Delivering net zero for Scotland's buildings - Heat in Buildings Bill: consultation

4. Connecting to Heat Networks

4.1 Heat networks are one of the clean heating systems that people will be able to use to comply with the Heat in Buildings Standard.

4.2 Heat networks generate heat and use a network of pipes to supply it to nearby homes, businesses, and public buildings. The heat can be generated in different ways, depending on the resources and assets available in the area. This could be through heat pumps that draw thermal energy from a local river, or from the recovery of excess heat from local businesses like distilleries, or in many other creative ways we have seen across Europe.

4.3 All heat networks will be required to generate most of their heat from renewables or bioenergy by 2045, so they are one of the systems that some of us will be able to use that meet the Heat in Buildings Standard. Several studies have examined the potential for heat networks in Scotland, and while they provide different estimates over different timescales, they all show that we could see significant growth in these schemes^[23].

4.4 We want and need to see this growth. There is a well-established supply chain for heat networks within Scotland, the wider UK and Europe that is capable of building and operating these systems, with additional transferable skills in Scotland, while homes and non-domestic premises which connect to them can usually spread the upfront costs of connection over a number of years.

4.5 There are only around 30,000 homes and 3,000 non-domestic premises connected to heat networks in Scotland just now, and while we have over 1,000 individual heat networks, these are typically very small. We know that there is significant interest from local authorities and private investors in owning and operating heat networks, and we must do more to attract this investment if we are to fulfil the potential that the sector has in Scotland and create a sustainable market.

4.6 This will need local authorities or private financers to be confident that homes and especially non-domestic buildings will connect to a proposed heat network project. That is why we are proposing to:

Provide local authorities and the Scottish Ministers with powers to require buildings within a Heat Network Zone to end their use of polluting heating systems (by a certain date, and with a minimum notice period).

4.7 In practice, this would mean that a local authority could, for example, notify a local public sector organisation, a large commercial building owner, or those living in a block of flats that they are required to end their use of polluting heating within a given period of time. These powers could be used in relation to multiple buildings in an area, and where the opportunity for a heat network rests on their connection.

4.8 It may be that the requirement applies to different buildings at different times, consistent with the gradual construction of the heat network itself.

4.9 The benefits of these proposals are twofold:

• Firstly, a heat network developer would know which buildings would be required to transition from polluting heating, and by when – allowing the developer to confidently design and construct the ‘spine’ of a network accordingly. This is important, as the spine of a network can be costly, time-consuming and disruptive to install and so should ideally be done at once. When it is installed, it becomes relatively easy and affordable to extend the network to connect other areas in future.
• Secondly, building owners required to look for alternative heating systems are far more likely to join the heat network. This will provide greater assurances to investors about the revenue that a new heat network is likely to receive, which will help convince them in turn to make that investment decision and to reduce the cost of finance. This can lead to lower costs of heat to homes and businesses as end users.

4.10 We are proposing that any buildings within a Heat Network Zone will not need to meet the Heat in Buildings Standard following a property purchase (as described in Chapter 3). This is to preserve the business case for a new heat network development by ensuring that buildings which are likely to connect are not forced to adopt another system before time. These homes and non-domestic buildings will be required instead to meet the Heat in Buildings Standard when a heat network becomes available – either by connecting to the network or by choosing to install another clean heating system.

4.11 While this consultation is focused on existing buildings, we set out in the Heat Networks Delivery Plan^[24] that new buildings within a Heat Network Zone should also connect to a heat network where available. We will therefore investigate whether the Heat in Buildings Bill could also:

Provide powers to local authorities or the Scottish Ministers that require developers to connect new buildings within Heat Network Zones to a heat network.

4.12 These provisions will combine to attract the private investment in heat networks that is necessary to achieve development at the pace and scale needed.

4.13 By the end of 2023, your local council may have published its Local Heat and Energy Efficiency Strategy (LHEES). One of the main things these Strategies will do is identify where the clearest and most obvious heat network opportunities are in your local area.

4.14 For example, Glasgow City Council^[25] and Fife Council^[26] have already published draft LHEES. While these are not yet finalised and are subject to adoption by the leadership in those Councils, they help to show how you could learn whether or not your area is likely to be served by a heat network (and so become subject to the proposals in this Chapter). While the LHEES are an important first step, then, we also expect that individual property owners will be informed directly whether they are in a heat network zone, and will develop processes to ensure that this happens.

4.15 We are also exploring the potential to introduce a new duty on public sector organisations to connect the buildings that they own to a local heat network, and will consult on this separately in due course.

Waste heat

4.16 As discussed earlier, the heat provided through heat networks can be generated from a range of sources, including ‘excess’, ‘surplus’ or ‘waste’ heat that can be recovered from local business or assets. These can include heat produced by distilleries and data centres, or in sewers and incinerators.

4.17 We want to make sure that recoverable heat is considered when designating Heat Network Zones, and so we may use existing powers to place conditions on heat network operators concerning the use of waste heat. However, there remains no legal requirement to provide such heat and limited incentives to do so. There are also very limited data on the scale and location of potential waste heat resources.

4.18 We think that waste heat is an underused resource; if it can be fed into a heat network at low cost has the potential to increase the number of viable heat networks across Scotland (including potentially in rural areas), as well as to reduce the costs charged to connected homes and non-domestic premises.

4.19 That’s why we are considering using the Heat in Buildings Bill to:

Require occupiers of non-domestic properties to provide information about unused heat on their premises (on request and in confidence); and

Potentially require buildings with unused heat to provide this to a local heat network (where that would be cost-effective).

Questions on Chapter 4 - Connecting to Heat Networks

Q14. To what extent do you support our proposal to provide local authorities (and Scottish Ministers) with powers to require buildings within a Heat Network Zone to end their use of polluting heating systems by a given date?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q15. To what extent do you support our proposal to provide powers to local authorities (or Scottish Ministers) that require developers to connect new buildings within Heat Network Zones to a heat network?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q16. To what extent do you support our proposal to require occupiers of non-domestic properties to provide information about unused heat on their premises?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.

Q17. To what extent do you support our proposal to potentially require buildings with unused heat to provide this to a local heat network?

Strongly support

Somewhat support

Neither support nor oppose

Somewhat oppose

Strongly oppose

Don’t know

Please include any additional comments below.