Energy Efficient Scotland: partial business and regulatory impact assessment

4. Scottish Firms Impact Test

4.1 Long-term domestic standard

No face-to-face discussions with business, beyond those mentioned above, on the impact of the long-term domestic standard on Scottish firms have taken place as yet. We have taken into consideration responses from the high-level SEEP consultation in 2017, together with both consultations on LHEES & regulation of district heating regulations, as well as feedback from consumer interest groups such as Citizen’s Advice Scotland which has highlighted specific concerns around cold calling, mis-selling, shortcomings in consumer protection and in the expected quality standards of installations in the renewable energy, energy efficiency and district heating sectors. This feedback has led directly to a government focus on assuring quality and skill in the supply chain to protect customers, alongside the development of a framework to monitor and evaluate the delivery of Energy Efficient Scotland at both national and local levels.

A short-life working group is actively looking into Quality Assurance, Consumer Protection, Skills and the Supply Chain. This group will take in representatives from across industry, consumer organisations and enterprise and skills agencies. They will consider (amongst other topics), the current capacity and capability within the supply chain, how to assess and address the barriers that industries, both small and large, face in successfully participating in reaching the long-term domestic standard and how best to promote the opportunities available to SMEs and help ensure that participation is financially viable.

We will be engaging with the relevant bodies and stakeholders on the development of our monitoring and evaluation framework to ensure that it meets a range of needs, including those of Scottish firms.

4.2 EESSH2

Stakeholder engagement was paramount as the proposals set out for EESSH2 were developed. Members of the Review Group, as well as the sub-groups (Level and Measurement, Funding and Costs, Health and Affordable Warmth and Innovation and Technology) established to consider different elements of the proposals, made a significant contribution as proposals were refined.

At the latest Review Group meeting of 19 March, agreement was reached for consultation on EESSH2 based on the proposals and milestones for activity post-2020 as set in the consultation document. Bi-lateral face to face discussions were also conducted with social landlord representative bodies ( SFHA, GWSF and CoSLA), and all agreed that the consultation should go ahead on this basis.

4.3 LHEES and District Heating

The face-to-face engagement with business so far has been a combination of workshop activity and bilateral meetings all of which, together with responses from our two consultations, has directly fed into the development of our proposals. This process has been ongoing since 2016 when stakeholders representing a variety of interests (from local authorities to industry and business to consumer groups) informed the initial high level policy scoping consultation published in January 2017.

They further advised on potential regulatory scenarios for district heating and for the introduction of LHEES. The stakeholders involved in these face-to-face engagements comprised the Short Life Working Group on Heat Regulation. This group further supported and encouraged the Scottish Government to develop the policy proposals set out in the ‘Second Consultation on Local Heat & Energy Efficiency Strategies, and Regulation of District and Communal Heating’(November 2017) which included specific impact-focused questions.

A programme of full-day workshop events around the country took place during both the first and second LHEES & regulation of district heating consultations, all of which featured presentations on the detailed proposals from Scottish Government officials; presentations on the proposals and potential impact from experts representing key stakeholders (with consumer and industry perspectives provided by among others, the Association for Decentralised Energy; the Heat Trust; Aberdeen Heat and Power; Citizens Advice Scotland; and various Local Authorities); and focussed group discussion from which the views gathered were collated to further augment the independent analysis of consultation responses.

Stakeholders across the board have engaged constructively throughout the process and at every stage have continued to highlight the significant potential opportunities the proposals around LHEES and district and communal heating offer for job creation, both on a national level across business and in respect of the local skills and supply chain. Furthermore the proposals for a consistent and strategic approach to zoning across local authorities, combined with the innovative functions of LHEES (such as acting as an ‘investor prospectus’ where local authorities have identified suitable projects) will provide visibility and encourage confidence in the market that will be reflected in investment on both a local and a national level.