What will zoning mean for campus networks?

The advent of heat network zoning will represent a fundamental shift in how district heating is regulated in England. For organisations that own and operate campus heat networks-universities, NHS trusts, business parks, and similar multi-building estates, these regulations introduce a consent-based regime that will, for the first time, bring campus networks within the scope of formal regulatory oversight. The regulations create new obligations around consent, interconnection, and ongoing compliance, backed by a robust enforcement framework with significant financial penalties. Owners who act early will be best positioned to navigate the transition smoothly.

What are heat network zones?

The Energy Act 2023 gave the Secretary of State power to designate “heat network zones” – defined geographic areas in which the development and operation of district heat networks is actively managed.

The Government response to the Heat Network Zoning consultation, released in January 2026, set out the direction of travel in relation to zoning, with the detail to be further set out in zoning regulations, expected to be made law by the end of 2026.  The regulations will set out the mechanics of how zones will work in practice. 

Once a zone is designated, a zone coordinator (typically likely to be established by one or more local authority or combined authority) oversees network development, and no person may construct, operate, or maintain a district heat network within the zone without the zone coordinator’s consent.

Where do campus networks fit?

It is expected that the regulations carve out a specific category for “campus networks”, a campus network being a district heat network where the network owner also owns (or is a related undertaking of the owner of) the buildings receiving at least 80 percent of the heat supplied. This definition captures the typical university, hospital, or business park estate model, where a single organisation generates and distributes heat across its own portfolio of buildings. Critically, campus networks will not be exempt from the regime. They will benefit from a simplified consent pathway and are excluded from the competitive tender process that applies to commercial zone developers, but they must still obtain consent, satisfy eligibility conditions, and comply with ongoing obligations.

The consent requirement and eligibility conditions

Operating a district heat network in a registered heat network zone without consent will be prohibited. To obtain consent, a campus network must:

• be a district heat network under section 216 of the Energy Act 2023 (i.e. it must supply heating, cooling or hot water to two or more separate buildings);
• be owned by a network owner who satisfies the 80 percent building ownership threshold; and
• be capable of being connected to another heat network in the zone. This last condition, interconnection capability, is an important policy signal and is discussed further below.

Ongoing compliance

Consent to operate your campus network will not unconditional. It will be subject to standard conditions published by the Heat Network Zoning Authority and any additional conditions the zone coordinator considers appropriate. Each building permitted to connect will need to be specifically identified. The Heat Network Zoning Authority will retain the power to review consent conditions at any time, creating an evolving compliance landscape that owners will need to monitor actively.

Enforcement and penalty framework

The enforcement regime is graduated but carries real teeth. Non-compliance with consent conditions can trigger a compliance investigation notice, followed by a formal compliance notice. If the breach is not remedied, the zone coordinator may impose variable monetary penalties of up to £1 million or 10 percent of annual turnover, whichever is greater. Beyond financial penalties, persistent non-compliance can lead to delivery failure notices and ultimately the revocation of consent.

Interconnection obligations

The requirement that a campus network must be “capable of being connected” to a heat network in the zone delivery area is a key provision. Campus networks have traditionally operated as self-contained systems. This policy signals that campus networks will be required to integrate with wider zone infrastructure, which will ultimately become the primary source of heat for the buildings which are connected to the campus network. Owners should begin to consider the technical and commercial implications of this requirement now.

Grant of consent to pre-existing campus networks

It is expected that operators already running a campus network when a zone is being designated will be contacted by the zone coordinator in the run-up to registration of the zone to identify the extent of the campus network and the area to which the operator’s consent will relate. That consent will incorporate relevant standard conditions with which the operator must comply.  Generally speaking, it will not be possible to extend a campus network or take on new customers.

The coming into force of the regulations will require campus network owners to engage with the regulatory framework well before a zone is designated in their area. The practical implications are significant: owners will need to assess whether their network meets the 80 percent ownership threshold, review the technical feasibility of interconnection with wider zone infrastructure, and establish internal governance processes for ongoing compliance with consent conditions.

Practical steps

It will be important to take the following steps:

• Audit your network’s structure against the campus network definition, including ownership of connected buildings and the 80 percent threshold.
• Assess interconnection readiness: review existing infrastructure to determine what modifications may be needed to enable connection to a wider zone network.
• Map your compliance exposure: identify which standard conditions are likely to apply and build internal processes to meet them.
• Engage with your local authority to understand the timeline for zone designation in your area.
• Review contractual arrangements with any third-party heat suppliers or building tenants that could be affected by the new regime.

Early preparation will be critical, particularly for large estates with complex infrastructure and multiple stakeholders.

The emerging regulatory picture is still taking shape, but campus network owners should engage with regulatory change now. Mapping likely obligations onto current network operations will expose practical gaps early and protect operational flexibility.

Campus network owners should engage proactively with the emerging regulatory framework.  Early action will help secure the appropriate consent pathway, manage interconnection and compliance risk, and protect operational flexibility as the regulatory picture continues to emerge.

As part of our Clean Heat Hub series, we are supporting clients across the lifecycle of heat network projects, from structuring delivery models through to regulatory readiness and implementation.

If you own or manage a campus network and are planning the next steps needed to assess how heat network zoning may impact you, we can support with regulatory advice and transition planning. Please get in touch with Emma Andrews or Charles Robson if you would like more information.