Green Heat Finance Taskforce minutes: January 2023

Attendees and apologies

• Patrick Harvie MSP – Minister for Zero Carbon Buildings, Active Travel and Tenant’s Rights (Meeting Chair) 
• Sara Thiam – Scottish Council for Development and Industry 
• Kirsty Hamilton – Independent 
• Kate Morrison – Scottish Financial Enterprise 
• Emma Harvey-Smith – Green Finance Institute 
• Eddie McAvinchey – Scottish National Investment Bank 
• Ian Cochran – Edinburgh University Business School/Institute for Climate Economics 
• Rufus Grantham – Bankers Without Boundaries 
• Andy Kerr – Climate KIC 
• Simon McWhirter - UK Green Building Council Scotland (UKGBC) 
• David Steen – UKGBC 
• Joanne Wheeler – UKGBC 
• Julie Robertson – Glasgow City Regions Programme Management Office 
• Paul Kilby – Glasgow City Regions Programme Management Office 
• Kit England – Glasgow City Regions Programme Management Office 
• Amy Tickell – Scottish Government (SG) Head of Heat in Buildings Investment Team 
• Saskia Kearns – SG, Head of Heat in Buildings Strategy (HiBS) Public Engagement and Support Team 
• Jamie Gregory – SG, LHEES Policy Officer
• Drew Murphy – SG, Heat in Buildings (HiB) Convention of Scottish Local Authorities (COSLA) and Local Government Heat Policy Team 
• Lorna Orr – SG, HiBS Domestic Regulations Team 

Secretariat: 

• Gareth Fenney – SG, Head of Head of Heat Networks and Investment Unit 
• Michelle Rayneard – SG, Heat Buildings Division 
• Toby Tucker – Scottish Futures Trust, Net Zero Team 
• Peter Irving – SG, Heat in Buildings Division 

Apologies:

• Sandy MacDonald – Scottish Financial Enterprise  

• Lewis Shand Smith – Energy Consumers’ Commission 

Items and actions

Welcome

The Chair welcomed members to the seventh meeting of the Green Heat Finance Taskforce (GHFT) the main focus of which was place-based mechanisms. 

Summary note and actions points from previous meeting, including member notification of any conflicts of interest. 

All members confirmed they were content with the Summary note and Action Points from the previous meeting of 2 November 2022.  No conflicts of interest were raised.  Members were reminded to raise any potential conflicts of interest during the meeting should the need arise.  All three actions from the previous meeting were noted as have been completed.  

Secretariat Update –Scottish Government 

Highlighted change of personnel in secretariat. 

Social Housing Sub-Working Group 

First social housing working group took place in November last year.  A physical workshop will be held shortly to continue to discuss stakeholder concerns and potential private sector financial support.

Action 1

SG to feedback relevant findings from workshop and any wider social housing stakeholder engagement. 

Interim Report 

It was noted that Secretariat had created a draft interim report structure and content, which was based upon the objectives of the GHFT.  Feedback is sought on this from members, including any relevant stakeholder discussions that members may have had. 

Action 2

SG to circulate for members’ input.

Future GHFT Meetings 

The next (eighth) Taskforce meeting will be held in March and will focus on the draft interim report.  This will be circulated to all members prior to the next meeting. 

Subsequent Taskforce meetings – which are scheduled to be held on 17 May and 5 July – have yet to be assigned topics for consideration.  Secretariat therefore invite Taskforce members to propose central topics or themes for discussion which may need re-visiting or where there is a gap in topic coverage. 

Action 3

All to consider central themes or topics for consideration at May and July GHFT meetings. 

Action 4

All to provide any useful feedback received from stakeholders. 

Presentations 

Presentation 1: LHEES methodology and implementation, Jamie Gregory, SG.

Members noted that Local Heat and Energy Efficiency Strategies (LHEES) would evolve as SG introduced future standards and regulations, as well as new delivery and funding programmes.  They would also continue to develop to reflect regional and local policy. 

