Chamber and committees

The Heat Networks (Scotland) Act 2021 has set out ambitious targets for heat network deployment, requiring 2.6 terawatt hours of output by 2027 and 6 terawatt hours by 2030.

To help meet these targets, the Scottish Government will invest £400 million over the next five years in large-scale heat decarbonisation infrastructure through the successor scheme to the Low Carbon Infrastructure Transition Programme (LCITP). However, we cannot rely on public investment alone to fund the development of low carbon heat networks in Scotland and government support must be used to leverage private investment into heat networks if the targets are to be met. The LCITP provided grants for up to 50% of project capital costs with the remainder being match funded and the successor programme is likely to take a similar approach. Financial mechanisms such as the Green Growth Accelerator will also be key in stimulating investment.

The regulatory system laid out within the Heat Networks (Scotland) Act will play an important role in boosting confidence in the sector and providing greater certainty for investors. For example, the Act provides for the award of Heat Network Permits which will provide investors greater assurance over the potential customer base available, helping lower investment cost.

Detail on how we will meet the ambitious heat network targets will be provided in the Heat Networks Delivery Plan, which we will publish for consultation in due course.

The Scottish Government is considering a number of options as solutions to replacing gas boilers and recognise that that, for a small number of buildings, bioenergy and in particular bio heating oil, bioLPG and biomass may prove to be the only practicable option for heat decarbonisation. However, it is likely that these properties will be in off gas grid areas.

Heat pumps and Heat Networks are widely used in other European countries and have been identified as near term priorities for replacing gas boilers in Scotland as set out in our recently published Heat in Buildings Strategy.

Regarding support for heat pumps, I refer the member to the answer to question S6W-02397 on 9 September 2021. All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/written-questions-and-answers

Heat networks are also a key strategic zero emissions heat technology. The Competition and Markets Authority found that up to 90% of heat network customers enjoy similar, or lower, bills than those with standard gas boilers and heat networks can cut both emissions and bills.

Hydrotreated Vegetable Oil (HVO) fuel, like other bio fuels, is dependent on there being a sustainable supply of feedstock, and there remain concerns about lifecycle emissions. Further research is therefore required before Scottish Government could commit to any particular bio fuel. Scottish Government’s aim is to see bioenergy used where it has the greatest value in reducing emissions. However this decision is also dependent on lifecycle emissions and which sectors will make the best use of the bioenergy feedstocks. Emerging technologies and the push to decarbonise across the economy may also create new demands on these finite resources.

We intend to publish a Bioenergy Action Plan in 2023 which will set out a strategic framework for how the available biomass resources and technologies can be used to best effect.

The Scottish Government commissioned a review to synthesise evidence on the operation of heat pumps with relevance to Scotland. The report is available at https://www.climatexchange.org.uk/research/projects/heat-pump-use-in-scotland-an-evidence-review/

As the report sets out, the temperature output from a heat pump or boiler is different from the temperature rooms are heated to: heat emitters, such as radiators, transfer heat into rooms by being heated to a higher temperature than the air in the room. While the output temperature of a heat pump is often lower than temperatures boilers commonly produce, when appropriately configured with building fabric and radiators or underfloor heating they efficiently bring indoor temperatures up to adequate levels. In addition, the report sets out evidence on less common high temperature heat pumps.

The microgeneration certification scheme (MCS) certifies heat pump installers to ensure that systems are appropriately designed to provide sufficient heat.

Alongside the development of the Heat in Buildings Strategy, the Scottish Government worked with stakeholders to undertake a series of impact assessments including a Fairer Scotland Duty (FSD) assessment and an Islands Communities Impact Assessment (ICIA) both of which consider remote and rural communities. We will publish these shortly and will take the findings into account as we deliver on the full range of actions set out in the Strategy.

The Home Energy Scotland loan scheme provides up to £15,000 for energy efficiency measures and up to £17,500 for renewables measures (maximum of two). Registered private landlords owning five or fewer properties will be eligible for interest free loans, and owners of six or more properties will be subject to interest at a rate of 3.5% APR. Homeowners are eligible for interest free loans as well as 75% cashback up to £7,500 for renewable heat measures, and an enhanced 40% cashback for energy efficiency measures up to £6,000. In 2022-23, we will replace current cashback arrangements with a grant scheme.

