Energy Efficient Scotland Phase 2 pilots: final social evaluation report

4. Conclusion

This report has presented a social evaluation of the Energy Efficient Scotland Phase 2 pilots. The Phase 2 pilots, coordinated by Scottish Government, took place between September 2017 and March 2019. The pilots form a part of the development of broader Energy Efficient Scotland programme, following from the Phase 1 pilots, which have been evaluated separately^[11]. The Phase 2 pilots sought to support further capacity building within local authorities, with a focus on:

• Hard-to-treat buildings
• Strategies for engaging the self-funded market
• Innovative technologies
• Area-based approaches

Capital works thus included efforts to extend existing district heating schemes, improving the thermal efficiency of private dwellings, and implementing LED lighting and BMS into non-domestic buildings. The non-domestic buildings treated were primarily council-owned (for examples, schools and museums). Engagement strategies included mail-out to residents, but also the development of community hubs. This evaluation draws on evidence from interviews conducted with all of the teams taking part in the nine Phase 2 pilots. The interviews were carried out at the beginning and end of the pilots, and they explored organisational aspects of the pilots, including: pilot content; partnership working and procurement; skills and resources for delivery; and perceptions of the broader Energy Efficient Scotland programme. A socio-technical evaluation, including the analysis of social surveys and technical monitoring in treated buildings, will be published in mid-2020. This report has explored 6 themes: the selection of projects; pilot outcomes; pilot delivery; funding; engagement; and lessons for the broader Energy Efficient Scotland programme. 

Pilot teams were able to identify projects to fit within the scope of Scottish Government’s call, and projects were often shaped by work taking place within existing local authority strategies, including: SEAP, LHEES and EESSH. Early engagement in the pilot process was helpful; however, prior work on Energy Efficient Scotland pilots also led project teams to specify more straightforward projects, which were deemed to be feasible in the timeframe and budget provided. This strategy is understandable, but in order to deliver the Scottish Government’s ambitious 2045 climate targets, it will be essential to develop Energy Efficient Scotland so that it is supportive of more complex, ambitious projects.

Indeed, the pilots that sought to tackle hard-to-treat building and those with a combination of public and private sector occupants experienced significant delays. Two of these had still not commenced capital works at the time of the second evaluation interview, whilst works on another were just getting underway. Despite this, the Phase 2 pilots did deliver positive outcomes, including:  leveraging additional funding; providing foundations for further work; and there was anecdotal evidence of energy and cost savings. The pilots also allowed local authorities and project partners to begin exploring the extension of their existing roles, for example, as heat network owners and energy suppliers. Complexities in the regulation and management of this led one authority to limit their provision to just council-owned housing stock; further support for this would be beneficial in the wider roll-out of Energy Efficient Scotland.

The pilots were delivered through a combination of local authority leadership and partnerships with ALEOs and third sector organisations. Participants often worked with organisations they had prior relationships with, and reported comfort in the partnership arrangements used for the pilots. This expertise and continuity offered by developing internal expertise may be crucial for delivering the Energy Efficient Scotland programme, which will need a consistent and clear approach over the next 20 years to deliver energy efficiency and heat decarbonisation over a short timeframe. There is unlikely to be time for repeating training and education of new staff and partners as the speed of delivery ramps up. There were more significant challenges in procuring contractors to complete capital works, these included: identifying contractors with suitable expertise for hard-to-treat buildings; a lack of capacity amongst smaller contractors to engage in the pilots at short notice; communication with new contractors. For the roll-out of Energy Efficient Scotland, it will be crucial to support the development of supply chains. This indicates a need to bring more skilled people into the energy efficiency business supply chain, with training for high standard of retrofit work but also skills in managing hard-to-treat buildings and large-scale infrastructure projects (like GSHP and District Heating). In addition, Scottish Government must provide clarity and continuity about future funding and work opportunities for supply chain actors. 

The Phase 2 pilots which treated authority-owned and single buildings delivered works within the budget and timeframe available. However, there were significant funding shortfalls on more complex and innovative projects. In some cases, this led pilot teams to limit the ambition of their project, for example, not including activities to support the longevity of the scheme. This short-term focus may create false economies, and result in increased financial investment in the longer term. Multiple funding sources were used to complete the proposed works; however, securing match funding after the pilot funding had been confirmed could result in significant project delays. In addition, multiple funding sources were needed for different aspects of the work (for example, heating was funded separately to energy efficiency); this resulted in complex project management and reporting requirements, and should be avoided to support future, holistic retrofitting.

Existing financial support for householders was deemed to be complex to secure. In particular, the HES Loan was cited as a large barrier to householders undertaking retrofit because it still requires them to have an upfront payment for the retrofit activities. Working on whole-building retrofit where there are multiple owners and occupiers (for example, a tenement building), and multiple funding sources, was a highly complex and time consuming task. Engaging with private householders and businesses will require long-term, repeated interaction. The Energy Efficient Scotland Phase 2 pilots have supported the development of these skills within project teams; lessons from these activities need to be shared and this work needs to be recognised within future funding (rather than only supporting capital works, for example). 

Key Lessons:

• Longer timeframes will be needed to support holistic retrofitting of complex hard-to-treat buildings
• Local authorities will require further support if, through Energy Efficient Scotland, their roles extend as network owners and suppliers, for example in developing heat supply agreements
• Scottish Government must provide clarity and certainty in the funding and roll-out of Energy Efficient Scotland, to support readiness amongst supply chains.
• A clear long-term funding trajectory, including the types of works that will be supported, needs to be provided. This is particularly critical for cross-sector retrofit, and hard-to-treat buildings.
• Scottish Government need to explore how to streamline existing funding sources to support holistic, area-based retrofitting and heat decarbonisation.
• Broader engagement, and subsequent investment in private retrofit, will require long-term, repeated interaction with householders and businesses. Energy Efficient Scotland funding needs to reflect this, and support the development of skills for householder engagement and the management of retrofit involving multiple stakeholders.
• There needs to be a clear structure to support information sharing and subsequent capacity building amongst local authorities and project partners.