Climate change monitoring report 2023

Climate Change Plan Monitoring Report 2023: Buildings

Part A - Overview of sector

The 2020 annual emissions envelope published in the CCPu for this sector was for 8.0 MtCO₂e, whereas the outturn emission statistics for 2020 (published in 2022) show a position of 8.7 MtCO₂e.^[4] These figures show that the sector was outside its envelope in 2020.

The CCPu sets out the following three policy outcomes for this sector, the indicators for which are summarised below:

The heat supply to our homes and non-domestic buildings is very substantially decarbonised, with high penetration rates of renewable and zero emissions heating	On Track	Off Track	Too Early to Say
Number of existing domestic properties using low and zero direct emissions heating (LZDEH) systems (1.1)			X
Services sector fossil fuel heat consumption (1.2)			X
% of non-electrical heat consumption met from renewable sources (1.3)			X

Our homes and buildings are highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high levels of fabric efficiency.	On< Track	Off Track	Too Early to Say
Energy intensity of residential buildings (MWh per household) (2.1)		X
Emissions intensity of non-domestic buildings (tCO2e per £ million Gross Value Added) (2.2)		X
% of homes with an EPC[5] (EER,[6] or equivalent) of at least C (2.3)			X
% new homes built with a calculated space heating demand of not more than 20 kWh/m2/year (2.4)	X

The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery.	On Track	Off Track	Too Early to Say
% of households in fuel poverty (3.1)			X

Just transition and cross economy impacts

We wish to understand and report on the broader just transition and cross-economy impacts of our emissions-reduction activities in addition to these sector specific policy outcomes and indicators. To do this, in this report we use data from the Office of National Statistics (ONS): Low Carbon Renewable Energy Economy (LCREE) publication. The LCREE data presented in this report is based on survey data of businesses which perform economic activities that deliver goods and services that are likely to help generate lower emissions of greenhouse gases, for example low carbon electricity, low emission vehicles and low carbon services.

The LCREE indicator is narrowly defined and, while useful within its limited scope, does not give us the full picture of the impacts on workforce, employers and communities and progress towards a just transition.

Over the next few years we will work to develop a more meaningful set of success outcomes and indicators aimed at tracking the impacts of our policies on a just transition to net zero.

Sector commentary on progress

The Scottish Government published its ambitious Heat in Buildings Strategy in October 2021, which set out our programme for delivering emissions reductions in the buildings sectors (Residential and Services) while ensuring a just transition and maximising the economic opportunities for Scotland.

The cost of living crisis and surges in energy costs have added to the challenge of decarbonising our building stock. However, these factors also underline the importance of moving to cleaner heating systems and improving energy efficiency, ending our reliance on fossil fuels and delivering enduring savings for homes and businesses.

The emissions reported above of 8.7 MtCO₂e for 2020 relate to the period one year prior to the publication of the Heat in Buildings Strategy.

In Part B below, we set out progress against indicators relating to specific outcomes of our heat decarbonisation programme. Five of our eight indicators are marked as “Too Early to Say.” This is largely due to a lack of access to up-to-date outturn statistics for some of the indicators. For Indicators 1.1 and 2.3, this is as a result of them using the Scottish House Condition Survey (SHCS) as their input, for which fieldwork had been adversely affected by the COVID-19 pandemic. As such, outturn data for these two indicators are still from 2019. /Indicator 3.1 is also based on Scottish House Condition Survey data, but we have estimated current outturn data using scenario modelling until more up-to-date data are available. The Scottish House Condition Survey is a nationally representative survey of Scottish households, and represents a key source of information on primary heating fuel, energy performance, and energy demand across the domestic building stock. Due to the suspension of face-to-face interviewing in March 2020, no data for 2020 was collected. Data for 2021 is due to be published shortly after this report, however given the adoption of an external-only approach results will not comparable with previous years. For Indicator 1.2, we use the most recently available data from DESNZ.

To comply with existing statutory requirements, our Heat in Buildings Strategy set out a provisional target (22%) for the proportion of non-electrical heat demand in buildings supplied by renewable sources (either directly, or via a heat network). The Renewable Heat Target (RHT), as currently defined, is an important factor in monitoring Scotland’s wider 2030 renewable ambitions. However, we believe that the current RHT alone is insufficient to measure progress towards our Heat in Buildings ambitions. These are to displace Direct Emissions Heating with Zero Direct Emissions Heating, which could include, but not be restricted to, non-renewable sources. As part of the development of the ESJTP, we are therefore considering alternative approaches to measure our progress. As such, we consider this indicator to be “Too Early to Say”.

The CCP: Monitoring Report 2022 saw Indicators 2.1 and 2.2 rated as being “On Track.” They are now “Off Track.”

The only indicator of the eight marked as “On Track” this year is Indicator 2.4, on the grounds that it has increased in percentage-point terms from 7.51% in 2020 to 7.7% in 2021.

This year, we will publish a Monitoring and Evaluation Framework for our Heat in Buildings strategy, which will provide further detail on how we are monitoring progress. In October 2023, we will also publish a progress report update on the Heat in Buildings Strategy, as required under the Climate Change (Scotland) Act 2009 (here is last year’s progress report: Progress - Heat in Buildings Strategy: 2022 update - gov.scot (www.gov.scot)).

Developments in monitoring arrangements since last report

Since the publication of the CCP: Monitoring Report 2022, the Climate Change Committee (CCC) has provided written feedback suggesting improvements to the monitoring arrangements of reducing emissions in the Buildings sector. We have taken this feedback into account when updating and developing our indicators for this year’s publication.

Given the constraints of devolution and the Scottish Government’s view that hydrogen will not play a central role in the overall decarbonisation of domestic heat, the previous outcome 3^[7] has been removed.

Part B - Progress to Policy Outcome Indicators

Policy Outcome: Cross-sectoral social and economic

Indicator: FTE employment in Low Carbon Renewable Energy Economy Indicator

On-Track Assessment (Milestones/Targets): Year-to-year change

Most Recent Data: 2021

Data Source(s): Office of National Statistics: Low Carbon Renewable Energy Economy (LCREE), Time spent of Green Tasks

Assessment: Too early to say

Commentary:

In 2021, the Scottish low carbon renewable energy (LCREE) sectors were estimated to provide 28,300 jobs, the highest in the published data.

• The estimates of LCREE are based on a relatively small sample of businesses and hence are subject to a wide confidence interval. Scottish LCREE employment in 2021 is substantially higher than previous years but the difference Is not statistically higher than 2020.

• LCREE only shows employment in roles in Industries directly involved in the transition to Net Zero.
• The ONS also released experimental statistics on a wider perspective of
• green activity in the economy with their time spent on green tasks release.
• These stats reflect green activities in both LCREE and non-LCREE sectors. The 2023 publication has not yet been published.
• Last year’s publication showed that in 2019 Scotland achieved an all-time high of hours spent on green tasks and proportion of workers doing green tasks, including workers who spend more than 20% of their time on green tasks.
• The proportion of workers doing green tasks in Scotland was 36% in 2019, up from 23.8% in 2004. Workers who have spent more than 20% of their time doing green tasks was 14%, up from 9% in 2004.
• The proportion of overall hours spend doing green tasks in Scotland was 7%, up from 4.9% in 2004.

Policy Outcome: 1

Indicator: Number of existing domestic properties using low and zero direct emissions heating (LZDEH) systems.

On-track Assessment (Milestones/Targets): At least 1.5 million by 2030

Most recent data: 312,000 domestic properties use low and zero direct emissions heating (LZDEH) systems as of 2019.

