Potential heat network zones: first national assessment

1 Introduction

The First National Assessment of Potential Heat Network Zones (FNA) carries out an initial, automated analysis to identify potential zones for heat networks in Scotland, based on heat demands captured within the Scotland Heat Map. The approach and outputs align to the current methodology for the identification of potential zones for Heat Networks that forms part of the LHEES (Local Heat and Energy Efficiency Strategies) Methodology V03 (August 2021) and was agreed with a Steering Group consisting of Scottish Government representation, with local authority input provided during the development of the LHEES methodology. This report details the base data and methodology used to inform and carry out the FNA, and provides a summary of the initial outputs which are generated through use of Baseline and Stringent criteria, and presented across a range of geographies. A high-level comparison of these outputs is made with the outputs generated from the 'Opportunity areas for district heating networks in the UK: second National Comprehensive Assessment (NCA)' report.^[4]

The focus of the work is on potential zone identification through assessment of heat demand density, providing an initial assessment of the areas that are most suited to heat networks from a demand density perspective. The analysis does not consider the economic viability or the detailed technical or stakeholder aspects of project opportunities within potential zones. Further detailed assessment is required to understand if heat network projects within potential zones could offer heat to properties at a cost that is competitive against alternative options. It is emphasised that the potential zones identified, and the summaries of key characteristics reported within potential zones, should be considered in this context.

Structure of this report

The work covered within this report is split into two main phases:

• Phase 1 – covers setup and approach. Within this report the main elements this covers are base data and a non-technical summary of the methodology used for the FNA.
• Phase 2 – this provides an overview of the outputs produced using the methodology in Phase 1. This includes a set of maps, descriptions, Geographical Information System (GIS) data and summary data tables. Phase 2 is split into: Phase 2A, which uses a Baseline set of potential zone identification criteria and; Phase 2B, which uses more Stringent criteria that help to focus the identification of potential zones in heat dense locations. Two sets of criteria are used in Phase 2B: Stringent and an additional set which is more stringent again.

Phase 1 is summarised within Section 2 of this report, whilst Phase 2 is detailed in Sections 3, 4 and 5.

1.1 Background

Policy context

This work provides an initial, national assessment of heat network potential across Scotland. It is framed by two key policy drivers: the ongoing development of Local Heat and Energy Efficiency Strategies (LHEES) and the Heat Networks (Scotland) Act 2021 (the 2021 Act).^[5] Within this context the work aims to support the development of policy and regulations, including informing:

a) The Heat Networks Delivery Plan^[6] (as detailed in the 2021 Act), published in March 2022 after public consultation^[7] in 2021.

b) The local identification of potential zones for heat networks as part of LHEES.

The work may also support wider policy development.

As set out in the Heat in Buildings Strategy, the Scottish Government is undertaking an LHEES National Assessment, using the LHEES methodology developed with local authorities, and national datasets to carry out a Scotland-wide assessment of the building stock and identify initial strategic heat decarbonisation zones. Each Scottish local authority has received combined outputs for their local authority area from both the LHEES National Assessment and the First National Assessment of Potential Heat Network Zones.

The Scottish Government is also currently providing funding to 14 local authorities to take the first steps in developing a full, local authority-wide strategy, testing the LHEES methodology and building on the outputs from the national assessments. Based on feedback from this testing, and a review to ensure that in following it local authorities can fulfil the requirement of the 2021 Act to consider whether one or more areas in its area is likely to be particularly suitable for a heat network, the Scottish Government will update the LHEES methodology as required.

It is worth highlighting that the LHEES process includes sense-checks that draw on the knowledge base of local authorities and will consider how local factors could impact on the potential zones identified by the FNA.

Potential next steps – as part of the wider LHEES work being undertaken

It may also be useful for follow-on activity to include the following which are not addressed in the scope of this report:

• consideration of current heat network development pipeline, where these projects are located relative to potential zones and the areas within the potential zones identified that could be catalyst sites for near-term development of heat networks.
• stakeholder engagement to capture wider heat network activity and; engagement with local authorities to test approaches, gather feedback and refresh outputs at a local level.
• the development, testing and use for national assessment of approaches to identify fifth generation heat networks and communal heating.

1.2 Project objectives

Fitting within the background described above there are four broad objectives for the FNA in terms of the Phase 1 and Phase 2 activity.

1. To provide the first national assessment of the size and location of potential zones for large heat networks (indicatively fourth generation).^[8] In reference to the 2021 Scotland Heat Networks Act,^[9] this assessment focuses on the district heat network scale (as defined in Section 1(2) of the Heat Networks (Scotland) Act) and not on communal heating.

2. To provide at a national and local level information about key characteristics of buildings and households within these potential zones.

3. To feed in specific outputs from the analysis to the ongoing LHEES National Assessment project (GIS shapefiles of potential heat network zones from Phase 2A and 2B; maps, summary tables and an accompanying summary note are to be packaged and shared with local authorities).

4. To give an indication of the potential zones with greatest heat and anchor load density (Phase 2B).