Chamber and committees

I would encourage the member and others in the committee, if they have not yet taken the chance, to visit some of the heat networks that are already in operation, including some that are being expanded or redeveloped.

In essence, the networks are made up of highly insulated pipes that go under the ground and come from a central heat source. They might involve the deliberate generation of heat for the network, or they might use a waste heat source. At the moment, we are letting valuable warmth from some waste heat sources go to waste, and heat networks can bring that heat to the consumer.

With heat networks, individual businesses or households would not need to have their own boilers, except, potentially, as an emergency back-up. They might choose to have something in reserve, but their main heating needs—and, in some circumstances, cooling needs—would be met via the network.

That is correct. That is what generates a revenue stream for the network, which is what makes it an attractive proposition for investors. The experience with heat networks in this country—and, I think, in Denmark, where they are used the most extensively of any European country—is that they tend to be affordable and attractive for that reason, compared with individual consumption of gas or other fuels.

Heat networks are particularly viable and effective when they have a range of different heat consumers—not all domestic but some commercial, some industrial, and large public buildings, for example—and a range of heat sources. Some networks will have a heavy reliance on a single heat source or small number of heat sources. Existing networks will be under a duty to bring forward a plan to decarbonise if they have a polluting heat source.

However, over time, as we see the extensive development of heat networks, we are likely to see that viability become an incentive for any operator to diversify its heat sources. That might be by using banks of heat pumps. In the Glasgow area, it might be using the River Clyde as a heat source, as Queen’s Quay does. It could also include industrial sources of heat, such as waste heat and other options. The diversification of heat producers and heat consumers is one of the things that will make the networks more viable for the long term.

We believe that it is.

Sorry, I did not catch that.

It will come from a range of sources.

Local authorities will produce their LHEES and provide them to Government. I think that they are all to be provided to the committee as well. They will be made public.

Those are the existing targets under the act. The 2035 target is for what happens beyond that.

As we set out in the consultation, the three proposed targets were based on not only the information from the first assessment report, which looked at where heat network zones will be, but a range of scenarios about the viability of heat networks—a high or low scenario might mean more or fewer heat networks respectively in those areas that have been found to be suitable—and assumptions about a connection rate of 50 per cent.

As we go forward, we will have to address some of the issues around demand assurance so that those developing and investing in heat networks have confidence that there will be consumers connecting to them. However, we made that connection rate assumption for the short period ahead, before the demand assurance measures are in place.

Therefore, from those three factors, we derived proposals for targets of 6TWh and 7TWh and the other stretch target of 12.5TWh. Although a case can be made for any of those targets, it was felt pretty clearly that the target of 7TWh was stretching in terms of achieving significant growth in the sector but also achievable.

It will depend on the specific settings in each area. That is why LHEES are being taken forward at the local level.

If the committee has not had the chance to learn about the heat network in Shetland, for example, I think that that would be instructive. It has been in operation for 25 years, and the company is now looking to expand and extend it, including to potential customers who are not right in the town centre.

There are some energy losses that come from extensive heat networks, but the experience of Denmark is that you can have them over a very wide area, and they do not just have value in the inner core of a city, so we would like to ensure that as many parts of Scotland as can benefit from heat networks do so.

Of course, in less densely populated areas, other approaches to decarbonisation—including individual heat pumps and other technologies—will be, and already are, extremely successful.