Heat networks delivery plan - draft: consultation

Chapter 1: Introduction

Early this year the Scottish Parliament passed the Heat Networks (Scotland) Act 2021 (hereafter referred to as the "2021 Act") creating for the first time in Scotland, and the United Kingdom, legislation intended to support and encourage the development of communal and district heat networks.

Heat networks are an established technology and are common in the Nordic countries and across much of Northern Europe. In Scotland they are currently less common and at present^[1] there are an estimated 1,080 heat networks supplying heat to domestic and non-domestic properties. Around 30,000 homes and 3,000 non-domestic properties are connected to heat networks. The latest figures suggest that heat networks in Scotland supply upwards of 1.18 TWh of heat.^[i]

What is a heat network?

Heat networks, as defined under the 2021 Act, include both district and communal heating:

• a district heat network is defined as a network by which thermal energy is distributed from one or more sources of production to more than one building
• a communal heating system is a system by which thermal energy is distributed from one or more sources of production to one building comprising more than one building unit

A heat network, despite its name, can provide both heating and cooling. Heat networks operate at a range of temperatures: third and fourth generation systems generally provide hot water at between 60 and 100 degrees Celsius and fifth generation systems generally operate at temperatures of up to 45 degrees Celsius. They can also provide steam for industrial processes.

Heat networks, depending on their fuel source, can help reduce greenhouse gas emissions. They can also, in certain circumstances, reduce energy bills helping to tackle fuel poverty. As such heat networks have an important role to play in meeting the targets set out in the Heat in Buildings Strategy,^[ii] including contributing to ensuring that at least 1 million homes, and the equivalent of 50,000 non-domestic buildings are connected to zero emission heating systems by 2030.

How big a role, beyond the 2030 target of the 2021 Act, will depend on a number of factors including location and viability relative to other zero emission solutions. However, the recent report Opportunity Areas for District Heating in the UK^[iii] estimated that by 2050 heat networks may be suitable for providing up to 28% of heat demand in Scotland.

Heat networks are a heat supply technology and can be powered by a range of different technologies. For example, they can use heat generated from gas or biomass fired combined heat and power (CHP) engines, electrically driven heat pumps or utilise surplus or waste heat such as from industrial processes, data centres or from Energy from Waste facilities. The design of heat networks enables new heat sources to be added in the future. As such, heat networks are a low or no regret technology and compatible with both electrification and hydrogen scenarios for heat supply in the future. Heat networks can also have an important role in balancing wider energy networks, helping to store energy and make use of constrained renewable electricity generation.

Section 93 of the 2021 Act requires Scottish Ministers to prepare a heat networks delivery plan, setting out how the provisions of the 2021 Act, and any other supporting policies, will contribute to increasing the use of heat networks in Scotland. Specifically, a heat networks delivery plan must set out:

• the approach the Scottish Minsters intend to take to increase the use of heat networks in Scotland
• how the Scottish Ministers propose to meet the targets specified
• how output from heat networks will be measured
• how the deployment of heat networks will contribute to meeting emission reduction targets

Impact assessments

Alongside consultation on the draft Heat in Buildings Strategy we have been working with stakeholders to develop a series of impact assessments, which have been published recently:

• equality impact assessment (EQIA)^[iv]
• islands communities impact assessment (ICIA)^[v]
• fairer Scotland duty (FSD)^[vi]
• child rights and wellbeing impact assessment (CRWIA)^[vii]
• business and regulatory impact assessment (BRIA)^[viii]

We will take them into account as we continue to develop the HNDP.

For the Heat in Building Strategy we also conducted a Strategic Environmental Assessment to identify the likelihood of significant environmental impacts – positive or negative – that could arise from the policies and programmes covered by the Strategy. This included the production of an Environmental Report which was published during the consultation phase. We will publish a Post Adoption Statement, setting out how the findings of the Environmental Report and consultees' views on both the Environmental Report and draft Strategy, have been taken into account in the finalisation process. This will be published as soon as possible, and made available through the SEA Database.

An Island Communities Impact Assessment^[ix] and an Equalities Impact Assessment^[x] were also published during the passage of the Heat Networks (Scotland) Bill.

We will assess whether there is need for additional impact assessments beyond those carried out for the Heat in Buildings Strategy and the Heat Networks (Scotland) Bill during the consultation phase of this work.

As we deliver the policies set out in the draft HNDP, we will give due regard to equalities, and shall not unfairly discriminate based on any protected characteristics, or particular challenges faced as a result of geography or connectivity (such as on islands).

Q1: In your opinion, could any of the proposals set out in this plan unfairly discriminate against any person in Scotland due to a protected characteristic? (Protected characteristics are age, disability, sex, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief.)

Q2: In your opinion could any of the proposals set out in this plan have an adverse impact on children's rights and wellbeing?