Heat in buildings: 2022 development funding invitation

Scope

This funding invitation will target £1 million development support for projects with viable feasibility studies. Projects are sought that have potential to deploy low carbon heat solutions for buildings that support the ambitions for Scotland to achieve net zero emissions by 2045.

We wish to consider support for projects in development in order to create a pipeline for future deployment and to build viable business cases that support the energy sector and supply chain. For this invitation, funding will support the development of full investment grade business cases, with a view to projects advancing towards eligibility for future capital support or to inform organisations’ internal investment decisions and their ability to secure other sources of capital investment and match funding.

Development support of up to £50,000 is available to help projects complete an Investment Grade Business Case and progress to capital readiness. Projects must provide a minimum of 50% match funding towards the costs of the business case. Guidance on the type of projects that will be considered for funding is provided below:

• this invitation has been designed to stimulate and accelerate the development of a pipeline of zero or low emission heat projects across Scotland, including the provision of support to projects in urban, rural, island and remote parts of Scotland and areas that are off gas grid
• applications will be considered from private and publicly led organisations, although it is acknowledged that most projects are likely to be supported by a consortia of partners
• projects must have a viable feasibility study, be of a large scale and be based in Scotland. As well as reducing carbon emissions, successful projects will also demonstrate economic and social benefits for Scotland and be replicable
• projects that expand capacity and increase the end users of an existing zero emission scheme will be considered
• applications for single domestic properties will not meet the requirements of this infrastructure call, however support for these projects is available through the Energy Savings Trust
• established technologies that are commercially available In Scotland, such as stand-alone on-shore wind, solar and large-scale biomass are not eligible unless where one of the above is an element of a wider project combining a range of technologies
• please also note that energy generated by natural gas and projects utilising the Green Gas Certification Scheme (GGCS) administered by Renewable Energy Assurance Limited are not eligible
• supported technologies include, but are not limited to, heat pumps, heat networks, waste water heat, geothermal, hydrogen, heat recovery, thermal storage, anaerobic digestion and bio-gas. Projects must be at a Technology Readiness Level (TRL) of 7-9

Policy context

As set out in the 2020 Climate Change Plan Update, Scotland’s long term climate change targets will require the near complete decarbonisation of our energy system by 2045, with renewable energy meeting a very significant share of our needs. By setting a 2045 target for net-zero emissions for all greenhouses gases, impetus is provided to markets, businesses and industries to shift to low and zero carbon technologies and practices.

We published the Heat in buildings strategy in October 2021. Building on the policies and actions set out in the 2020 Climate Change Plan Update, this strategy sets out a pathway to zero emissions buildings by 2045 and details a series of near-term actions to put us on a clear path towards this, as well as a range of further, longer-term commitments to accelerate and further scale up the transformation of the nation’s building stock.

In order to meet our interim climate targets and ensure long-term delivery of our net zero objectives, by 2030 around 50% of homes, or over a million households, will need to convert to a zero or low emissions heating system. Reducing emissions from homes will mean converting the vast majority of the 167,000 off-gas homes that currently use high emissions oil, LPG, and solid fuels, as well as at least 1 million homes currently using mains gas, to zero emissions heating. By 2030, we will also need to convert an estimated 50,000 of Scotland’s non-domestic properties to zero emission sources of heat.

The Clyde Mission aims to put the River Clyde back at the centre of our economy and communities as a national asset and at the heart of our plans for a net zero future. Through the Clyde Mission, we are working with partners across sectors to drive a national, place-based programme to make the Clyde an engine of sustainable and inclusive growth for the city, the region and Scotland. At least £25 million will be available to take forward heat decarbonisation projects along the Clyde in the current parliamentary term.

To meet the ambition for energy efficiency and zero emissions heat deployment set out above, we need to quickly ramp up the number of installations of low and zero emissions heating systems being installed per annum.