Data source(s): Scottish House Condition Survey (SHCS): 2019 Key Findings, Table 5. Comprises households for which their primary heating fuel is (a) Electricity, (b) Communal Heating, or (c) Biomass.

The latest available data is for 2019 as, due to the COVID-19 pandemic, fieldwork for the 2020 SHCS was suspended in March 2020 and was not resumed. The methodology used in the 2021 SHCS was also impacted by the pandemic, with findings due to be published shortly after this report.

Assessment: Too early to say.

Commentary: In 2019, there were 312,000 domestic properties using low or zero direct greenhouse gas emissions heating systems. These were properties with either electricity, biomass or communal heating as their primary heating fuel.

The baseline year for this indicator is 2019. As no more recent data is available, it is not possible to assess progress towards the target of at least 1.5 million households using LZDEH systems by 2030.

Since 2019 we have continued to support the uptake of more climate friendly heating systems in Scotland through our broad range of delivery schemes. For example:

• We introduced a grant in December 2022 to replace the cashback element of Home Energy Scotland Loans to support energy efficiency and zero emission heating.
• We doubled our funding for the Home Energy Scotland Grant and Loan Scheme in 2022-23 and the full allocation was taken up.
• Our Warmer Homes Scotland scheme made its highest ever level of investment in 2022-23 (£42m).

While the SHCS is the best data source to monitor this target, other data sources such as the Microgeneration Certification Scheme (MCS) suggest that we are continuing to see increases in the uptake of renewable heating sources / LZDEH systems. Recent renewable heat monitoring through MCS has shown a 42% increase in domestic renewable heat installations between 2019 and 2022. This comes with the following caveats:

• MCS certification is not a mandatory requirement, so MCS data does not capture all small-scale renewable energy installations in Scotland. However, as MCS is often a route to government incentives, it is likely to represent a significant proportion of deployment.
• Most installations registered with MCS are in the retrofit market. However, MCS may capture some new-build installations if contractors have chosen to register their installations with MCS.
• Renewable heat monitoring likely underestimates installations in 2022 as a full calendar year of MCS data was not available.

Policy Outcome: 1

Indicator: Commercial^[8] sector fossil fuel heat consumption

On-track Assessment (Milestones/Targets): To reduce to 5,000 GWh or less by 2030

Most recent data: Commercial sector fossil fuel heat consumption was 11,170 GWh in 2020.

Data source(s): Scottish Energy Statistics Hub (SESH) > Energy Efficiency > Heat Consumption > Data – Non-electrical heat demand by sector (GWh). Internal analysis was conducted to remove Bioenergy & Wastes from the figure of 12,998 GWh presented on SESH.

Assessment: Too early to say. The Heat in Buildings Monitoring and Evaluation Framework, due to be published this year, will include an assessment of progress in reducing emissions from space heating in non-domestic buildings.

Commentary: In 2020, commercial sector fossil fuel heat consumption was 11,170 GWh.^[9] This includes consumption of coal, manufactured fuels, petroleum products, and gas. This is almost a 2% increase on 2019, when commercial sector fossil fuel heat consumption was 10,983 GWh.

Policy Outcome: 1

Indicator: % of non-electrical heat consumption met from renewable sources

On-track Assessment (Milestones/Targets): The target is under review as part of the ESJTP, see commentary below.

Most recent data: 1st of May publication

Data source(s): Renewable Heat Dataset from Energy Saving Trust

Assessment: Too early to say

Commentary:

In order to comply with existing statutory requirements, our Heat in Buildings Strategy set out a provisional target (22%) for the proportion of non-electrical heat demand in buildings supplied by renewable sources (either directly, or via a heat network). The Renewable Heat Target (RHT), as currently defined, is an important factor in monitoring Scotland’s wider 2030 renewable ambitions.

As set out in the Heat in Buildings Strategy, the scope of the reporting against this target differs from the previous reporting by not including industrial heat. These statistics (that exclude industrial heat) are part of a new time series, available on the Energy Statistics Hub^[10]. When describing non-industrial, non-electrical heat, we report on both an upper and lower estimate. This is because it is not always possible to determine whether or not heat is used for industrial purposes.

In 2021 the percentage of non-electrical, non-industrial heat demand met by renewable sources is estimated at between 3.2% and 7.1%. Between 1.4 and 3.2 TWh of renewable heat output was produced in 2021, when demand for non-electrical, non-industrial heat was estimated at 45.4 TWh.

Renewable heat output in 2021 was between 13% and 18% higher than the previous year, while estimated demand was 3% lower. These estimates demonstrate a continued rise in renewable heat output over the longer term. Since 2016, the output of renewable heat has increased by between 87%-103%. While demand for non-electrical heat is slightly higher now than in 2016 (by 1%), this has fallen in recent years and is the lowest it has been since 2016.

Estimates of renewable heat output continued to increase in 2022 to between 1.6 and 3.4 TWh in 2022. We are not able to provide 2022 data in percentage terms since consumption estimates for 2022 will not be available until released by DESNZ in September 2023. In Figure 1, we have included a time series for these minimum and maximum estimates for the percentage of non-electrical, non-industrial heat demand since 2012, alongside historic data for non-electrical heat, including industrial heat until 2020.

For both renewable heat statistics, the headline percentage reported in 2021 is dependent on overall non-electrical heat demand. This continues to underline the importance for progress against this metric of improving the energy efficiency of Scotland’s buildings.

Renewable technologies:

Although we cannot separate all renewable heat used for industrial purposes from those used in other sectors, trends in renewable output that include industrial heat provide insight into the contribution of different technologies to renewable generation.

2021 showed significant growth in overall renewable heat output (including industrial heat), with a gain of 650 GWh. Most of this (374 GWh) came from biomass installations, with roughly 100 GWh of this coming from installations newly operational in 2021, and the rest from changes in operation at existing sites. However, the majority of biomass output gain was in the industrial sector, rather than in domestic or non-domestic sectors. This technology remains the largest share of output and capacity, which is likely due to biomass installations being typically larger and/or run for longer throughout the year.

Biomethane is the second largest contributor to total renewable heat output (16%).

Biomethane output increased by 152 GWh, with nearly all biomethane sites in operation in 2020 reporting an increase in output. This output gain is attributed to domestic, non-domestic and process heat according to the relative gas grid consumption of each sector. Heat pump output also increased by 122 GWh. Around 100 GWh of this was installations newly operational in 2021. As in previous years, heat pumps remain the technology with the most installations.

Heat pumps have shown a relatively steady growth between 2013 and 2019, and there is evidence of an increased growth rate in more recent years, with 3,205 new installations in 2020, 5,100 in 2021 and 3,446 for the first eight months of 2022. Heat pumps make up a relatively small share of overall output (11%) because they are mostly installed in domestic settings where capacities are likely to be small and usage throughout the year is low compared to other potential heat uses. A number of other technologies contribute to the output attributed to renewable heat sources, including biogas, bioliquid, solar thermal and waste combustion.

Methodology update:

We have made adjustments to the overall methodology we use to calculate the percentage of renewable heat compared to previous years^[11]. For example, we have implemented a stricter criteria for matching between datasets, which reduces possible double-counting of installations between data sources and reduces the estimated output values. Some source datasets were also replaced by alternative sources in order to improve the accuracy of estimates. These methodological changes result in a more conservative estimate of output, but otherwise follow the same trends over the time series. Comparing 2020 output estimates between the current and previous methods, and including industrial uses for comparison on a consistent basis, shows that the new method results in a value of 4,770 GWh, 5% less than under the previous methodology.

