Heat in Buildings Bill consultation: island communities impact assessment

3. Island needs or potential impacts for island communities

3.1 The proposals included in this consultation cover homes and buildings across Scotland. They are not only aimed at island communities, and will affect every property owner in Scotland. However, we know that our island communities can face unique challenges, and opportunities, around distance, geography, connectivity and demography.

3.2 Our island communities are not connected to the mains gas network. Islands can be connected at the periphery of electricity networks, whilst a small number of our island communities are also not connected to electricity grids and face unique challenges in their efforts to reduce emissions.

3.3 The potential for reduced supply chain availability, added transport requirements, limited accommodation for contractors and potential weather disruptions means that clean heating measures can cost more to install in our rural and island communities.

3.4 The National Islands Plan^[3] acknowledges that extreme fuel poverty rates are higher for most of the island authorities. We also know that extreme fuel poverty can be particularly difficult to eliminate in island communities where building types are harder to improve to the required energy efficiency standard and opportunities to reduce fuel costs are more limited. In addition, traditionally constructed buildings and energy efficiency challenges can vary between the islands. Such issues combined with the colder climate in the islands means that some of these homes might have the heating on throughout the whole year. Higher living costs on islands, combined with higher fuel costs, for households on low incomes, can create the conditions for extreme fuel poverty. The substantial increase in energy costs since August 2021 will likely have exacerbated these issues further.

Beneficial impacts

3.5 There are, importantly, key benefits that properly installed decarbonised heating systems can bring to island communities. Specifically, these span improved thermal comfort and health benefits and protection of the unique natural environment of Scotland's islands and rural communities through climate change mitigation

Moving Forward

3.6 As we take forward the development of the Heat in Buildings Bill we will ensure that the issues highlighted here are considered in the design of delivery programmes and development of further policy and regulation. A further ICIA will be undertaken for the Bill and findings from this consultation process will be fed in.

Step Two – Gather your data and identify your stakeholders

3.7 This impact assessment drew on recent statistics publications where relevant and a body of evidence gathered 2021 for the ICIA for an earlier policy, the Heat in Buildings Strategy.

3.8 The proposals being consulted on for the Heat in Buildings Bill stem directly from this Strategy and as a result, the evidence gathered at that time remains relevant. Furthermore, as this evidence base was informed by a sustained process of engagement with energy consumers, including island residents and stakeholder organisations, the data gathering for the Heat in Buildings Strategy remains an invaluable resource in shedding light on the challenges and opportunities for island communities in regards to these policies.

Step 3 - Data Collection.

3.9 The evidence gathering process was undertaken over a number of steps for the Heat in Buildings Strategy and updated where appropriate to ensure applicability to the consultation on proposals for a Heat in Buildings Bill.

• Analysis of pre-existing data sources
• Early engagement with Highlands and Islands Enterprise
• A Public consultation on the Heat in Buildings Strategy consisting of:
  • Written responses to the consultation
  • Findings from stakeholder-facing workshops

3.10 To support this data, a further analysis of additional pre-existing resources was undertaken and engagement was undertaken with key stakeholders to ensure that this material remained relevant.

Summary of main impacts across data gathering and consultation

3.11 In summary, the key areas, identified through our data gathering and consultation, in which possible impacts on island communities may arise include:

• Installation and operational costs for heating systems
• Higher living costs, heating costs and high levels of fuel poverty:
  • Rural and island households spend statistically significantly more on heating than their urban equivalents.
  • Fuel poverty levels are higher in rural small towns than in urban areas. One reason for this is that the majority of urban dwellings are within the coverage of the gas grid, whereas almost two-thirds of those in rural areas are not. Connection to the gas grid allows households to use mains gas for heating and hot water. As mains gas is currently the cheapest of the major commercial fuels, gas grid access can be a significant determinant in the required cost of heating a home to a satisfactory temperature. The majority of households using electricity in Scotland, whether in urban or rural settings, currently rely on traditional emitters such as storage heaters.
• Availability of appropriate finance and funding which takes account of these challenges.
• Ability of traditionally constructed buildings to accommodate standard energy efficiency measures
  • Islands and rural communities generally have a relatively larger share of stone walled, detached dwellings of a traditional build form. Maintaining an adequate indoor temperature in these type of properties can be challenging and costly due to the rate of heat loss through large, uninsulated external walls.
  • Island and rural local authorities generally had the highest proportion of the least energy efficient dwellings (those rated EPC F or G) on average over 2017-19 (SAP 2012, RdSAP v9.92). Island and rural local authorities tended to have lower than average proportions of B or C rated dwellings with Shetland Islands (8%), Na h-Eileanan Siar (9%) and Orkney Islands (15%) having the lowest.
• Availability of the supply chain for installation, concerns over applicability of PAS 2035, availability of maintenance with reports of long times for maintenance where no local contractors are available.
  • Island and rural communities can face supply and access issues. The flow of goods and services may be restricted or impacted, sometimes at short notice. Further, the smaller population of these locations may mean a reduced local skills based, placing greater demand on qualified work such as the installation of clean heating systems. We also recognise the opportunities that employment in clean heating could present on islands, providing essential job opportunities.
• Longer project realisation times recognising constraints on accommodation for incoming workers as well as weather and travel disruption to rural areas.
• Infrastructure and resilience:
  • Our islands face particular challenges around distance, topography, weather and connectivity. These can lead to infrastructural and logistical challenges and costs (such as in regards to electric grid connectivity and access to harder-to-reach locations) not encountered by other communities, and require additional support to ensure ongoing resilience.
  • Resilience of electrified heat systems in areas with no national electricity grid connection was raised
  • Potential for more less connected areas to have higher incidences of single phase electricity distribution network which may impact technology selection.
  • Concern over resilience level of areas that are reliant on one fuel for heating – where there has been traditionally a mix of fuels available.
• Ongoing community representation and engagement was considered a key requirement to develop trust and buy in.
  • Our island communities are unique and face challenges specific to their location. To address specific contextual island issues continuing engagement and reflection is required. Ongoing appropriate representation and engagement is central to ensuring our transition to net zero supports and benefits islands communities by providing a dialogue to shape and direct delivery.

Step Four – Assessment

3.12 The above evidence gathering and consultation constituted a screening exercise to identify if an Island Communities Impact Assessment would be required. As it remains the case that that are a number of unique impacts, potential barriers, and wider impacts which would have a direct effect on Island Communities, it was therefore decided that a full Island Communities Impact Assessment should be undertaken. This is in draft as we gather views, and will be finalised prior to the drafting of the Bill, and introducing it to Parliament.

3.13 The following section assesses the extent to which the proposals for the Heat in Buildings Bill can be delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from them.