Scotland’s Heat Network Fund (SHNF) queries: EIR release

Information requested

1. How much of the £300m has been spent, earmarked and available?

2. Are you able to comment on what will happen to unspent funds e.g. will there be another round of funding in April 2026?

Response

The answer to your question is as below:

Although a commitment to make £300m available to the sector was made in 2021, Scotland’s Heat Network Fund (SHNF) is a demand-led scheme, and would require sufficient applications to enable allocation of the full £300m made available. Fund allocations must be agreed each year in the context of the current financial situation and ministerial priorities, with the demand for our schemes taken into account.

1. Since 2022, Scottish Government has spent approx. £9.3m to heat network projects in Scotland through Scotland’s Heat Network Fund. A further £2.5m is committed and will be spent in financial year 2025/26, subject to final budget allocations. The Fund has seen an increase in capital ready projects coming forward since the Fund launched in 2022. A key reason for this increase in pipeline activity is the market signal provided by the launch of SHNF.

Scottish Government has also provided invested in heat network projects through legacy projects from the Low Carbon Infrastructure Transition Programme and, in total, Scottish Government has invested more than £31.8m in heat network projects since 2022.

SHNF is currently reviewing new applications, which if awarded, would total a combined grant request of approx. £53m. This is in addition to already committed grant to heat network projects continuing to complete in FY 25-26 of approx. £12.9m. Budget allocations for FY 25-26 are currently under review and so a figure of the funding available through SHNF this financial year cannot be provided yet.

2. We appreciate that due to the long periods of development and construction required to deliver some heat networks, the March 2026 deadline to claim grant from SHNF may limit future project development. We are considering options to manage this.

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