Future reporting

We will continue to report on renewable heat statistics against the provisional target as required by the Climate Change (Scotland) Act 2009. However, we believe that the current RHT alone is insufficient to measure progress towards our Heat in Buildings ambitions.

As part of the development of the ESJTP, we are therefore considering alternative approaches to measure our progress.

Statistics on all renewable heat, including industrial heat are available on the Energy Statistics Hub^[12].

Policy Outcome: 2

Indicator: Energy intensity of residential buildings (MWh per household)

On-track Assessment (Milestones/Targets): To fall by at least 30% by 2032 (relative to 2015).

Most recent data: Residential energy intensity was 17,393 kWh/household in 2020

Data source(s): Scottish Energy Statistics Hub (shinyapps.io), using input from:

DESNZ: Sub-national total final energy consumption data

DESNZ: Energy Consumption in the UK: end use

Scottish Government: Scottish Greenhouse Gas Emissions NRS: Estimates of Households and Dwellings in Scotland

Assessment: Off track

Commentary:

In 2020, average energy for a Scottish home was 17,393 kWh/household. This is an increase of 0.5% since 2015, and 2.25% on 2019. As suggested by the Digest of UK Energy Statistics (DUKES), this is likely driven by a rise in home working during 2020.

Policy Outcome: 2

Indicator: Emissions intensity of non-domestic buildings (tCO₂e per £ million Gross Value Added)

On-track Assessment (Milestones/Targets): To fall by at least 10% by 2020, 20% by 2025, and 30% by 2032 (relative to 2015)

Most recent data: 31.1 tCO₂e/£mGVA in 2020

Data source(s): Scottish Energy Statistics Hub > Energy Efficiency > Energy productivity of industry and services > Data - Services energy productivity. It should be noted that the £mGVA figure used as the denominator excludes Services sectors 49.1 through 49.5, 50, 51, and 68.2 IMP (transport and imputed rent).

Assessment: Off-Track

Commentary:

Prior to discussing the outturn data, it must be pointed out that the Climate Change Committee has provided the following feedback on the inclusion of this indicator in last year’s Monitoring Report:

“The ‘emissions intensity of non-domestic buildings’ data is a measure of CO₂e emissions per unit of economic activity. While this can usefully demonstrate decoupling of economic output from emissions, it should be considered alongside overall non-domestic emissions, as an increase in economic activity would mask a lack of progress in reducing overall emissions. Emissions must eventually reach zero, making it important to track simple total emissions figures.” (page 99)

We acknowledge the points made by the CCC concerning this indicator, and intend to review its design and usefulness ahead of next year’s monitoring report.

The emissions intensity of the Services sector was 31.1 tCO₂e/£mGVA in 2020, representing an increase of 2.2 tCO₂e/£mGVA compared to 2019. While Services emissions fell by 7% between 2019 and 2020 (from 2.9 MtCO₂e to 2.7 MtCO₂e), Services GVA fell by 14% (from £99,225m to £85,731m). This reverses a trend of decreasing emissions intensity for the sector, namely due to the effect of the COVID-19 pandemic on economic activity and hence the denominator of the indicator.

The CCP published February 2018, set ambition in the Services sectors to reduce emissions intensity by 10% by 2020, 20% by 2025, and 30% by 2032, relative to a 2015 baseline of 30.3 tCO₂e/£mGVA.

A simple pathway to meet the 2020, 2025, and 2032 targets is shown below. As the recorded emissions intensity of the Services sector in 2020 is above the target of 27 tCO₂e/£mGVA by 3.8 tCO₂e/£mGVA, progress is currently considered to be off-track. This primarily reflects a sharp decline in Services GVA resulting from the COVID-19 pandemic. It is unlikely that this indicator, in its current form, will return be on-track in coming years due to forecast low economic growth. To note, the figure also plots the outturn of Services emissions in MtCO₂e on the right-hand side axis.

Policy Outcome: 2

Indicator: % of homes with an EPC (EER, or equivalent) of at least C

On-track Assessment (Milestones/Targets): To reach 100% by 2035, subject to technical feasibility and cost-effectiveness

Most recent data: 45% of Scottish homes rated as EPC band C or better under SAP 2012 (RdSAP v 9.93) in 2019 similar to 2018.

Data source(s): Scottish House Condition Survey (SHCS) 2019. Energy efficiency ratings are calculated under different versions of Standard Assessment Procedure (SAP), the SAP 2009 methodology and the most recent SAP 2012 methodology applying two different versions of RdSAP. Using SAP 2009 enables us to examine the longer term trend in the energy efficiency of the housing stock since 2010. SAP 2012 (RdSAP v9.93) was first used in reporting data from the SHCS in the 2018 Key Findings Report and therefore only 2 years of data are available. For this reason SAP 2012 (RdSAP v9.92) is also included with data from 2014.

The latest available data is for 2019 as, due to the COVID-19 pandemic, fieldwork for the 2020 SHCS was suspended in March 2020 and was not resumed. The methodology used in the 2021 SHCS was also impacted by the pandemic, with findings due to be published shortly after this report.

Assessment: Too early to say/ Evidence and data is so far inconclusive

Commentary: Grouped EPC Bands under SAP 2009, SAP 2012 (RdSAP v9.92) and SAP 2012 (RdSAP v 9.93), 2010 to 2019.

The figure shows a strong trend of improvement in the energy efficiency profile of the housing stock since 2010. The proportion of dwellings rated C or better increased from 24% in 2010 to 51% in 2019 (SAP 2009), and 35% in 2014 to 47% in 2019 (SAP 2012, RdSAP v 9.92).

An improvement in the energy efficiency profile of the domestic building stock will contribute to reducing energy intensity and emissions intensity in the residential sector

Policy Outcome: 2

Indicator: % new homes built with a calculated space-heating demand of not more than 20 kWh/m²/yr

On-track Assessment (Milestones/Targets): Positive year-to-year change

Most recent data: Analysis of new-build domestic Energy Performance Certificates (EPCs) lodged in 2021.

Data source(s): EPC data for Q1 to Q4 2021 lodged with the Scottish Energy

Performance Certificate Register (SEPCR).

Assessment: On-track

Commentary: Without applying any moderation to remove potentially erroneous values, 1,829 records reported a space-heating demand intensity of 20 kWh/m²/year or less. This represents 8.1% of new-build domestic EPCs lodged for 2021. In both absolute and relative terms, this is an increase on previous years.^[13]

Minimum	1st Quartile	Median	3rd Quartile	Maximum
0.0	27.9	35.7	42.7	337.5

Adjusting the flow to account for any potentially erroneous values:

Removing the 0.5% of lodged records with the lowest space-heating demand intensity and the 0.5% with the highest space-heating demand intensity in effect removes all records with a space-heating demand intensity of less than approximately 8.7 kWh/m²/year, and removes all records with a space-heating demand intensity of greater than approximately 113 kWh/m²/year. This leaves 1,716 records (7.7%) with a space-heating demand intensity of 20 kWh/m²/year or less. This adjusted figure in previous years was 5.96% in 2019 and 7.51% in 2020 (please see footnote below to previous CCP Monitoring Reports).

Minimum	1st Quartile	Median	3rd Quartile	Maximum
8.7	28.0	35.7	42.6	113.0

Policy Outcome: 3

Indicator: % of households in fuel poverty

On-track Assessment (Milestones/Targets): 2030: No more than 15%, 2035: No more than 10%, 2040: No more than 5%

Most recent data: estimated 920,000 (37%) in April 2023.

Data source(s): Scenario modelling based on 2019 SHCS data.