In addition the Scottish Government’s fuel poverty schemes have adopted a “zero emissions first” approach. Warmer Homes Scotland enables eligible households to receive energy efficiency and heating improvements, including an increasing number of heat pumps. Our local authority-led Area Based Schemes provide energy efficiency improvements to households in or at risk of fuel poverty living in their own home or a private rented property, leveraging Energy Company Obligation (ECO) finance and private investment.

These schemes form part of our broader investment package. We have committed to invest at least £1.8 billion over the course of this parliament to kick-start market growth and support those least able to pay.

In addition we are working to develop an appropriate market framework to help consumers overcome the upfront investment costs and to attract and secure further private investment and finance to help meet the costs of the transition. We will establish a Green Heat Finance Taskforce by the end of 2021 to recommend ways the Scottish Government and private sector can collaborate to scale up investment.

In the Heat in Buildings Strategy we committed to undertaking research to understand the extent to which the deployment of secondary technologies alongside zero emissions heating systems could help to optimise operational performance, minimise energy consumption and reduce end user fuel costs. This research is underway, and seeks to understand the technical feasibility and cost effectiveness of heat batteries, electric batteries, and thermal storage cylinders when installed alongside a range of zero emissions primary heating technologies; both independently of and in conjuncture with microgeneration technologies such as solar PV and solar thermal. We expect to publish this research in early 2022.

The Scottish Government estimates the cost of building-level measures to reach our emissions targets over the 24 year period to 2045 will be in the region of £33 billion. We have committed to investing at least £1.8 billion over the five year period of this parliament. This funding will help kick-start market growth while supporting those least able to pay.

As set out in the Heat in Buildings Strategy, we are working to develop an appropriate market framework to help consumers overcome the upfront investment costs and to attract and secure further private investment and finance to help meet the costs of the transition. We will establish a Green Heat Finance Taskforce by the end of 2021 to recommend ways the Scottish Government and private sector can collaborate to scale up investment. In addition we will explore other options, including the use of local tax powers, linking the mortgage market to energy performance and emissions, and options for new market mechanisms including potential obligations on market actors. Where action is needed in reserved areas we will work with the UK Government.

Heat in Buildings Strategy – https://www.gov.scot/publications/heat-buildings-strategy-achieving-net-zero-emissions-scotlands-buildings/

Full electrification of the line between Edinburgh Haymarket and Aberdeen is not an absolute prerequisite for achieving the decarbonisation of Scotland’s railway by 2035. As set out in the answer to question S6W-03041, however, it remains the expectation that the East Coast Main Line between Edinburgh Haymarket and Aberdeen will be fully electrified.

All answers to written Parliamentary Questions are available on the Parliament's website, the search facility for which can be found at https://www.parliament.scot/chamber-and-committees/written-questions-and-answers

The Heat Networks (Scotland) Act sets statutory heat network deployment targets, requiring 2.6 terawatt hours of output by 2027 and 6 terawatt hours by 2030. To help achieve this, we have committed to invest at least £400 million over this parliamentary session in large scale heat and energy efficiency projects, including zero carbon heat networks. Detail on how we will meet the ambitious heat network targets will be provided in the Heat Networks Delivery Plan, which we will publish for consultation in due course.

As outlined in our recently launched Heat in Buildings Strategy we will launch a Heat Network Pre-Capital Support Unit in 2021, expanding on the previous role of the Heat Network Partnership to provide enhanced support to public and private sector in developing a pipeline for delivery.

The Scottish Government has awarded £37 million of financial support to heat networks through the Low Carbon Infrastructure Transition Programme since its launch in 2015. The programme is now closed to new applications, with a successor scheme due to be launched by the end of 2021. This new scheme will have a focus on low carbon heat projects, including large-scale heat networks. As well as supporting new projects and network extensions, the scheme will look to provide assistance to improve the efficiency of current heat networks and convert those powered by fossil fuels to low carbon options.

Hydrogen policy officials are currently working on the development of the Hydrogen Action Plan. The five year Hydrogen Action Plan will be published shortly and will set out the actions that the Scottish Government will take to support Scottish supply chain activity and drive the development of a low-cost hydrogen capability to meet that 5GW ambition by 2030.

The Scottish Government’s upcoming Hydrogen Action Plan will be supported by a five year £100m programme of investment to help develop the hydrogen economy in Scotland.