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Heat networks in Scotland: what the 2021 Act changes for buildings and developers

Published 2026-11-05

When the innovation centre's partners talked about low-carbon housing, the conversation usually turned to the individual home: its fabric, its heat pump, its controls. In dense parts of Scottish towns and cities, the more efficient answer is often shared: one energy centre heating many buildings through insulated pipes under the street. The Heat Networks (Scotland) Act 2021 is the law that tries to make that happen at scale. It was passed by the Scottish Parliament on 23 February 2021 and received Royal Assent on 30 March 2021. This article explains what it contains, using the text on legislation.gov.uk as checked in November 2026.

What counts as a heat network

The Act covers two kinds of system. A district heat network carries heat from one or more sources to more than one building, for example a hospital, a school and a block of flats on the same pipe. A communal heating system serves several homes or units inside a single building from a shared plant room. Both distribute hot water (or, less often, cooling) rather than fuel, which matters for the New Build Heat Standard: a connection to a heat network is treated as clean heating for a new building, whatever fuel the energy centre uses.

Legal targets for heat supplied

Part 8 of the Act puts numbers into law. Section 92 requires Scottish Ministers to ensure that the combined supply of thermal energy by heat networks in Scotland reaches:

Ministers must also publish a heat networks delivery plan setting out how the targets will be met. The targets are about delivered heat, not the number of networks, so they reward large schemes that connect many existing buildings as much as new developments.

The regulatory toolbox

The rest of the Act builds a framework of permissions. Read together, its parts answer four questions: who may run a network, where it may be built, who gets the right to serve an area, and which buildings should connect.

Licences: who may operate

Part 1 requires a heat networks licence to supply heat through a network, with standard and special conditions, modification, revocation and appeal. Enforcement provisions in Part 8 of the UK Energy Act 2023 have since been applied to it (section 12A), reflecting the separate consumer-protection regime for heat networks that the UK Parliament introduced across Great Britain.

Consents: approving a specific network

Part 2 creates heat network consent, a permission for constructing and operating a particular network. Local authorities can be designated as consent authorities for their areas; Scottish Ministers can call in applications and hear appeals; and an application can be combined with a planning application, with deemed planning permission in some cases. The Act also asks for guidance on effective community engagement, which matters when streets are dug up for pipes.

Zones and zone permits: who serves an area

Part 3 lets local authorities, or Scottish Ministers, designate heat network zones: areas judged particularly suitable for a network, typically where heat demand is dense and there are large anchor buildings or a waste heat source. Local authorities have a duty to review whether parts of their area should be zoned. Part 4 then allows a heat network zone permit to be granted, giving a single operator the right to develop a network in the zone for a set period. Exclusivity is the point: it gives investors the security of knowing that the customers who make a large scheme viable will not be split among competitors.

Building assessment reports: which buildings could connect

Part 5 places a duty on owners of non-domestic buildings to prepare building assessment reports. Each report assesses the potential for the building to be supplied with heat from a network, and how long its existing heating system is expected to keep operating effectively and efficiently. How and when the reports are prepared is left to regulations. For a council planning a zone, these reports show which public buildings, offices and shops could connect and when their boilers will need replacing anyway, which is the cheapest moment to switch.

Powers over land and key assets

Licence holders gain powers similar to those of other utilities (Part 6): compulsory acquisition of land, network wayleave rights to lay and keep pipes on private land, survey and repair access, and road works. Part 7 asks operators to identify key heat network assets, such as the energy centre and main pipes, and allows transfer schemes so that a network can be kept running if its operator changes or fails.

What it means in practice

Why it matters for 2045

Scotland's net zero date of 2045 (see our explainer) cannot be met without decarbonising heat in existing buildings, most of which still burn gas. Heat pumps will serve most detached and rural homes; heat networks are the main alternative in tenements, city centres and campuses where space for individual equipment is limited. The 2021 Act does not build networks, but it gives councils, investors and building owners a common set of rules to plan them.

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