Assessment: Too early to say. As required by the Fuel Poverty 2019 Act, we are required to prepare a periodic report, 3 years from publication of our Fuel Poverty Strategy, and subsequently each 3 year period thereafter. The first date this will commence from is December 2024, with respective timescales for this report publication in the Act.

Commentary: In April 2023, an estimated 37% of all households (920,000 households) were in fuel poverty with around 29% (720,000) in extreme fuel poverty.

The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 received Royal Assent in July 2019. The Fuel Poverty Strategy, required by the Act was published in December 2021 and sets out how the targets will be achieved. As the 2019 Act requires the Scottish Government to formally consult with the panel on the strategy, we are presently working with them to seek their views in relation to appropriate next steps, which includes strengthening the consultation and reporting processes for the strategy.

The most recent data for this indicator is from scenario modelling and was carried out using uprated data from the 2019 Scottish House Condition Survey (SHCS). For further details see Cost of Living (Tenant Protection) (Scotland) Act 2022: first report to the Scottish Parliament. Though note that the scenario modelling presented here was based on the Energy Price Guarantee rising to £3,000 from April 2023. These estimates have been superseded by those provided here which are based on the Energy Price Guarantee remaining at £2,500 for a further three months from April to June 2023.

Following the suspension of face-to-face interviewing in March 2020, there was no further data collection for the 2020 SHCS. The 2021 SHCS was carried out by an external+ approach, supplemented with alternative sources of data (e.g. from the Energy Performance Certificate) and the householder providing information to surveyors via telephone. The results of this will be published in May 2023.

Due to the issues with the 2021 external+ SHCS we intend to publish the key findings as experimental statistics and present the results as a snapshot for 2021. We will not be making comparisons with the National Statistics from the SHCS for earlier years as the results are not directly comparable due to the methodological differences. This is consistent with the approach taken for the 2020 SHS and the 2021 SHS.

The 2022 SHCS returned to full in-home surveying in April 2023.

Part C - Information on implementation of individual policies

Outcome 1: The heat supply to our homes and non-domestic buildings is very substantially decarbonised, with high penetration rates of renewable and zero emissions heating

Outcome 2: Our homes and buildings are highly energy efficient, with all buildings upgraded where it is appropriate to do so, and new buildings achieving ultra-high levels of fabric efficiency

Policy

Energy Company Obligation (ECO) requires obligated energy supply companies to deliver energy efficiency measures in homes – mainly insulation-based measures and boiler replacements.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

The UK Government retains responsibility for the design and delivery of the ECO scheme on a GB basis. Delivery of Scottish Government programmes is broadly aligned with eligibility for ECO finance. The Area Based Schemes programme supports Scottish councils to establish and administer local ECO flex schemes.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

As part of our Area Based Schemes, councils are asked to publish a Statement of Intent to enable local ECO flex schemes to operate. Every council in Scotland operated a flex scheme as part of ECO3 and this is the aim for the ECO4 scheme launched in August 2022.

Timeframe and expected next steps

We continue to engage with the UK Government about the design of the ECO scheme in Scotland.

Policy

Energy Efficient Scotland Delivery Schemes:

• Area Based Schemes and Warmer Homes Scotland.

• Home Energy Scotland Advice Service
• Home Energy Scotland Grant and Loan Scheme for zero emissions heating technologies and energy efficiency measures - boosted.
• Business Energy Scotland
• SME Loans and cashback

scheme for zero emissions heating technologies and energy efficiency measures - boosted.

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

In line with our commitments in the Programme for Government, the Scottish Government has maintained our annual investment in Area Based Schemes (ABS) at £64m in 2022/23. Funding remains at the same level as in 21/22 and is up by £9m from £55m in 2020/21.

ABS funding was increased in 21/22 to enable more whole house retrofits. This includes the installation of zero emissions heating systems and renewables.

The eligibility criteria for Warmer Home Scotland was reviewed, resulting in widening the criteria to enable more households in fuel poverty to benefit from the assistance available under the scheme. In addition, a fabric only stream was introduced to allow a wider number of households to benefit from the installation of grant funded energy efficiency measures

The HES Loan and Cashback scheme was superseded by the HES Grant and Loan in December 2022. Homeowners are now able to access standalone grant support for the installation of energy efficiency measures and zero direct emissions heating systems as well as an optional interest free loan. The new scheme also introduces a rural uplift to address higher installation costs in those areas.

The Advice and support service was rebranded as Business Energy Scotland in April 2022 and continues to be in high demand. Measures were introduced in 22/23 to enable more businesses to access advice and energy assessments, including increased funding for additional energy advisors and qualifying energy reports and launching fast track energy assessments for specific installations.

In 22/23 the SME Cashback grant for energy efficiency measures was increased to 75% up to a maximum of £20K to further incentivise the uptake of measures.

Home Energy Scotland Advice Service: In 2022/23 we committed to expanding the Home Energy Scotland advice service by 20%.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Information about delivery of our Area Based Schemes is published here. ABS projects have improved over 104,000 properties since 2013. In 2020/21, councils reported installing over 6,000 energy efficiency improvements.

Warmer Homes Scotland has supported over 30,000 customers since it started in 2015, with the current contract due to expire in 2023.

SME Loan and cashback scheme: since inception the scheme has paid out almost £40 million in loan and cashback finance and supported over 1700 projects.

Home Energy Scotland now has the capacity to advise over 130,000 households this year - an increase of around 13,500 on 2021-22.

Timeframe and expected next steps

The Scottish Government and local councils are exploring how they can provide greater certainty about funding and delivery contracts to help accelerate delivery and expand local supply chains.

The current Warmer Homes Scotland contract is due to expire in 2023, with procurement of a successor underway

Measures supported and funding amounts available through the HES Grant and Loan will be kept under review to ensure they align with forthcoming regulations on energy efficiency and heat.

SME Loan and cashback scheme: we anticipate the SME advice service will remain in high demand and will continue to work with delivery stakeholders to maintain support levels and develop advice and guidance in line with SG Policy.

SME Loan and cashback scheme: the scheme is under review with the aim of launching a SME Grant and Loan Scheme in 2023/24.

The Home Energy Scotland advice service remains in increasingly high demand and we will continue to work with delivery partners to provide the best form of advice and guidance to meet the needs of the public, in line with SG Policy.

Policy

Review support programmes: We will review existing Scottish Government funding schemes to ensure that they support the deployment of low and zero emissions heat. We will expand the provision of loans to the SME sector, and enhance the wider energy efficiency and heat advice service and provision of tailored start-to-end support

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

The successor to the Warmer Homes Scotland scheme will follow a whole house retrofit process and a zero emissions heating first approach to maximise the number of households able to install zero emissions heating where not detrimental to fuel poverty objectives.

The HES Grant and Loan, launched in December 2022 provides grant funding of £7500 for the installation of heat pump and £7500 for 75% of the eligible costs of energy efficiency measures. This replaced the previous loan and cashback offer, allowing homeowners a more flexible way to access funding, with a clear headline offer.

Timeframe and expected next steps

The successor to Warmer Homes Scotland is due to go live in 2023.

Policy

Procure a new national delivery scheme, to replace the existing

Warmer Homes Scotland contract, to open in 2022.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The invitation to tender for the successor scheme was published in July 2022 with the contract due to be awarded and commenced in 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The successor contract is due to commence in 2023 once the current contract expires. The next steps in the procurement process are contract award, followed by a mobilisation period for the winning bidder.

Policy

Energy Efficiency Standard for Social Housing: will be met by social landlords by 2020.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

88% of social homes are compliant with EESSH.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The Scottish Housing Regulator has reported in the most recent SHCS data (2019) that 88% of social homes have met EESSH. This is the most recent data because the physical survey was suspended in 2020 due to the pandemic. Data for 2021 is due to be published shortly after this report is published^[14].

