Heat and energy efficiency strategies: consultation analysis

5. Cross-cutting themes

There were a number of points that recurred across most respondent groups and at many sections of the consultation. These are summarised below:

5.1. Consumers

5.1.1 Themes specifically relating to consumers included the need:

• For consumer protection.
• To ensure a focus on reducing fuel poverty.
• To ensure affordable warmth.
• To ensure security of supply.
• To raise awareness and engagement.
• To ensure service standards; and
• To change cultural expectations of consumer choice and create awareness of the benefits of district heating as an energy option.

5.2. Environmental factors

5.2.1 Acknowledgement that the LHEES, coupled with both local authority level leadership and national, strategic direction and leadership, can be a driver for raising awareness of, as well as tackling, energy use and heat waste.

5.2.2. Environmental issues need to be prioritised in plans and proposals for LHEES and these should include:

• Decarbonisation of heat.
• Reducing energy use.
• Reducing heat waste.
• Meeting targets on climate change.
• Ensuring the quality of local air / reducing local air pollution; and
• Promoting and delivering energy efficiency.

5.3. Local authorities

5.3.1 The need for support for local authorities included the following:

• Financial support.
• Support to develop in-house skills or to procure consultancy services.
• Capacity building.
• Technical resources and skills.
• Support with contractual issues.
• Support with any legal challenges or other legal issues.
• Provision of, or support in collecting, information and data.
• Strategic direction.
• Consistent advice provided to all local authorities; and
• Guidance and support from the Scottish Government or another national body.

5.4. National oversight

5.4.1 The suggestion that there should be some form of oversight from a national body; either a Scottish Government Department or Agency or an independent body, recurred throughout the consultation.

5.4.2. Local delivery, reflecting local conditions, was seen as key to successful implementation. However, the need for clear national guidelines and support providing a cohesive, consistent approach will be necessary both to attract investment and to provide reassurance to consumers.

5.4.3. In addition, national input could reduce the resource implications for local authorities.

5.4.4. Suggestions for a national agency or other form of national oversight were noted in relation to the following areas:

• Provision of guidance, advice or templates.
• Setting and implementing national standards. Working in partnership with local authorities to ensure local targets are in line with national targets and priorities or to oversee targets; both for LHEES and overall SEEP targets.
• Provision of regulatory oversight and scrutiny to ensure the long term interests of both consumers and network operators.
• Overseeing consumer protection, including service provision and complaint resolution.
• Raising awareness among consumers; trusted or independent sources of information will be required.
• Issuing and enforcing concessions; as this needs multiple expert resources across Scotland, a national unit could provide specialist skills and would offer economies of scale. A national framework for issuing concessions would provide consistency.
• Checking for consistency of concession design.
• A Scottish Government backed national energy company could take over failing concessions or post-concession.
• Collecting and providing data or providing support to collect data.
• National benchmarking of heat supply pricing compared to alternative supply options; or conducting annual tariff reviews.
• Issuing licences, again to ensure consistency and also that technical standards are met.
• Provision of analytical skills, resources and techniques; this will be cost effective and ensure consistency.

5.5. Developers and Investors

5.5.1. Risk reduction is a key factor that will promote confidence and attract investment in district heating infrastructure. Heat revenues being de-risked to the level of current utilities should lead to lower costs.

5.5.2. Financial viability will need to be demonstrated and there are a number of factors that could impact on this, including:

• Ensuring regulation does not stifle financial viability.
• Providing certainty in relation to anchor loads.
• The design of concessions, including size and concession length; and
• The use of zoning based on heat sources or areas of demand to ensure developments are in the right locations.

5.6. Business and Industry

5.6.1. Early engagement and discussion with existing industries should include promotion of the benefits of district heating schemes to the community and environment. It should also demonstrate the value of their own involvement such as increasing their environmental credentials, helping them to meet targets, or providing an additional income stream.

5.6.2. It should be recognised that not all businesses will be able to provide an uninterrupted supply of heat waste, or heat waste of a suitable quality.

5.6.3. Along with encouragement, appropriate incentives could be offered. For example: a reduction in CO ₂ tax; off-setting the cost of connecting; or business rate reductions.

5.6.4. Powers to compel industry should be used as a last resort. At all of the questions where some form of requirement or compulsion was proposed there was a preference for persuasion.

5.7. Other issues

5.7.1. Some suggestions that district heating networks should be owned and operated by a not-for-profit organisation, rather than private businesses who may prioritise profit over other considerations.

5.7.2. A need for the Scottish Government to learn lessons from elsewhere in the UK or other countries such as Denmark, where district heating has been introduced.