Heat Networks (Scotland) Bill: BRIA
Business and regulatory impact assessment (BRIA) for the Heat Networks (Scotland) Bill.
Purpose and intended effect
Title of proposal
1. Heat Networks (Scotland) Bill
2. The Climate Change (Emissions Reduction Targets) Act 2019, was passed by the Scottish Parliament on 25 September 2019 and received Royal Assent on 31 October 2019. The Act requires Scotland to reach net-zero greenhouse gas emissions by 2045, with interim reductions of 75% required by 2030, and 90% by 2040.
3. One of the major challenges to meeting these targets will be reducing the emissions caused by heating our homes and other buildings.
4. Heat networks are a form of infrastructure consisting of insulated pipes and heat generation which supplies heat (in the form of hot water or steam) to homes and non-domestic premises, such as businesses and the public sector. Heat networks are often more efficient than individual fossil fuel heating systems, and can also be run fully from renewables or recovered waste or surplus heat sources. They can allow the heat source to be changed to one compatible with our climate change targets without further disruption to the heat users. Heat networks therefore have the capacity to reduce – or remove – the emissions associated with heating buildings and the Committee on Climate Change has clearly demonstrated that heat networks will provide part of Scotland's future heat supply.
5. In light of this, the Programme for Government (PfG) 2019-2020 included a Heat Networks (Scotland) Bill as part of this year's legislative programme. The overall purpose of the Bill is to encourage greater deployment of heat networks in Scotland, in order to help reduce emissions from heating homes and buildings.
6. The Bill will also contribute to the Scottish Government's target that 50% of all energy consumption come from renewables by 2030.
7. In bringing forward this legislation, the Scottish Government is also seeking to fulfil recommendations made to it by the Competition and Markets Authority (CMA) in July 2018, that the introduction of regulation to the heat network sector is required ahead of its expected growth.
Rationale for Government Intervention
8. In January 2018, an Industry Task Force identified that two of the key challenges to accelerating the development of more heat networks, were attracting private investment and increasing consumer acceptance of what is as yet an emerging solution in the UK.
9. The Scottish Government agrees with this view and the Bill therefore seeks to increase consumer confidence in heat networks, while also creating conditions to de-risk investment.
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