Publication - Minutes

Heat Pump Sector Deal Expert Advisory Group minutes: October 2020

Published: 30 Nov 2020
Date of meeting: 29 Oct 2020

Minutes from the introductory meeting of the group on 29 October 2020.

Published:
30 Nov 2020
Heat Pump Sector Deal Expert Advisory Group minutes: October 2020

Attendees and apologies

Attendees 

  • Mike Thornton, Energy Savings Trust (Chair) 
  • Caroline Bragg, Association of Decentralised Energy 
  • Paul Jordan, Energy Systems Catapult
  • Phil Hurley, Heat Pump Association 
  • Andy Mason, Lloyds Banking Group
  • Ian Rippin, Microgeneration Certification Scheme
  • Rodney Ayre, Mitsubishi 
  • Clementine Cowton, Octopus
  • Helen Melone, Scottish Renewables 
  • Martyn Raine, SNIPEF
  • Dave Pearson, Star Refrigeration
  • Stewart Wilson, TIG 
  • Ross Armstrong, Warmworks 
  • Graeme Bruce, West Highland Housing Association

Scottish Government secretariat:

  • Lorraine King
  • Craig Frew 
  • Alastair Robertson

Scottish Government observer:

  • Suzanne Le Miere

Apologies:

  • Lewis Shand Smith, Energy Consumers Commission

    . Welcome and Introductions 

    The Chair made introductions to the Expert Advisory Group, emphasising the importance of the need for different stakeholders related to the heat pump sector to work together to ensure deployment can be accelerated. This was followed by roundtable introductions. 


    2. Terms of Reference 

    Scottish Government officials had drafted the group’s Terms of Reference in their role as secretariat. The group discussed each section of the terms of reference to seek agreement and suggested amendments to be made by officials.

    3. Background

    A point was raised that the wording in the background section could suggest there was a focus on heat pump deployment in off-gas grid rural areas. It was agreed the wording should be changed to make it clear that heat pumps are an important solution across Scotland’s housing stock and buildings. 

    The group highlighted that the background should acknowledge work already being done in this area by other actors, including the UK Government, and build on this wherever possible. There should also be reference to the importance of the electricity networks within heat pump deployment. 

    Action: Officials to update background section of ToR accordingly. 


    4. Remit of the group 


    The group discussed how the need to prioritise recommendations which are within the powers of the Scottish Government’s legislative powers whilst considering which actions can be taken at UK Government level.  

    It was agreed that the wording on the second bullet under the remit of the group should be amended to include the wider stakeholders working outside the heat pump industry who are important to consider. 

    Action: Officials to include reference to wider stakeholders alongside heat pump industry. 


    5. Objectives

    The group ran through the objectives of the group which are broken down into the following topics: Deployment; People; Innovation and Demonstration; Place and; Consumers. 

    Deployment 

    One point in this section asks the group to consider the costs and challenges of integrating heat pumps into electricity networks. However, the group discussed the need for this to reflect that heat pumps can also be beneficial to networks if consumers are encouraged to use them at off-peak times. 

    Action: Officials to amend point on networks to include benefits as well as costs and challenges.

    There was a question whether the heat pump sector deal would focus solely on deployment within housing stock. Officials stated that deployment of heat pumps to non-domestic heat users should also be considered and the wording of the ToR will be amended to reflect this. 

    Action: Amend ToR to reference the need for deployment across domestic and non-domestic users and over different scales of heat pump installation. Action: Officials to consider how a framework for market segmentation can be considered for future discussions.

    There was a discussion around the non-financial barriers to heat pump deployment, with local authority planning rules cited as a common issue which often prevented the installation of heat pumps. Another frequent problem comes from a lack of understanding of who is responsible for upgrading grid infrastructure required from large heat pump projects. 

    Action: Officials to include a point in the bullet list on non-financial barriers to heat pump deployment


    People 

    It was agreed the wording should be broadened in this section to capture that the whole heat pump supply chain, including manufacturing, will need to increase its capacity of skilled workers rather than just installer capacity. It should also reflect the workers needed to support not only deployment but subsequent maintenance too. 

