Heat Pump Sector Deal Expert Advisory Group minutes: March 2021 - manufacturing session

Minutes from the meeting of the group in March 2021.

Attendees and apologies


  • David Pearson 
  • Phil Hurley 
  • Rodney Ayre 
  • Andrew Bissell 
  • Mike Thornton 

Scottish Government officials:

  • Craig Frew
  • Alastair Robertson 

Items and actions

Key points 

Scotland should look to position itself as a hub for heat pump manufacturing. It can attract heat pump manufacturers to create bases in Scotland by: 

  • ensuring there is availability of skilled labour, potentially by creating a ‘centre of excellence’ for upskilling 
  • having a strong, diverse and competitive tier 2 supply chain to serve heat pump manufacturing 
  • moving to deploy significant volumes of heat pumps before other UK regions 

There is opportunity for innovation within the packaging of heat pumps to make installations easier.

There are businesses in Scotland that have the skills and knowledge to contribute to the heat pump supply chain, and they could scale up significantly if there was a clear market demand.

Pre-commercial procurement could be used to stimulate the Scottish supply chain and encourage new-build developers to begin installing heat pumps before regulations take effect. 


Mitsubishi have been approached by the UK Government to discuss the scaling up of heat pumps and how this could be impacted by Brexit.

A point was made that government needs to ensure there is labour availability across the supply chain. The labour intensity of installing heat pumps can be reduced if further assembly and packaging is carried out by the manufacturer– there is opportunity to innovate in this area. It was commented that this is the approach taken in Germany. Installers often don’t take this option when it’s made available because they believe they can get the other parts cheaper elsewhere.

It currently isn’t possible to source most components for large heat pumps in the UK, and it would be difficult to change this. However, there is some capability in Scotland to carry out the ‘pipe bashing and welding’ which could potentially be ramped up if these businesses see significant market demand. It was suggested that Scotland could manufacture its own heat exchangers and heat storage/hot water cylinders. 

It was commented that although Scottish businesses with the necessary capability to contribute to the heat pump supply chain exist, many of these work in the oil and gas industry. They are accustomed to the higher profitability of that sector and would have to reduce their prices to move into other sectors. 

There was a discussion on whether Scotland could create a manufacturer base to supply heat pumps with capacity between the typical domestic (16 kW) and industrial (500 kW) scales. Sunamp are currently working with a French manufacturer that works in this range– businesses like these could be persuaded to invest in Scotland if they received the right support and there was sufficient market demand. 

There was a debate on whether there is demand for this size of heat pump. This is somewhat dependent on the Scottish Government’s policy position on whether large buildings will have their own heat pumps or connect to a heat network.

It was stated that by value, 70% of supply for Mitsubishi is imported. Increasing the supply from Scotland is an important economic opportunity. Also, if there was a strong and cost effective supply chain this would encourage manufacturers to invest in Scotland. A comment was made that with the huge demand for heat pumps signalled in the UK, on top of the increasing demand in Europe, manufacturers will be looking to increase manufacturing capability here. Also, the UK will need different heat pumps to Europe because of the different electricity supply. Scotland can secure this investment if it looks the most attractive to manufacturers. 

Another aspect which could attract manufacturers is having a strong labour resource available. This is a key priority for current UK manufacturers too. It was suggested that government could support a ‘centre of excellence’ to provide training on heat pump skills which manufacturers could play an active role in. This could be part of an industrial hub for decarbonisation, where supply chain businesses could be located too. 

Gas boiler manufacturers are very willing to move into the heat pump market when changing demand dictates this and a few significant businesses have become members of the HPA in preparation for this. 

It was suggested that although the potential Scottish market is small in comparison to the rest of the UK, if significant roll-out occurs in Scotland first then both tier 1 and tier 2 manufacturers would create a base here. 

There was a discussion on whether pre-commercial procurement (PCP) funded by government would be useful for the sector. PCP could play a role in encouraging new-build developers to start transitioning towards heat pumps ahead of regulatory change. It was suggested that this could be used to create an output that maximised the use of Scottish supply, which wouldn’t be economically competitive otherwise. A PCP offer would also provide a clear signal to the supply chain that the Scottish Government is determined to use Scottish businesses to decarbonise heat. 

It was commented that the high-temperature industrial heat pump market is stagnating following a lack of support through the BEIS Green Distilleries Fund. The whisky industry are keen to explore the use of HTHPs to decarbonise their production, but they need to see successful demonstration before investing in it.

The point was made that manufacturers can work together to create mutual benefit and a strong industry in Scotland. It was suggested that the expert advisory group could make a recommendation on creating a stronger industrial forum for the sector. 

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