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Publication - Impact assessment

Social housing net zero standard consultation: island communities impact assessment

Published
28 November 2023
Directorate
Energy and Climate Change Directorate
Topic
Building, planning and design, Energy, Environment and climate change, +1 more … Housing
ISBN
9781835216828

Island communities impact assessment for the consultation on a new Social Housing Net Zero Standard in Scotland.

View supporting documents Supporting documents

Step Four – Assessment

24. The above evidence gathering constituted a screening exercise to identify if an Island Communities Impact Assessment would be required. As it was found to be the case 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.

25. The following section assesses the extent to which the proposals for the new Social Housing Net Zero Standard can be delivered in such a manner as to improve or mitigate, for island communities, the outcomes resulting from them.

B) The ICIA (Section 8 Assessment)

26. The Islands (Scotland) Act 2018 requires an ICIA to:

  • describe the likely significantly different effect of the new standard;
  • assess the extent to which the Scottish Ministers consider that the new standard can be developed in such a manner as to improve or mitigate, for island communities, the outcomes resulting from the new standard; and
  • set out the financial implications of steps taken under this subsection to mitigate, for island communities, the outcomes resulting from the new standard.

27. The following table sets out the key issues in this impact assessment and the mitigations in place.

Issue Key mitigation
Potential for higher installation and operational costs for clean heating systems, recognising the impact of accommodation constraints, weather and travel disruption) and availability of appropriate funding and finance which takes account of these challenges.
  • The Social Housing Net Zero Heat Fund launched in August 2020 and is making at least £200 million available to social landlords until 2026 for the retrofit of their existing housing stock.
  • The fund supports both the deployment of clean heating and "fabric first" enhancements, helping landlords deliver warmer and more energy efficient homes.
  • Projects are eligible for up to 60% of the costs of clean heating systems and 50% of energy efficiency measures.
  • Rural and island communities face different challenges when delivering decarbonisation projects in social housing so the fund has introduced uplifts to the average grant cap. For projects in rural areas, the average grant cap per property will be increased by 11% and in remote areas by 22%. Rural and Remote areas can be identified using the 6 Fold Scottish Government classification.
  • We recognise the additional time taken to develop projects in islands settings and ensure that this is given consideration in project and financial planning.
  • The Green Heat Finance Taskforce is exploring ways to encourage a greater flow of private finance into the installation of clean heating and to improve the energy efficiency of Scotland's buildings. Private finance will be required to complement that available through the wider public sector, to ensure property owners can access the necessary finance to install clean heat systems in a form which works best for their individual circumstances and which allows them to spread the upfront costs over time.
  • The Taskforce has brought social landlords and their representatives together with financial investors to discuss options for financing the transition of the existing social housing stock to net zero. The Taskforce's final report will be published in 2024 and will include consideration of financing options to enable social housing investment in clean heating solutions.
Higher heating costs and high levels of fuel poverty.
  • The Scottish Government continues to believe that better energy efficiency standards in homes can save energy and reduce bills while making homes warmer and more comfortable. Improving the energy efficiency of our housing stock remains a huge priority for Scottish ministers, which is why our national fuel poverty programmes will continue to support better insulation and other improvements to homes in, or at risk of, fuel poverty.
  • We have established a statutory Scottish Fuel Poverty Advisory Panel to undertake the statutory duties to monitor, advise on and challenge our progress on ending fuel poverty, and to advise on the impacts of actions by others on fuel poverty and extreme fuel poverty across Scotland.
  • We will ensure ongoing regard for The National Islands Plan (Objective 5 - to reduce levels of fuel poverty; and Objective 9 - work towards creating net zero emission islands and providing global climate change leadership).
Whole house retrofit and the suitability of standard energy efficiency measures and requirements for traditionally constructed buildings.
  • We know that these properties will face specific challenges in meeting the new standard, such as the need for specialist building assessment, more specialised installation skills and the use of specific materials. We are proposing to use variations to provide flexibility for traditional and protected domestic buildings. These may include one or a mix of options:
  • Varying the minimum energy efficiency requirement, which would mean that such buildings are not required to install measures that would have a negative effect on the building (or its occupants);
  • Giving the landlord more time to allow the building to be assessed and necessary works agreed, or to secure suitable installers or products;
  • Giving the landlord more time where they cannot secure the necessary permissions or consents to carry out the necessary works.
Availability of the required level of skilled supply chain for installation, and maintenance for clean heating.
  • We published a 'Heat in Buildings Supply Chain Delivery Plan' which provides an overview of Scotland's heating and building improvement sector, and provides background to the challenges and opportunities of developing the supply chain for clean heating.
Consideration of local infrastructure in the roll out of clean heating including availability of national electricity grid and resilience.
  • Scottish Government has worked closely with Local Network companies SSEN and SPEN to ensure that their business plans for the next five years reflect the scale and pace of investment needed to meet net zero.
  • From April 2023 reinforcement costs for demand connections (including heat pumps) will be socialised. A threshold known as the high-cost cap (HCC) will be used to protect customers from excessive costs.
  • Local Energy Scotland manages the Community and Renewable Energy Scheme (CARES), which helps communities to engage with and benefit from the energy transition to net zero emissions. It provides advice and support – including funding – to communities across Scotland, looking to develop renewable energy, heat decarbonisation and energy efficiency projects. This includes
  • – The Off Electricity Grid Communities Fund, which provides a package of support to some of Scotland's more rural off grid communities to help them upgrade their energy systems and decarbonise their energy supplies, with the aim of making them more resilient and sustainable.
  • – The Community Heat Development Programme, which helps eligible community organisations and groups of householders to develop their ideas for locally-generated, clean heating project ideas.
Ongoing community engagement.
  • As part of the consultation process we will work with stakeholders in island communities to ensure that feed in is as widespread as possible. The findings from this will then be fed into the design process for the final standard.