    Action: Officials to amend wording to emphasise the need to increase capacity across the whole heat pump supply chain and the maintenance of installed heat pumps.


    Innovation and demonstration 

    The group laid out some key ideas for innovation and demonstration that will be discussed during the future in-depth meeting on this topic (scheduled for November). Suggestions were raised around innovation within the integration of wider systems (including the use of smart switching when the grid is running on excess), the applicability of heat pumps in terms of housing suitability, ease of use for consumers (especially within RSLs) as well as technical improvements to heat pumps themselves, for example to reduce noise. 

    Action: Officials to amend objectives to reflect that there are innovation challenges across a range of areas and that beyond technical improvements to heat pumps themselves, there are areas like new tariffs or financial solutions which also could be seen as innovative.
     
    Action: Members to contact officials with any input for the innovation and demonstration briefing material ahead of the next meeting. 

    It was raised that there is a current tendency to focus too much on early stage innovation and testing, and not enough on demonstrating technologies at scales which are relevant to required deployment levels. The group discussed whether there should be more testing and development of innovation within ‘in market’ conditions. 

    Regarding the use of innovation to reduce costs, the group agreed that this should not only consider reducing initial capital costs of installation but also reducing the running costs by improving efficiency and improving reliability.  


    Place 

    The group agreed the wording in this section should be amended as it suggests there will be a specific focus on deployment within off-gas grid areas.

    Action: Officials to amend wording to make it clear there is not a focus on rural areas and to consider a framework for ‘Place’ within the heat pump sector deal. 


    Consumers 

    There was a discussion on the definition of ‘consumers’. It was pointed out that it is important to consider the needs of commercial and public sector heat pump users. However, the group decided to maintain focus on domestic consumers for this section of the ToR.

    A point was raised that any recommendations from the group around introducing attractive tariffs for heat pump users may be of limited effectiveness due to the dependence on Ofgem in this area. It was agreed that this could still be considered within recommendations for UK Government. 

    The group agreed with the point in the ToR that industry and utilities need to work together.  However, this should be expanded to cover other stakeholders who operate outside of this but are essential to progress around tariffs.  

    Action: Officials to amend to include reference to stakeholders as well as industry and utilities. 


    6. Forward programme 


    There was a suggestion that a parallel workshop should be held with energy suppliers to discuss their influence on heat pump deployment through tariffs and consumers. However, the point was made that this may have limited value because utility companies have not been particularly active in developing initiatives to support heat pump deployment due to the current lack of profitability in this area.  

    Although officials welcomed the forming of informal sub-groups and workshops amongst members to support the Expert Advisory Group, it was noted that Scottish Government does not have capacity to support these as secretariat. 
     

Items and actions

Welcome and Introductions 

The Chair made introductions to the Expert Advisory Group, emphasising the importance of the need for different stakeholders related to the heat pump sector to work together to ensure deployment can be accelerated. This was followed by roundtable introductions. 

Terms of reference 

Scottish Government officials had drafted the group’s Terms of Reference in their role as secretariat. The group discussed each section of the terms of reference to seek agreement and suggested amendments to be made by officials.

Background

A point was raised that the wording in the background section could suggest there was a focus on heat pump deployment in off-gas grid rural areas. It was agreed the wording should be changed to make it clear that heat pumps are an important solution across Scotland’s housing stock and buildings. 

The group highlighted that the background should acknowledge work already being done in this area by other actors, including the UK Government, and build on this wherever possible. There should also be reference to the importance of the electricity networks within heat pump deployment. 

Action:

  • officials to update background section of ToR accordingly

Remit of the group 

The group discussed how the need to prioritise recommendations which are within the powers of the Scottish Government’s legislative powers whilst considering which actions can be taken at UK Government level.  

It was agreed that the wording on the second bullet under the remit of the group should be amended to include the wider stakeholders working outside the heat pump industry who are important to consider. 