Policy

New Build Heat Standard (NBHS): requiring new buildings, applying for a building warrant from 2024 onwards, to use zero direct emissions heating (ZDEH) systems.

Date announced

2020-2021 PfG + CCPu

Progress on implementation since time of last report / CCPu

We have analysed results from our initial Scoping Consultation^[15], published December 2020, and subsequently published and analysed our second consultation (Part II)^[16].

We engaged throughout the consultation process with key stakeholders, holding workshops and individual meetings.

Both the main working group and non-domestic sub-group continued to meet during this period.

We have completed and published the following further research projects:

GHG emissions associated with low and zero carbon heating systems^[17]; and

Phase 2 of our affordable housing ZDEH evaluation^[18].

An additional research project, to consider the challenges and opportunities of installing ZDEH systems in new buildings across Scotland’s islands, has also concluded. This will be published prior to the laying of the NBHS legislation in Parliament.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

We committed to launching a second consultation on the NBHS. This was achieved.

We have committed to introducing regulations in 2023 to be in force for April 2024. We are on track to meet this target.

Timeframe and expected next steps

We aim to lay the required regulations in the first half of 2023 and for the NBHS to be in force from April 2024.

Policy

Review of energy standards within building regulations. The review investigates the potential for further, significant improvement on 2015 standards and how building standards can support other carbon and energy policy outcomes, including our decarbonisation of heat agenda.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Review commenced in 2020 now completed, outcomes published in June 2022. Revised standards and guidance applicable to new construction from 1 February 2023, setting more challenging energy and emission targets for new development and enable early adoption/response to the components of the pending 2024 New Build Heat Standard.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Revised standards and guidance from 1 February 2023 are expected to improve outcomes reported under indicator 2.4 – ‘% new homes built with a calculated space heating demand of not more than 20 kWh/m²/yr’ from 2024 onward.

Timeframe and expected next steps

Review complete and revised standards in force.

Ministerial commitment to Parliament on further review of standards to deliver ‘a Scottish equivalent to Passivhaus’, including laying of regulations in December 2024.

Policy

Heat in Buildings regulation: Put in place regulation to increase uptake of zero emissions heating systems and improve energy efficiency standards across owner occupied and private rented homes to come into force from 2025.

Date announced

Heat in Buildings Strategy

Progress on implementation since time of last report / CCPu

We committed in the 2022 Programme for Government to consult on proposals for a Heat in Buildings Bill in 2023.

We have committed in the Bute House Agreement to have legal provisions in force from 2025 to provide the necessary framework to drive action.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The next milestone is to consult on proposals for a Heat in Buildings Bill in 2023. We are on track to meet this commitment.

Timeframe and expected next steps

The next step is to consult on proposals in 2023.

Policy

Low Carbon Infrastructure Transition Programme (LCITP) - supports investment in decarbonisation of business and the public sector.

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

The LCITP is now closed to applications but is supporting projects that are currently under construction that will deliver significant carbon savings including strategically important low carbon heat networks.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The LCITP formally drew to a close in April 2022.

Policy

Expanded £1.6bn Heat in Buildings capital funding over the next parliament building on the Low Carbon Infrastructure Transition Programme (LCITP) and existing energy efficiency and zero emissions heat support programmes

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

As set out in the Heat in Buildings Strategy, we have boosted our ambition to invest at least £1.8 billion in heat and energy efficiency over the course of the current parliament.

This includes Scotland’s Heat Network fund, which was launched 21 February 2022 making available £300 million capital over this parliament to support the development and roll out of zero emission heat networks across Scotland.

The £1.8 billion also includes at least £465m to support those least able to pay, £200m for the Social Housing Net Zero Heat Fund, and £200m Scottish Green Public Sector Estate Scheme.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The budget for these funding programmes is committed over the course of the current parliament.

Programmes will remain open to applications and aim to support an accelerated deployment of energy efficiency measures and zero emission heating systems.

Policy

Non Domestic Public

Sector Energy Efficiency (NDEE) Framework: A four year framework launched in March 2016, designed to support public and third sector organisations to procure Energy Efficiency retrofit work. The Framework will continue for a further four years commencing in 2020. NDEE Support Unit accelerates the number of projects and delivery timescales of public sector energy efficiency projects using the NDEE Framework and supports our wider ambitions around energy demand reduction.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Public Sector bodies are continuing to use the Framework for the development of pipelines of projects looking at energy efficiency and heat decarbonisation. 17 projects received pre capital support enabling the development of more strategic projects.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The Framework will be extended for a year from 1 April 2023.

Timeframe and expected next steps

A new Framework will be developed during 2023 and launched 1 April 2024. This will improve the current Framework and ensure it is fit for purpose and reflects the objectives for net zero emissions.

Policy

The Renewable Heat Incentive (RHI) - a GB-wide scheme created by the UK Government (with the agreement of the Scottish Government). UK Government is extending both the domestic and nondomestic RHI out to 2022

Date announced

August 2020

Progress on implementation since time of last report / CCPu

1,126.9 MW^[19] of accredited capacity under the non-domestic RHI (NDRHI) between November 2011 and December 2022.

1,770 GWh of heat had been paid for between April 2014 and end December 2022 under the domestic RHI scheme in Scotland.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Scotland consistently attracted more than its pro-rata share under both the NDRHI and DRHI, with around 19% of non-domestic and 18% domestic accredited installations being in Scotland.

Timeframe and expected next steps

The NDRHI closed as scheduled on 31 March 2021, though qualified extensions for both Tariff Guarantee and non-Tariff Guarantee applications were implemented prior to its closure. These extensions were due to end on 31 March 2023.

The Domestic Renewable Heat Incentive (DRHI) formally closed on 31 March 2022, and was replaced by the Boiler Upgrade Scheme. The Scottish Government opted out of the Boiler Upgrade Scheme in favour of boosting our existing programmes.

Policy

UK Green Gas Support

Scheme – a GB-wide Green Gas Scheme is planned to come into force in 2022, stimulating biomethane injection into the gas grid

Date announced

UK Government announcement.

Progress on implementation since time of last report / CCPu

The GGSS provides tariff-based support for biomethane produced using anaerobic digestion (AD) and injected into the gas grid, as a direct replacement for natural gas.

The scheme opened for applications on 30 November 2021 and at present runs to 30 November 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The UK Government is consulting on proposals to extend the GGSS scheme by four months to 31 March 2026

Policy

UK Clean Heat Grant - a GB-wide Clean Heat Grant is planned to come into force in 2022, supporting uptake of heat pumps (and limited biomass boilers) via upfront grants.

Date announced

UK Government announcement

Progress on implementation since time of last report / CCPu

The UK Government launched the Boiler Upgrade Scheme (formally the Clean Heat Grant) in April 2022.

The Boiler Upgrade Scheme (BUS) provides upfront capital grants to support the installation of heat pumps and biomass boilers in homes and non-domestic buildings in England and Wales.

£450 million of grant funding has been made available through the scheme over three years from 2022 to 2025.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A – statistics for the scheme published monthly^[20].

Timeframe and expected next steps

Scheme will run until 2025 in England and Wales.

Policy

UPDATED POLICY: Support for Heat Networks: continue providing funding towards the capital costs of heat networks through Scotland’s Heat Network Fund, which offers £300m in grant funding until 2026, and through low interest loans offered by the District Heating Loan Fund.