It was mentioned that LHEES would provide a foundation on which future investment decisions could be made, for example, helping to target those at highest risk of fuel poverty, but also helping to identify areas where a local approach would bring value to heat decarbonisation programmes. 

Presentation 2: Overview of place-based mechanisms, by Joanne Wheeler of UKGBC. 

UKGBC presented a ‘blueprint’ for what a city led home retrofit programme might look like, based upon combined local authority clusters which roll out; multi tenure local area schemes to low-income households; and a wider area scheme targeting ‘able to pay’, early adopter owner occupiers, thereby providing a firm and sustainable foundation for rapid scaling. 

In 2020, with assistance of a Steering Group, and in consultation with its membership, UKGBC created a ‘Retrofit Playbook’, which was guidance for Local Authorities on how they might develop retrofit policies and strategies so as to drive retrofit at-scale.  Building on the ‘Retrofit Playbook’, UKGBC have joined forces with some Local Authorities and the MCS Foundation to identify successful existing retrofit approaches with a view to address the barriers to adoption. 

Presentation 3: Neighbourhood financing mechanisms, Eddie McAvinchey (SNIB); and Rufus Grantham (BWB)

Overview of SNIB’s focus on decarbonisation of places, with Net Zero Heat (NZH) being regarded as a key strategic area of investment for the Bank.  NZH spoke to all three of SNIB’s missions of: (i.) reduction of the carbon footprint of our homes and buildings; (ii.) better quality housing while also reducing fuel poverty; and (iii.) Low carbon technologies and job creation. 

The bank had mapped out a number of pathways to decarbonising places and how the bank might become involved in this area, with supply-chain finance (debt or equity; new or existing technologies) being consistent theme across the whole field.  The neighbourhood decarbonisation model was of particular interest, because of the scale of the solution and the holistic approach that it provided.  A place-based approach could facilitate the fixing of multiple problems/issues at the same time, and, as such, represented an efficient deployment of capital, leading to better overall outcomes.  

SNIB was interested in pilots that would explore different location types to gauge what was replicable at scale and pace.  An urban pilot for neighbourhood retrofit, and a rural pilot for retrofit, the latter thought to have the greater cost benefit potential on account of the use of LPG and other more expensive fuels, as well as the higher levels of associated carbon emissions.  Urban had greater density and greater overall number of properties, hence a different mechanism to address. 

Presentation 4: Retrofitting by region, Paul Kilby and Kit England of Glasgow City Regions (GCR) Programme Management Office

The presentation on GCR’s Place Based Home Energy Retrofit fell into two categories – 

1. developing a regional evidence base to inform domestic retrofit (at scale); and 
2. potential finance options. 

The presentation highlighted how a large-scale home energy retrofit programme was expected to deliver the following high-level benefits – 

• deliver on sustainability, net zero by 2045, the Heat in Buildings Strategy, and climate policies
• deliver significant economic stimulus
• create meaningful new jobs and support existing jobs in the City Region
• significant opportunities for local businesses
• reduce residents’ energy bills and help to tackle fuel poverty

In terms of financing the delivery of retrofit, GCR recognised that this would require a complicated blend of public and private finance. 

Group discussion: presentations 

Members discussed the four presentations and the suitability of a place-based approach more generally:

• it was mentioned that GCR’s large scale home energy retrofit programme could be regarded as a demonstrator model for the place-based approach that had been discussed at this meeting
• lack of technical funding to support local authorities develop models for area retrofit models was highlighted as well as the need to work within existing local authority processes to ensure success
• a taskforce member noted that some energy retailers were beginning to develop commercial retrofit models
• the importance of generating long term demand to stimulate supply and the creation of a delivery/ financial model was highlighted. The approach to the retrofitting of rural versus urban areas was seen as a challenge which may benefit from a pilot

• members queried whether there were national level barriers which were impacting on the decarbonisation of Scotland’s buildings

Action 5

All to feedback to Secretariat any issues SG could usefully raise with Whitehall counterparts. 

March Meeting and any other business

The group noted that the next meeting of the GHFT would be held at Saint Andrew’s House on 15 March 2023 and would focus on the interim report.