The spring of 2026 has brought a cluster of significant policy developments for the district heating sector: The Future Homes Standard regulating energy infrastructure in England, funding expansion as the Green Heat Network Fund moves to finance projects in Wales, and a proposed heat network licensing shake-up in Scotland. Here’s a summary of what’s changed.
The Future Homes Standard
The Future Homes Standard (published in March 2026 and representing the government’s most significant update to Part L of the Building Regulations since 2013) requires all new homes in England to produce at least 75% less carbon emissions than those built to 2013 standards[1]. This, in turn, means that low-carbon systems like district heat networks will have renewed importance.
For the district heating sector, the Standard represents a marked shift. Buildings connected to district heating systems serving multiple buildings will need a verified declaration from the network operator that at least 90% of the energy delivered to the building came from low-carbon sources[2]. This is a clear and workable compliance route for new housing developments served by heat networks and it underlines the role district heating can play at scale in major residential projects.
The regulations come into force on 24 March 2027, with a 12-month transition period in place until 24 March 2028.
Green Heat Network Fund expands to include Wales
On 7 April 2026, the UK Government announced that the Green Heat Network Fund (which already supports heat network projects across England) is being expanded to include Wales. It’s a significant step in broadening the geographic reach of one of the sector’s main funding mechanisms.
The announcement confirms £195 million a year will be invested into heat network projects across England and Wales for the rest of the decade. This expansion of funding is also expected to support new employment across Wales, with opportunities in engineering, construction and related green skills.
The GHNF expansion brings it in line with the Heat Network Efficiency Scheme, which has already been open to Welsh applicants. For operators and developers with projects in Wales, the fund is now open for business.
Scotland consults on simplified licensing for heat network operators
North of the border, the Scottish Government has launched a consultation on plans to introduce a new, streamlined licensing regime for heat network operators. The proposals would create opt-in licences for installation and maintenance, giving operators statutory rights to access land and carry out roadworks; rights that gas and electricity providers have long held, but which heat network organisations have operated without[3].
The opt-in structure is seen as a sensible approach – proportionate to individual projects, and designed to fit around the UK-wide framework rather than duplicate it. For operators with plans in Scotland, the consultation is worth engaging with. You’ll find it here.
To further the implementation of Heat Networks north of the border, ThermaMech has joined the membership organisation Heat Networks Scotland. We look forward to collaborating with its other members.
What this all means
Taken together, these three developments reinforce a picture that has been building for some time: district heating is moving from the margins to the mainstream of UK energy policy. The Future Homes Standard gives heat networks a defined compliance route in new housing. The GHNF expansion signals sustained public investment on both sides of the English-Welsh border. And Scotland’s licensing consultation points toward a regulatory environment that will better support network growth.
As ever, the challenge now is translating policy intent into delivery, and that requires the right workforce, the right supply chains, and projects that can move at pace once these frameworks are in place.
[1] https://home-energy-model.co.uk/future-homes-standard/
[2] https://www.pinsentmasons.com/out-law/news/future-homes-and-buildings-standards-set-in-england
[3] https://www.pinsentmasons.com/out-law/news/scotland-heat-network-licencing-regime-streamlined
