Heat networks target 2035 consultation: SG response

Overview of Responses and Key Themes

A total of 28 responses were received. Of these, 23 were from groups or organisations and 5 were from individuals.

Overall, most respondents indicated that they supported the Scottish Government setting a 2035 target for the combined supply of thermal energy supplied from heat networks. Those that did not, felt it was too early to set a meaningful target at this stage.

Level of Ambition

There was general support for an overall "at least 7 TWh" national target for Scotland (7 TWh is equivalent to 9 percent of current non-electrical heat consumption). Arguments in agreement with the level of the proposed target included it being a good balance between providing the ambition to be a strong facilitator whist remaining attainable or credible. However, several respondents also felt the target was not ambitious enough and others felt the target was too ambitious.

Relative Target

Multiple Local Authorities and a Professional/Representative Body suggested that it is more appropriate to set the target as a percentage of heat demand (9%), rather than as an absolute figure for heat supplied (7 TWh). The primary reason given by respondents for this view was a concern that there may be a greater reduction in heat demand than predicted as a result of energy efficiency regulations and improvements. Respondents set out that the consequence of this would be that 7 TWh would represent more than 9% of total demand and, therefore, would be a less feasible target to achieve.

Regional Targets

There was a lot of discussion around how the target translates to local authority targets. A number of local authorities noted that 7 TWh, or 9% equates to a high target within their area if equally applied to each local authority, and it should be clear that the national target doesn't translate to 9% for each local authority. In particular, many respondents expressed the view that the opportunities for cost-effective heat networks are considerably greater in large urban areas with dense populations and industry to provide multiple potential anchor loads, than in rural areas with dispersed populations and little or no access to appropriate anchor loads.

It was, therefore, suggested that the expected contribution of each area to the national target should reflect the local context and the region's ability to support viable heat networks.

Local Heat and Energy Efficiency Strategies and Building Assessment Reports

Respondents noted the importance of ensuring that the target is reviewed once Local Heat and Energy Efficiency Strategies (LHEES) are completed and Building Assessment Reports (BARs) data and formal designation of heat network zones has been completed in line with the 2021 Act and associated regulations^[5}. There was the suggestion that given this work is ongoing, it is too early to set the 2035 target.

Infrastructure and Funding Challenges

A number of Local Authorities and Professional/Representative Bodies highlighted that the delivery of the target requires considerable scaling-up of heat network activity, which has significant resourcing and skills implications, particularly for local authorities.

Related to this point, many such organisations called for more resources to be made available to support the delivery of the target, identifying the availability of flexible government funding and investment as critical to achieving the target.

Whilst noting this need for more resourcing for heat networks, many respondents stressed that this must not be at the expense of funding for other heat and energy improvements and technologies, particularly the fabric first approach. It was generally argued that a fabric first approach should be taken regardless of whether heat network capacity increased.

A range of organisations also flagged the importance of maintaining the quality of heat networks as the roll-out is scaled up, and the need for a robust regulatory system ensuring safety and fairness for customers.

Climate change and fuel poverty

Several respondents flagged the importance of aligning heat network targets with the 2045 Net Zero target, and that addressing climate change should be the primary focus of the roll-out of heat networks.

Linked to this, respondents identified that the heat network target should explicitly reference a requirement for new heat networks to be powered using renewables or other low or zero emissions sources of heat, to ensure that future projects do not contribute to greenhouse gas emissions.

A key consideration in setting policy targets for heat networks is ensuring that doing so does not cause fuel poverty, or exacerbate existing fuel poverty for new heat network customers. To this end, this consultation asked respondents to reflect on whether there are any specific fuel poverty considerations that need to be addressed as new legislation is implemented.

A range of responses were received. Most respondents noted that fuel poverty is a multi-faceted challenge and, therefore, requires multiple solutions. In terms of fuel poverty, a focus on heat networks is not seen as important as ensuring a 'fabric first' approach is taken to building retrofit and build. Yet, while heat networks were not necessarily seen either as a solution to, or a cause of, fuel poverty, they were argued to be capable of both exacerbating and alleviating the problem.