutory regulation for the heat networks market and the Energy Act 2023 has now been passed that appoints Ofgem as regulator for the heat network sector in Great Britain. Separately, the Scottish Government has established project teams to deliver the Scottish Government's policy position on a Scottish Heat Networks Licensing Regime, which will also be administered by Ofgem.

All heat networks will be required to provide notification to Ofgem to be authorised, this means that all domestic consumers and micro-businesses will be protected by the regulatory regime, including consumer protections on pricing, transparency, and quality of service. Heat Networks will also need to meet minimum technical standards and decarbonisation rules under the authorisation regime.

Support is required from a supplier to provide specialist support and advice in respect of establishing the foundations of operational readiness for regulating Heat Networks in the UK in terms of:

• Segmentation.
• Process identification and design.
• Team structure.
• Broader team placement for Ofgem.

Additionally, the supplier will design the target operating model (TOM) with a view to being able to flex to unpredictable resource need and how the work will transition from the initial period and on to BAU delivery of the regulatory framework.