Supporting positive impacts

28. The mitigating actions outlined above will not only help address identified issues and challenges, but enhance the positive impacts heat decarbonisation will bring to islands communities including the following:

  • Opportunities for more niche technologies.
  • Overall we recognise some properties may be more constrained in terms of technology options available, limited by location and property type, proximity to the gas network, impact on the fabric of historic buildings, space constraints, and capacity of the electricity grid. Such considerations may be factored into variances within the new standard.
  • Opportunities for the local supply chain,
  • Harness the opportunity for development of skills and jobs within island communities to deliver change.
  • In 2022 we published a Heat in Buildings Supply Chain Delivery Plan which provides an overview of Scotland's heating and building improvement sector, and provides background to the challenges and opportunities of developing the supply chain for clean heating.
  • Promoting resilience in islands building stock (by improving the fabric) for future generations,
  • Opportunities for increased thermal comfort and health.
  • The proposals set out in this consultation to improve the energy efficiency of social housing mean that households will use less energy, potentially reduce their bills, and help to cut greenhouse gas emissions. A good standard of energy efficiency also helps the performance of many clean heating systems, such as heat pumps.
  • Protection of the unique natural environment of Scotland's islands and rural communities through climate change mitigation.
  • We will feed in the outlook of island communities into the proposals set out in this consultation in order to achieve our ambition to remove emissions from the way we heat social housing.

Conclusion

29. Prior to publication of the consultation, previous work to assess the impacts of the Heat in Buildings Strategy was reassessed to ensure its continued relevance to these proposals. The material gathered for the Heat in Buildings Strategy include public consultation and continuous engagement with key stakeholders including in the Heat Decarbonisation External Advisory Group.

30. Desktop evidence gathering, consultation with island communities, local authorities and other relevant stakeholders has provided an understanding of the unique island issues in relation to the proposals and potential impact these may have on these communities.

31. Specifically, the Scottish Government will undertake the mitigating actions outlined within this ICIA.

Contact

Email: socialhousingheatdecarb@gov.scot

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