Heat networks

We are supporting the deployment of heat networks in Scotland to help us meet climate change targets.

Heat networks are a form of infrastructure consisting of insulated pipes and heat generation which supplies heat (in the form of hot water or steam) to homes and non-domestic premises, such as businesses and the public sector.

Heat networks are often more efficient than individual fossil fuel heating systems, and can also be run fully from renewables or recovered waste or surplus heat sources. They can allow the heat source to be changed to one compatible with Scotland’s climate change targets without further disruption to the heat users. Our 'What are ‘heat networks’?' blog explains more about the technology and its benefits.

Heat networks have the capacity to reduce – or remove – the emissions associated with heating buildings and the Committee on Climate Change has recommended that heat networks should form a part of Scotland’s future heat supply.

Heat Networks (Scotland) Act

The Heat Networks (Scotland) Act 2021 (the Act) received Royal Assent in February 2021.

The Act aims to accelerate the deployment of heat networks in Scotland through the introduction of a regulatory system aimed at boosting consumer confidence in the sector and providing greater certainty for investors.

The Act sets statutory targets for heat network deployment in 2027 and 2030, which are equivalent to an estimated 120,000 and 650,000 additional homes being connected to heat networks. This helps it to contribute to the achievement of the targets and ambition set out in Scotland's 2018 to 2032 climate change plan.

We will work with the heat networks sector and local government to develop detailed regulations and statutory guidance in order to put in place a functioning regulatory system (subject to public consultation) by 2024.

The structure of this regulatory system, as set out in the Act, is as follows:

Building assessment reports: a requirement relating to non-domestic buildings to assess the suitability to connect to heat networks. This applies to the public sector and may, with secondary legislation, extend to other non-domestic buildings
Heat network zones: requiring the review and designation of areas particularly suitable for heat network development and operation across Scotland
Heat network permits: attracting new, and lower cost investment in the sector by awarding these long-term permits to develop and operate heat networks, providing longer term assurance about the customer base available
Heat network licences: regulating the market so that homes and businesses are supplied by solvent, fit and proper operators, while requiring networks to be developed and maintained to high standards
Heat network consents to build and/or operate heat networks: including creating a bespoke system of scrutiny for new networks before they are consented for development
Powers for licence holders: granting new rights for heat network operators – such as wayleaves, compulsory purchase, road works and surveying rights – to reduce the costs and time involved in construction and maintenance
Heat networks assets schedule and transfer scheme: requiring heat networks to have a scheme in place to transfer operational rights to a third party to ensure sustained supply, if and when needed

As a first step, however, the Act commits us to publishing and laying a Heat Networks Delivery Plan before parliament by 1 April 2022. This forthcoming document, currently undergoing consultation review, will provide an overview of how provisions from the Act, along with related policies, will contribute to increased use of heat networks across Scotland.

Impact assessments

We undertook the following impact assessments to support policy development of the Act:

Additional support

Alongside the Act, we are continuing to demonstrate its strong support for the heat networks sector by:

making £300 million available through Scotland’s Heat Network Fund for the roll out of new zero emission heat networks and communal heating systems, as well as the expansion and decarbonisation of existing heat networks
offering low-rate, unsecured capital loans to overcome a range of barriers via the District Heating Loan Fund (since 2011, we have offered over £15 million to 50 different projects)
working with the construction sector to ensure that new homes consented from 2024 use renewable or low carbon heat – opening up a clear market opportunity for heat network developers and other technologies
announcing a £50 million Heat Networks Early Adopter Challenge Fund – a ring-fenced fund for local authority heat network projects - as part of our Budget
introducing a district heating relief, guaranteed until 2032, in order to provide certainty to investors (more detail to be provided in due course)

Heat Networks pre-capital support

Heat networks are technically complex infrastructure projects requiring a range of specialist expertise. The Heat Network Support Unit (HNSU) will support the growth of heat networks by addressing key challenges in the pre-capital stages of heat network development and building capacity across the public sector to deliver successful projects.

Working primarily with public sector organisations, the HNSU will:

identify and support prospective heat network projects, offering advice and grant funding for pre-capital stages of works, e.g. developing feasibility studies and Outline Business Cases
offer advice on and support toward procuring of advisors technical, financial and legal advisors
build capacity and expertise across the public (and private) sector by creating best practice and standardisation on developing and running successful heat network projects in Scotland

The HNSU is sponsored and managed by the Scottish Government, with Scottish Futures Trust and Zero Waste Scotland as core partners.

Projects can find more information on the Heat Network Support Unit website or contact HeatNetworkSupport@gov.scot.

Scotland's Heat Map

We are working with a large number of public bodies to provide Scotland Heat Map, a tool for identifying opportunities to reduce carbon emissions from heat in buildings across Scotland. It can be used to:

identify where there are opportunities for heat networks
assess heat density and proximity to heat sources

We aim to update the heat demand estimates in the heat map annually. Additional data in the map (including energy supply points, heat network locations, tenure, planning constraints and geothermal data) is updated when appropriate. We are sharing the heat map with every local authority in Scotland via the Scotland heat map framework agreement, to help them plan heating networks and identify unused excess heat. Other public sector bodies can register interest in using the heat map by emailing heatmap@gov.scot.

We also provide a simpler version of the map that anyone can use through the Scotland Heat Map Interactive website. Heat demand estimates are presented for areas ranging from 50 metre grid squares to whole local authorities. It also lets you see where there are existing and planned heat networks and existing and potential sources of energy supply, alongside other relevant data. Most of the data can be downloaded in a range of formats including, where appropriate, web mapping services, web feature services, text files and/or image files. There is a quick user guide on how to use the Scotland Heat Map interactive.

We have provided a range of documentation and guidance for users of the Scotland heat map.

Information