Scotland's Heat Network Fund: application guidance

Overview

Scotland’s Heat Network Fund (SHNF) is making £300 million available to support the development and roll out of heat networks across Scotland. 

This fund will stimulate investment and grow the low carbon heat sector, whilst reducing greenhouse gas emissions. 

Scotland’s Heat Network Fund projects must: 

• be large scale and based in Scotland  

• deliver emissions reductions 

• demonstrate a positive social and economic benefit  

Heat networks: what they are  

Heat networks include both district and communal heating, as defined by the Heat Networks (Scotland) Act 2021. 

A ‘district heat network’ is defined as a network where thermal energy is distributed from one or more sources of production to more than one building. 

A ‘communal heating system’ is a system where thermal energy is distributed from one or more sources of production to one building comprising more than one building unit. 

Heat networks can help reduce greenhouse gas emissions and energy bills to help tackle fuel poverty. They are used extensively across Europe. Currently heat networks supply only 1.5% of heat in Scotland but are a key strategic technology for reducing emissions from heating our homes and buildings. 

Heat networks have an important role to play in achieving the ambitions set out in the Heat in Buildings Strategy, including the target to have zero direct emissions heating in at least one million homes, and the equivalent of 50,000 non-domestic buildings by 2030.  

Objectives: why we have this fund 

Our ambition is for a heat network sector that: 

• delivers affordable clean heat supporting the delivery of emission reduction and fuel poverty targets 

• develops local supply chains and attracts new public and private investment 

• contributes to the development and operation of an integrated resilient energy system 

 The objectives of Scotland’s Heat Network Fund are to: 

• stimulate and accelerate the delivery of zero direct emissions heat network opportunities across Scotland through capital co-funding 

• help prepare the market for future regulations including the Heat Network (Scotland) Act 2021 and support meeting our deployment targets 

• support the reductions of our heat demand and ensure poor energy efficiency is no longer a driver for fuel poverty 

• create smart resilient heat networks that provide us with a reliable and affordable source of heat 

• support a secure supply chain with high value, local, sustainable jobs across Scotland and help people to transition to new, secure jobs as part of a just transition 

• support the delivery of heating systems that enable the efficient use of Scotland’s renewable energy sources 

• support the delivery of heat networks that enable flexible and stable operation of our energy networks