Date announced

Originally: CCP 2018

Updated 2023

Progress on implementation since time of last report / CCPu

Scotland’s Heat Network Fund was launched in February 2022. Together with the funding awarded under the Low Carbon Infrastructure Transition Programme, £41.4 million has been awarded to heat network projects since the CCP was published, resulting in carbon savings, affordable heating for end users and growth of the supply chain.

The District Heating Loan Fund (DHLF) continues to offer low interest loans to help overcome the financial barriers to the delivery of low carbon infrastructure projects.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

We expect demand for Scotland’s Heat Network Fund to increase due to the activity of the Heat Network Support Unit.

We will consider how the DHLF can be best utilised to cover any future gaps in support for heat networks.

Policy

Implement the provisions of the Heat Networks (Scotland) Act 2021 to create a strong regulatory framework to support delivery in 2024.

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

The Heat Networks Delivery Plan, was published in March 2022, as required by the Heat Networks Scotland Act.

Public consultation on the setting of a 2035 target occurred between December 2022 and March 2023.

We will continue to work with the heat networks sector and local government as we develop detailed regulations and aim to put in place a functioning regulatory system, subject to public consultation in 2024.

Discussions are underway with local authorities on feasibility of completing the review of zones by end of 2023 (to coincide with submission of Local Heat and Energy Efficiency Strategies).

Significant progress has also been made on heat network consents and heat network assets.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The Act creates two statutory deadlines:

1 April 2022: Publication of Heat Networks Delivery Plan (with a review and reporting required every 2 years from the last report)

1 October 2023: Laying of SSI to set 2035 target for heat network supply.

Further milestones on development of regulatory packages are provided in the Heat Networks Delivery Plan.

Timeframe and expected next steps

We will:

lay regulations and guidance on building assessment reports and heat network zoning and consult on regulations for consenting and key heat network assets in Spring 2023.

Consultations on heat network permitting and licensing are due to occur in late 2023 / early 2024.

Review of the Heat Network Delivery Plan by March 2024. This will provide a further update on progress.

We are working to deliver the regulations during 2024, but may need to keep timelines under review to ensure alignment, where practicable, with UK Government plans to regulate on the reserved areas.

Policy

UPDATED POLICY:

Continue supporting the development of heat network projects in Scotland through the Heat Network Support Unit, which is a collaboration between organisations offering advice, guidance and funding to heat networks projects in the pre-capital stages of development.

Date announced

Maintained

Progress on implementation since time of last report / CCPu

The Scottish Government launched its Heat Network Support Unit (HNSU) in 2022. It is a partnership between the Scottish Government, Zero Waste Scotland and Scottish Futures Trust and acts as the successor to the Heat Network Partnership.

The HNSU supports the growth of heat networks by addressing key challenges in the pre-capital stages of heat network development and building capacity across the public sector to deliver successful projects.

Working primarily with public sector organisations, the HNSU identifies and supports prospective heat network projects. It offers advice and grant funding for pre-capital stages of works, for example developing feasibility studies and Outline Business Cases, as well as for procuring technical, financial and legal advisors.

The HNSU is supporting at least 15 projects across Scotland through the feasibility and Outline Business Case stages.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

No

Timeframe and expected next steps

The HNSU will see an increased budget in the financial year 2023-24, allowing the support of more projects.

Policy

Net Zero Carbon Public Sector Buildings Standard will be introduced in 2021 and progressively rolled out across the public sector, as announced in the Programme for Government 2019.

Date announced

2020-2021 PfG + CCPu

Progress on implementation since time of last report / CCPu

The new build Net Zero Carbon Public Sector Buildings Standard is now live and several public sector organisations have expressed an interest in implementing the standard.

We are still developing a retrofit version of the standard.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

We are aiming to launch the retrofit standard in 2023.

Policy

Local Heat and Energy Efficiency Strategies (LHEES) will be in place by the end of 2023, setting out preferred heat solutions zones, guiding building owner decision making about replacement heating systems, and forming the basis for local delivery plans targeting heat and energy efficiency investment.

Date announced

2020-2021 PfG + CCPu

Progress on implementation since time of last report / CCPu

A Scottish Statutory Instrument was passed by the Scottish Parliament to require all local authorities to produce a draft Local Heat and Energy Efficiency Strategy and Delivery Plan by the end of 2023 and then update them every five years. This came into force on 21 May 2022.

Guidance setting out what is required when developing an LHEES was published in October 2022 alongside an updated version of the LHEES Methodology. This sets out how Local Authorities can fulfil the requirements; however this approach is not mandatory.

Multi-year funding (until 2027/28) for local authorities to resource the development of their LHEES has been agreed in partnership with COSLA.

Timeframe and expected next steps

Local Authorities to publish their first Local Heat and Energy Efficiency Strategies and Delivery Plans by the end of 2023.

Policy

Assessment of Energy Performance and Emissions Regulations (Non-Domestic Buildings)

• The Assessment of

Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016 require assessment of the energy performance and emissions of larger nondomestic buildings (those over 1,000 m²). A review programmed for 2021 will investigate and consult upon amended scope of standards and more challenging improvement targets to create a viable pathway for all existing non-domestic buildings to deliver the level of energy demand and emissions reductions needed

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

As set out in the last Climate Change Plan monitoring report, the change in context since publication of the CCP means that instead a call for evidence was issued around three broad regulatory approaches:

1. Measures based approach – increase the ambition of the existing 2016 Regulations

2. Set a minimum EPC standard

3. Regulate based on actual energy consumption (operational ratings)

The findings of the evidence review was published in August 2022.

An independent Evidence Review was commissioned to identify possible sources of information relating to heat use in individual non-domestic buildings.

We have been developing proposals with an independent Working Group, towards these headline proposals being included in the consultation on the Heat in Buildings Bill.

Revisions to the existing Energy Assessment process are being carried out alongside revisions for the domestic energy assessment process and those for the other UK nations.

The proposed framework will allow alignment with the revised EU Energy Performance of Buildings Directive.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The long term milestones for delivery are set in the Heat in Building Strategy which commits to introducing regulations to achieve this by 2025.

Timeframe and expected next steps

We will consult on this as part of our proposals for a Heat in Buildings Bill in 2023.

Policy

Support for community low and zero emissions heat projects through CARES.

Date announced

CCPu

Progress on implementation since time of last report / CCPu

Heat decarbonisation is a key focus of the current CARES contract, with tailored packages of support available to eligible applicants.

The scheme provides free advice, and loan and grant funding to assist community groups in developing renewable energy, heat decarbonisation and energy efficiency projects, supporting the growth of community and locally owned energy in Scotland.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Strategic policy direction will be provided to the contract delivery body through the Scottish Government’s contract manager in consultation with wider heat policy colleagues, to ensure CARES is aligned with Scottish Government heat decarbonisation objectives, with feedback on progress monitored through regular engagement and reporting commitments.

The scheme has, since inception in 2010, offered advice to over 900 organisations and supported over 600 community and locally owned renewable projects throughout Scotland, offering funding of over £58 million to date.

Timeframe and expected next steps

Duration of CARES contract April 2021 – March 2025. Learning gathered from projects supported and then used to inform future projects.

Policy

Salix financing facility to support investment in non-domestic buildings retrofit.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Salix Finance continues to deliver the Public Sector Energy Efficiency Loan Scheme on behalf of Scottish Government.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Scottish Government and Salix are currently in discussion to review the existing funding model with a view to announcing a new scheme in 2023.

