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Fifth-generation heat networks: better for customers and the environment


Fifth-generation heat networks, together with new Ofgem regulations, are creating a step-change in heat network functionality and efficiency – and making them a sound investment. Louise Manfredi, chief executive of Leep Utilities, explains


T


he announcement that Ofgem will regulate heat network providers is welcome news for customers, who until now haven’t had


statutory protection. Unlike gas and electricity, heat network customers can’t simply switch heat suppliers or contracts, and their costs are based on shared infrastructure that can’t be changed at an individual level. From 2026, heat providers will come in line with


the regulation of other energy sources. They’ll be required to deliver fair pricing and clearer billing, including notice of tariff changes, and ensuring they meet the technical standards for efficient and reliable services. Ofgem will also provide a formal dispute resolution service. For many providers, this change means a significant workload to bring systems and processes into alignment – which needs to be advanced now if providers want to be sure of meeting the 2026 deadline.


An unrivalled environmental opportunity


Heat networks are increasing in popularity and number, and it’s easy to see why. They are particularly ideal in dense urban areas, providing efficient, low-carbon heat, generated centrally from a range of different sources and distributed through a pipe network to nearby properties. With the UK on a firm path to Net Zero


greenhouse gas emissions by 2050, heat networks offer an unrivalled opportunity to reduce the carbon associated with heating homes and businesses. Today, approximately 3% of heating systems in the UK (approx. 18,000) are heat networks, and this proportion will need to increase to around 18% by 2050.


But as well as building new heat networks, many


existing networks will also need to be upgraded, to move them away from legacy third-generation technology. Designed in response to the oil crisis of the 1970s, these are mostly fuelled by highly unsustainable centralised gas boilers.


It’s time for a new generation


Heat networks go back as far as the 19th Century when excess heat from (coal-fired) Battersea power station created steam to heat local homes through concrete ducts. The irony of this location is not lost on us, as Leep has been a utility partner for the redevelopment of Battersea power station over the last few years.


14 October 2025


Left: Louise Manfredi, chief executive of Leep Utilities


from multiple and unconventional sources, such as sewage treatment processes, or waste heat from the ventilation shafts of the London Underground – both of which are already happening. Including heat rejected from cooling systems also helps to create a more balanced and efficient thermal energy network.


Instead of centralised


Every new generation of heat network since then has become increasingly efficient – operating at lower network temperatures, and integrating more fuel sources, including renewable power and energy from waste. But the recent focus on Net Zero has enabled us to now move on to a new, fifth generation of heat network.


Advantages of the fifth generation


The fifth generation represents a major evolution in heat networks. They support cooling as well as heating, and by operating at near-ambient temperatures (typically between 10–30ºC) it’s possible to integrate an even wider range of low- grade and waste heat sources. A single heat network can now recover energy


energy centres, fifth- generation systems enable networks and buildings to raise the ambient temperature, as required in that location, using individual heat


pumps. And it’s these same systems that operate in reverse to provide cooling, feeding surplus heat back into the network where it can be reused by others. It’s an exciting time to be involved in heat networks, and we are actively exploring a range of optimisation strategies and future potential across our own portfolio. Projects like Media City UK in Salford, where a centralised energy centre delivers heating, cooling and power to a 200-acre mixed-use development, show what is already possible, and what the fifth generation may look like. As heat networks continue to evolve, Leep is


focused on how its business can play an even greater role in supporting the UK’s journey toward Net Zero.


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