Heat networks delivery plan - draft: consultation analysis

1. Executive Summary

1.1 The Heat Networks (Scotland) Act 2021 commits the Scottish Government to publishing a Heat Networks Delivery Plan (HNDP) by 1 April 2022, and to consulting with necessary persons before doing so. Scotland has committed to the wider deployment of heat networks via the inclusion of statutory targets.^[1] This Executive Summary sets out the key findings from a qualitative analysis of consultation responses that were submitted about the Draft HNDP.^[2]

1.2 A total of 48 responses were received, of which 45 were from groups or organisations and 3 were from individual members of the public. Some responded across all questions while others focused on specific issues.

Summary of key findings

1.3 Scottish Ministers are required to set a new 2035 target for heat network delivery. This prospect was met with a mix of views, but some degree of uncertainty. Some respondents thought the existing target should be the focus while others thought more time was needed to decide what a sensible target for 2035 would be.

1.4 Alleviating fuel poverty whilst moving to heat networks, and low carbon heating more generally, was typically identified as a substantial challenge. Some respondents were keen to point out that fuel poverty is a complex issue with multiple causes, and that low carbon heating technologies are not the only means of addressing it. A small number of respondents did, however, frame the heat transition as an opportunity to address fuel poverty.

1.5 Energy efficiency retrofit of the existing building stock was routinely raised by respondents across questions as essential to reducing heat demand and addressing fuel poverty. Respondents also noted the significance of energy efficiency for deploying more efficient lower temperature networks.

1.6 The costs associated with heat networks were raised in many responses across questions. This included points on high development and upfront capital investment costs, with respect to both decarbonising existing networks and installing new low carbon networks. Concern about costs also included the impact heat networks (and their associated regulation and licensing) could have on customers' energy bills. There were mixed views about whether heat networks would result in higher or lower energy bills. The link between upfront costs and energy charges (standing charges and tariffs) required to cover investment was also made.

1.7 Respondents were generally supportive of the idea of a Building Hierarchy and there were some calls for residential buildings (particularly large blocks) to receive greater priority. Concerning demand assurance, respondents often highlighted that mandatory connections could encounter opposition, but that this could be ameliorated by some form of financial incentive.

1.8 A pre-capital support unit providing the expertise needed for project development was viewed favourably by many respondents, and a service that was considered underdeveloped at present. Particular roles the support unit should provide are detailed on p16.

1.9 The principle of common technical standards for heat networks was overwhelmingly supported. Some respondents however, pointed out that they would welcome more detail on potential specific standards before making judgement.

1.10 There was some question about whether energy from waste (EfW) would be classified as low carbon in the long term and whether access to available waste heat sources could be secured.

1.11 Greater data collection and availability was broadly supported and viewed as important for use in public sector strategies and the Scotland Heat Map. Further incorporation of data about the commercial sector was particularly welcomed. The potential benefits from better data included making the case for new networks, identification of opportunities for integrating networks and overall network resilience. Many respondents also pointed out, however, that data gathering should be appropriate and proportionate, and cognisant of the eventual burden that it could place on network operators.

1.12 There was a very high level of support for non-public, non-domestic buildings to produce building assessment reports (BAR). This approach was thought to enable better identification of both the buildings suitable for network connection, but also potential energy efficiency improvements. It was also suggested as valuable to supporting the Local Heat and Energy Efficiency Strategies (LHEES) zoning process.

1.13 A regulated market was largely supported. Respondents however, highlighted the importance of effective regulation which 'had teeth'.

1.14 A proportional approach to the forthcoming licensing regime was seen as important. Single customer or self-supply networks were typically viewed as requiring less licensing attention than those serving multiple customers. There were also calls for community or not-for-profit schemes to be treated differently to commercial network operators, for example, by being exempt from licensing fees. Suggestions for exemptions also included networks that already had planning permission. There were however several respondents that believed that no project should be fully exempt from the consenting process.

1.15 The principle of allocating permits to allow exclusive development of a heat network in a particular area received largely implicit support. Objections, when raised, related to a belief that permitting would engender complacency in the permit holder. Permit durations varied, but typically overlapped with the proposed 25-40 years.