Policy

Work with social landlords to bring forward the review of the existing Energy Efficiency Standard for Social Housing (EESSH2) with a view to strengthening and realigning the standard with net zero requirements.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

In June 2022, the Scottish Government confirmed it would accelerate the review of EESSH2 in order to bring it in line with Net Zero.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

EESSH2 set a target for energy efficiency in social housing of EPC B by 2032. This target has been temporarily put on hold pending the outcome of the review. Interim Guidance for social landlords during the review of EESSH2 was published in October 2022.

Timeframe and expected next steps

The review commenced in September 2022 and is due to complete during 2023.

Policy

Work with our partners, including the UK Government, local authorities and utility providers to determine the best approach to heat decarbonisation for buildings currently heated by natural gas.

Date announced

CCPu

Progress on implementation since time of last report / CCPu

We continue to work with the UK Government, local authorities and utility providers on areas of mutual interest.

Work is underway to develop an understanding of the options for buildings currently using gas. Local Heat and Energy Efficiency Strategies (LHEES), being developed by local authorities, will set out the long-term plan for decarbonising heat in buildings and improving their energy efficiency across an entire local authority area. LHEES will identify strategic heat decarbonisation zones and set out the principal measures for reducing buildings emissions within each zone. LHEES are designed to evolve over time as policy and regulations are introduced and new technologies become available. They will initially focus on strategic technologies that are already tried and tested, such as energy efficiency measures, heat pumps and heat networks.

We are engaging with SGN and National Grid to understand the role hydrogen can play in meeting our heat decarbonisation targets.

We also continue to call on the UK Government to accelerate reserved decisions on the role of hydrogen and the future of the gas network, and to take urgent action on rebalancing gas and electricity prices, which we believe will have a profound influence on the cost of zero direct emissions heating systems and their uptake.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Local authorities are required to produce a draft Local Heat and Energy Efficiency Strategy and Delivery Plan by the end of 2023.

Policy

Review the system of building assessments and reports on energy performance and heat to ensure a system that is fit for purpose in meeting net zero emissions objectives for heat in buildings.

Date announced

CCPu

Progress on implementation since time of last report / CCPu

In Summer 2022 we published a response to our 2021 consultation. This set out our intention to bring forward final revised proposals for EPC reform in 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

We published our consultation response in Summer 2022.

Timeframe and expected next steps

We plan to publish a final consultation on EPC reform in 2023.

Policy

Work with stakeholders to further understand and support the application and use of low and zero emissions heating within designated historic environment assets and hard to treat buildings.

Date announced

CCPu

Progress on implementation since time of last report / CCPu

The Tenements Short Life Working Group (SLWG) undertook a workshop with stakeholders on traditional and protected buildings on 26 October 2022, and this has informed the recommendations of the SLWG which will be submitted to the Minister.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The milestones are being met and we will continue to work closely with Historic Environment Scotland on policy in this area.

Timeframe and expected next steps

We will consult on this as part of our proposals for a Heat in Buildings Bill in 2023.

Policy

Develop and introduce future regulation for non-domestic buildings and launch a consultation on these proposals.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We issued a Call for Evidence on three possible approaches to regulating heat in non-domestic buildings in December 2021. The findings of the evidence review was published in August 2022.

We have been developing proposals with an independent Working Group, towards these headline proposals being included in the consultation on the Heat in Buildings Bill.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The long term milestones for delivery are set in the Heat in Building Strategy.

The Heat in Buildings Strategy commits to introducing regulations to achieve this by 2025

Timeframe and expected next steps

We will consult on this as part of our proposals for a Heat in Buildings Bill in 2023.

Subject to passage of the Bill we will consult further on the regulations themselves with an aim to have them take effect by 2025.

Policy

Undertake work to identify the capacity and output of renewable electricity generation required in Scotland to support the projected rollout of heat pumps.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

As part of research we have commissioned into the energy transition in Scotland, we have assessed potential ranges of energy demand and generation, including for electricity, out to 2045 under three future energy scenarios. These scenarios have informed the roadmap included in the draft Energy Strategy and Just Transition Plan and further assessments are underway as part of the next CCP. We will continue to update our assessments.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Consider whether to extend Permitted Development Rights for zero-emission heat networks and micro-renewable technologies.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We are carrying out a multi-phase review of permitted development rights (PDR) in Scotland.

PDR for renewable energy equipment, including micro renewables, to be considered through Phase 3 in Spring 2023. Heat networks PDR are now in phase 4.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Work is in part dependent on progress with the wider legislative framework on heat networks.

Timeframe and expected next steps

Once the legislative framework for heat networks is adequately developed, we will consider how PDR might best align with the statutory process.

Policy

Undertake work to better understand the impact on electricity networks of projected heat pump deployment. Work with the Distribution Network Operators through the Heat Electrification Partnership to build an evidence base to inform business planning. Work with industry and networks to understand need for heat pumps systems to be smart enabled, and identify options to integrate smart systems into our delivery programmes; and to explore how innovation can help to improve the consumer experience.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We have worked closely with Distribution Network Operators to help their business plans for the next five years reflect the scale and pace of low carbon technology deployment (including heat pumps) required to meet Scottish Government targets.

Ofgem has now finalised these plans and provided a mixture of up front allowances and uncertainty mechanisms that will support our ambitions and allow DNO's to respond to increasing demand for connections.

We have also commissioned research looking into the network investments of the heat transition for Scotland, which is due to publish shortly. It will form part of the evidence base for how we approach decarbonising our buildings in Scotland.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Support heat networks through: Introducing a Non-Domestic Rates Relief for renewable and low carbon heat networks until 2023/24.

Date announced

CCPu

Progress on implementation since time of last report / CCPu

The Non-Domestic Rates (District Heating Relief and Renewable Energy Generation Relief) (Scotland) Amendment Regulations 2021 introduced a 90% relief for district heating networks powered wholly or mainly by renewable generation.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

The relief is available from 1 April 2021 and ending on 31 March 2024.

Timeframe and expected next steps

A review of Rates Relief regulations for district heating networks will take place in 2023.

Policy

Through National Planning Framework 4 (NPF4), ensure that local development plans take account of where a Heat Network Zone has been identified

Date announced

CCPu

Progress on implementation since time of last report / CCPu

NPF4, which was adopted in Feb 2023 contains a policy for Local Development Plans to take account of HNZ. The policy states ‘LDPs should take into account the area’s Local Heat & Energy Efficiency Strategy (LHEES). The spatial strategy should take into account areas of heat network potential and any designated Heat Network Zones (HNZ).

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Complete

Policy

Explore how local tax powers could be used to incentivise or encourage the retrofit of buildings, and commission further analysis to identify potential options.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We will continue to explore options to incentivise buildings retrofit / transition to zero emissions heat using local tax powers.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Design future delivery programmes to ensure significantly accelerated retrofit of buildings, with new programmes to be in place from 2025.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

In December 2022, we launched our improved Home Energy Scotland grants and loans scheme. The successor to our Warmer Homes Scotland scheme will also start operations later this year. This will increase the number of households supported annually to install the robust insulation measures needed to support lower carbon heating systems.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Our delivery programmes will evolve over the course of the decade to meet the scale of change required and align with any regulations we introduce.

Outcome 3: Our gas network supplies an increasing proportion of green gas (hydrogen and biomethane) and is made ready for a fully decarbonised gas future.

Policy

Hydrogen for heat demonstrator – providing £6.9m support for SGN’s H100 hydrogen for domestic heat demonstrator.

Date announced

2020-2021 PfG

Progress on implementation since time of last report / CCPu

SGN’s H100 project continues to make good progress towards their expected launch date of 2024.

Key contracts have been awarded, and the threshold of 270 customer sign-ups has been reached and surpassed.