Action:

  • officials to include reference to wider stakeholders alongside heat pump industry

Objectives

The group ran through the objectives of the group which are broken down into the following topics: Deployment; People; Innovation and Demonstration; Place and; Consumers. 

Deployment 

One point in this section asks the group to consider the costs and challenges of integrating heat pumps into electricity networks. However, the group discussed the need for this to reflect that heat pumps can also be beneficial to networks if consumers are encouraged to use them at off-peak times. 

Action:

  • officials to amend point on networks to include benefits as well as costs and challenges

There was a question whether the heat pump sector deal would focus solely on deployment within housing stock. Officials stated that deployment of heat pumps to non-domestic heat users should also be considered and the wording of the ToR will be amended to reflect this. 

Action:

  • amend ToR to reference the need for deployment across domestic and non-domestic users and over different scales of heat pump installation
  • officials to consider how a framework for market segmentation can be considered for future discussions

There was a discussion around the non-financial barriers to heat pump deployment, with local authority planning rules cited as a common issue which often prevented the installation of heat pumps. Another frequent problem comes from a lack of understanding of who is responsible for upgrading grid infrastructure required from large heat pump projects. 

Action:

  • officials to include a point in the bullet list on non-financial barriers to heat pump deployment

People 

It was agreed the wording should be broadened in this section to capture that the whole heat pump supply chain, including manufacturing, will need to increase its capacity of skilled workers rather than just installer capacity. It should also reflect the workers needed to support not only deployment but subsequent maintenance too. 

Action:

  • officials to amend wording to emphasise the need to increase capacity across the whole heat pump supply chain and the maintenance of installed heat pumps

Innovation and demonstration 

The group laid out some key ideas for innovation and demonstration that will be discussed during the future in-depth meeting on this topic (scheduled for November). Suggestions were raised around innovation within the integration of wider systems (including the use of smart switching when the grid is running on excess), the applicability of heat pumps in terms of housing suitability, ease of use for consumers (especially within RSLs) as well as technical improvements to heat pumps themselves, for example to reduce noise. 

Action:

  • officials to amend objectives to reflect that there are innovation challenges across a range of areas and that beyond technical improvements to heat pumps themselves, there are areas like new tariffs or financial solutions which also could be seen as innovative 
  • members to contact officials with any input for the innovation and demonstration briefing material ahead of the next meeting

It was raised that there is a current tendency to focus too much on early stage innovation and testing, and not enough on demonstrating technologies at scales which are relevant to required deployment levels. The group discussed whether there should be more testing and development of innovation within ‘in market’ conditions. 

Regarding the use of innovation to reduce costs, the group agreed that this should not only consider reducing initial capital costs of installation but also reducing the running costs by improving efficiency and improving reliability.  

Place 

The group agreed the wording in this section should be amended as it suggests there will be a specific focus on deployment within off-gas grid areas.

Action:

  • officials to amend wording to make it clear there is not a focus on rural areas and to consider a framework for ‘Place’ within the heat pump sector deal

Consumers 

There was a discussion on the definition of ‘consumers’. It was pointed out that it is important to consider the needs of commercial and public sector heat pump users. However, the group decided to maintain focus on domestic consumers for this section of the ToR.

A point was raised that any recommendations from the group around introducing attractive tariffs for heat pump users may be of limited effectiveness due to the dependence on Ofgem in this area. It was agreed that this could still be considered within recommendations for UK Government. 

The group agreed with the point in the ToR that industry and utilities need to work together.  However, this should be expanded to cover other stakeholders who operate outside of this but are essential to progress around tariffs.  

Action:

  • officials to amend to include reference to stakeholders as well as industry and utilities

Forward programme 

There was a suggestion that a parallel workshop should be held with energy suppliers to discuss their influence on heat pump deployment through tariffs and consumers. However, the point was made that this may have limited value because utility companies have not been particularly active in developing initiatives to support heat pump deployment due to the current lack of profitability in this area.  

Although officials welcomed the forming of informal sub-groups and workshops amongst members to support the Expert Advisory Group, it was noted that Scottish Government does not have capacity to support these as secretariat.