SG representatives remain engaged with this work, attending monthly board meetings and inputting providing views on risk and policy where appropriate.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The H100 Fife hydrogen network is scheduled to go live in 2024; the project will be operational until March 2027.

Policy

Work with UK

Government on product standards, with a view to making new gas boilers hydrogen-ready.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The UK Government’s recent Improving Boiler Standards and Efficiency consultation included a potential requirement for new gas boilers to be ‘hydrogen-ready’ from 2026.

Product standards for boilers are a reserved matter but the Scottish Government has written to the UK Government to welcome the proposals within the consultation, while calling for the phase-out of gas boilers to be expedited from the mid-2030s.

Outcome 4: The heat transition is fair, leaving no-one behind and stimulates employment opportunities as part of the green recovery

Policy

Develop a long-term public engagement strategy and begin implementation of early actions.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Advice on good practice approaches to public engagement has been collated from a range of communication and behaviour change experts.

Feedback from a Call for Evidence will inform finalisation of the strategy, to publish in Summer 2023.

Research projects, to build a wider evidence base for the strategy, included exploring:

• trusted messengers and communication channels,
• the experience of early adopters of ZDEH systems, and
• a series of in-depth public focus groups on proposed regulations, future support needs and public engagement tactics.

A national marketing campaign to promote existing advice and support for heat and energy efficiency improvements was delivered November 2022 to March 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Development of an appropriate monitoring approach is underway, in line with the strategy.

Timeframe and expected next steps

Publish in 2023

Policy

Smart Meter installation: All homes and businesses will be offered a smart meter by 2020 under a UK Government initiative, providing the opportunity for a greater understanding of final energy consumption.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

The smart meter programme is owned and led by the UK Government who have responsibility for the policy, regulatory and commercial framework.

The Scottish Government is working to deliver a Smart Meter Advice Portal (SMAP) through Home Energy Scotland (HES), to enable customers to make the most of the energy use data provided by their smart meters.

HES has successfully developed SMAP, which has all the functionality needed to operate as intended, however data issues that are in the control of the Data and Communications Company (DCC) restrict HES’ ability to use the tool’s full functionality and it is not currently able to fulfil its potential.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

In February 2023, the UK Government published the Mid-Point Review, which sets proposals for the second half of the Framework (2024/2025). The proposals are summarised below:

• Mixed portfolio suppliers being required to meet both the domestic and non-domestic components of their installation requirement.
• Updates to the rollout model used to set the tolerance levels for Year 3 and Year 4 of the Framework.
• The adjustment to the formula used to set supplier targets in order to mitigate the impact of customers switching suppliers applied to all targets in Year 2 (2023) will continue to apply to non-domestic installation requirements in Year 3 (2024).

The consultation closed on 21 March 2023, and the UK Government will issue a response in due course.

According to the latest statistics provided by Smart DCC in February 2022, 47.7% of all meters in Scotland are now smart meters.

Timeframe and expected next steps

Ongoing

Policy

Work with the Scottish Cities’ Alliance and the seven cities on the opportunities to accelerate activity on heat and energy efficiency.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The Scottish Government provided funding support to the Scottish Cities Alliance (SCA) to deliver a Carbon Scenario Tool to support both the cities net zero ambitions and the production of LHEES.

The Carbon Scenario Tool project has now completed and reported in May 2022^[21].

Recommendations from this report have fed into further work by SG, SCA, Improvement Service, ECCI, Sustainable Scotland Network and CoSLA. This has resulted in a partnership proposal to establish a local government facing ‘Climate Intelligence Service’ and this is currently being considered by SG and CoSLA, with the prospect of establishing the service in 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Complete

Policy

Provide capital investment for Scottish colleges for equipment to deliver training for energy efficiency and heat.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We published our Heat in Buildings Supply Chains Delivery Plan in November 2022, including ongoing support for skills and training.

Recent investments means that there is broadly sufficient infrastructure in Scottish Colleges at current levels of demand for training. However, training is not equally available across all geographic areas.

Scottish Government’s therefore invested in a new mobile training centre for heat pump installation, accessible to any college in Scotland while being hosted by South Lanarkshire College, which will be capable in delivering on site training across Scotland.

Policy

Respond to the recommendations of the Expert Advisory Group on a heat pump sector deal for Scotland, by Q1 2022

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Scottish Government’s response was published on 11 November 2022.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Complete

Policy

Bring forward and support demonstrator projects, such as: hybrids and high temperature heat pumps; the use of hydrogen for space and water heating; projects to understand the impact of heat transition on existing energy networks.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Our Heat in Buildings Supply Chain Delivery Plan announced a new Green Heat Innovation Support Programme that makes available £17.6 million in funding for Scottish based companies to develop ideas that support growth of the green heat sector. This includes funding for feasibility studies as well as large-scale R&D and capital investment projects.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

No

Timeframe and expected next steps

We will continue to identify opportunities that can support research and development in Scotland's heat transition.

Policy

Publish a ‘Heat Network Investment prospectus’ in 2021/22 - a first-cut of HN Zones across Scotland, combined with information on decarbonisation needs of existing networks.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We published a First National Assessment of Potential Heat Network Zones on 13 April 2022.

Work on the decarbonisation of existing networks will be taken forward in 2022/2023.

Timeframe and expected next steps

Complete (renamed as “First National Assessment of Potential Heat Network Zones”)

Policy

Establish a short life working group on finance for the heat transition.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We have established a Green Heat Finance Task Force in 2021 to explore potential new and value for money innovative financing mechanisms for both at - scale and individual level investment in heat

Timeframe and expected next steps

The Taskforce meetings began in February 2022. Their recommendations to the Scottish Government will be published through an interim report this spring and a final report this autumn.

Policy

Establish principles to underpin our commitment to ‘no-one being left behind’ in the heat transition, ensuring our approach neither increases the fuel poverty rate nor increases the depth of existing fuel poverty. This will include the effective design and targeting of our fuel poverty and heat in buildings programmes.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The Heat in Buildings Strategy sets out the principles that will guide our delivery programmes, to assess the impacts of our programmes on fuel poverty rates, and to ensure only take forward actions where they are found to have no detrimental impact on fuel poverty rates, unless additional mitigating measures can also be put in place.

We published research in October 2022 which explored the role energy storage might play in reducing energy costs when installed alongside zero emissions heat: Building-level energy storage: reducing consumer bills to deliver zero-emissions heat.

This will form part of the evidence base for how we approach decarbonising our buildings in Scotland.

We aim to make sure that the heat transition happens in a way that protects those who need it most, and leaves no-one behind. As part of this, we will publish a draft Buildings a Construction Just Transition Plan later this year.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Ensure Local Heat and Energy Efficiency Strategies are developed through extensive engagement with local communities.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Guidance setting out what is required when developing an LHEES was published in October 2022.

The Guidance included a requirement for extensive engagement as local authorities develop their LHEES including with local communities.

Policy

Continue delivery of energy efficiency investment to support fuel poor households and conduct further modelling and analysis to better understand the potential impact of the heat transition on fuel poor households and the scale of, and options for, mitigation that may be required.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We are conducting internal analysis to understand the intersection of fuel poverty and heat decarbonisation and we continue to evolve our schemes to ensure solutions are tailored to the specific circumstance of households.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Urge the UK Government to rebalance levy costs on energy bills to make gas and electric systems relatively more cost comparable.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We continue to press the UK Government on this.

In its recent consultation and Net Zero plan – Powering Up Britain, the UK Government restated its ambition to publish soon proposals on how to rebalance energy bills away from electricity to incentivise electrification across the economy.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing