Energy Efficient Scotland: route map

Chapter 1: Programme Vision and Objectives

Our Vision By 2040 Our Homes And Buildings Are Warmer, Greener And More Efficient

Introduction

Scottish Ministers designated energy efficiency as a national infrastructure priority in 2015, recognising the many benefits delivered by improving our buildings. Energy Efficient Scotland sees us delivering on our commitment.

Improving the energy efficiency of our buildings will reduce our energy consumption leading to reduced greenhouse gas emissions

Energy efficiency is at the heart of Scotland’s new Energy Strategy and Climate Change Plan – underpinning the Scottish Government’s ‘whole-system’ approach to decarbonisation.

Energy efficiency has been a long term priority for the Scottish Government – by the end of 2021, we will have allocated over £1 billion pounds since 2009 on tackling fuel poverty and improving energy efficiency. Energy Efficient Scotland builds on our existing, well established and successful schemes.

Achieving our vision will take time. That is why Energy Efficient Scotland is a 20 year programme containing a set of actions all aiming to make Scotland’s existing buildings near zero carbon wherever feasible by 2050. And to do so in a way that is socially and economically sustainable, reaping the benefits for all those living and working in Scotland. By 2040, the Programme will have transformed the energy efficiency and heating of Scotland’s buildings, making our existing homes, shops, offices, schools and hospitals more comfortable and easier to heat.

What the Programme will do

Until the mid-2020s, the Programme will focus on improving the energy efficiency of Scotland’s existing buildings, as well as continuing to support the deployment of low regrets, low carbon heat options (such as individual renewable heat technologies for those buildings not connected to the gas grid or heat networks where they make sense).

The future shape of the gas and electricity networks will impact on Energy Efficient Scotland and our approach to decarbonising heat. It is important the Programme can adapt to any changes, including network changes. In the mid-2020s, there will be the first of a series of Programme reviews. This review will take into account the developing local energy systems in Scotland, as set out in Scotland’s Energy Strategy ^[14] as well as the decisions made by the UK Government on areas where it has legal competence, particularly the mains gas network and the electricity network. The Programme will then be able to take into account the implications of the UK decisions in determining its approach to rolling out low carbon heat beyond the mid-2020s.

The Programme’s focus is on improving the energy efficiency of existing buildings, it will not extend to new buildings.

Whilst Energy Efficient Scotland is focussed on the energy efficiency of buildings we know that in the non-domestic sector the energy used in manufacturing is just as important. That is why we are aligning our activity in the industrial sector with wider advice and support on how to reduce energy consumed on sites for productive processes.

The Programme and Behaviour Change

As well as improving the energy efficiency of Scotland’s buildings it is equally important the Programme supports the occupiers of the improved buildings to run the buildings as effectively and efficiently as possible, getting the most out of the improvements.

Behaviour change is already part of our energy efficiency programmes and it will continue to be as the Programme is rolled out. The Scottish Government currently funds Home Energy Scotland and Resource Efficient Scotland who provide free, impartial advice to property owners including on energy saving behaviours such as heating system management. Behaviour change advice is also embedded into our domestic area based schemes to help households maximise the benefits of energy efficiency improvements. During the Transition Programme we will continue to develop and trial new innovative approaches.

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Promoting Decarbonisation of Heat

Emissions From All Buildings in Scotland Will Need to Near Zero By 2050

Our Climate Change Plan Sets Out A Trajectory to 2032 Which Requires:
35% of Domestic And
70% of Non-Domestic Buildings
Heat To Be Supplied By Low Carbon Technologies

Reduction in Domestic Buildings' Heat Demand By
15%
Through Improvements To The Building Fabric By 2032

Reduction in Non-Domestic Buildings' Heat Demand By
20%
Through Improvements To The Building Fabric By 2032

This Is Supported By Our Long Standing Target That Will See 11% Of Non-Electrical Heat Demand To Be From Renewable Sources By 2020.

To support our ambitions we have a range of support measure in place

• Low Carbon Infrastructure Transition Programme ( LCITP) - financial support for low carbon projects covering a wide range of technologies, including of low carbon and renewable heat.
• Since March 2015, LCITP has already offered over £40 million of funding to 16 low carbon demonstrator projects supporting low carbon energy generation and supported the co-development of over 30 proof of concept and development proposals.
• The District Heating Loan Fund helps address the financial and technical barriers to district heating projects.
• Since 2011 just under £13 million offered to 45 projects across Scotland.
• The Scottish Government actively promotes the GB-wide Renewable Heat Incentive ( RHI) scheme - uptake in Scotland is much higher pro-rata at 20% of the total accreditations for Great Britain.
• SME Loan Scheme low or no cost loans to business up to £100,000 for the installation of efficiency measures and renewable technologies via Resource Efficient Scotland ( RES). Since 2008, the SME Loan Scheme has financed over 800 projects resulting in estimated heat and electricity energy savings of 339 GWh, carbon savings of over 130 ktCO ₂ and financial savings of over £36 million.
• The Home Energy Scotland Loan Scheme provides interest-free loans up to the value of £35,000 for both energy efficiency measures and renewable technologies via the Energy Saving Trust ( EST). There have been 1,325 loans offered from the Scottish Government under the HES Loan scheme since it was launched in May 2017 and the value paid out from the Scottish Government through the HES Loan Scheme to date totals £3.4 million.

Case Study - Wick

In June 2012, Ignis Wick Ltd (the operating subsidiary of Ignis Biomass Ltd) purchased the assets of the Wick District Heating scheme, and took over its operation from Highland Council. Ignis Wick invested £2.5 million in a new biomass steam boiler and associated modifications, to replace the existing oil fuelled boiler. This investment in wood fuel supply reduced fuel costs and secured the heat supply to 165 homes and the adjacent Old Pulteney whisky distillery. The wood fuel is supplied from local woodlands, creating significant investment in the economy of Caithness. Skilled jobs will be secured in forestry and in support services as a result.

Ignis continued to invest in the network, with assistance from the Scottish Government’s District Heating Loan Fund. The heat network now supplies over 200 domestic customers (of which over 90% are social housing) with low cost heat, as well as a care home, the Highland Council’s Assembly Room and the distillery. It was recently announced that Caithness General Hospital will join the network, adding further security and cost benefits.

In March 2016, the Green Investment Bank and Equitix announced their acquisition of Ignis Biomass Ltd. Plans are in place to upgrade existing infrastructure as well as commission a number of smaller-scale stand-alone CHP systems for major users in and around Wick.

The Programme Objectives

Why we need the Programme

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23% Emission Reductions In The Domestic Sector By 2032 On 2015 Levels

59% Emissions Reduction In The Non-Domestic Sector By 2032 On 2015 Levels

Removing Poor Energy Efficiency As A Driver Of Fuel Poverty

The Programme delivers across two key policy areas of Government: fuel poverty and climate change. Because of this it has two main objectives:

• supporting the eradication of fuel poverty, by removing poor energy efficiency as a driver of fuel poverty
• reducing greenhouse gas emissions through more energy efficient buildings and by decarbonising our heat supply.

As set out in our recent consultation on a new fuel poverty strategy for Scotland we are committed to removing poor energy efficiency as a driver of fuel poverty.

As well as being one of the six strategic priorities in our Energy Strategy Energy Efficient Scotland also supports our ambitious targets to reduce greenhouse gases ^[15] . These ambitious targets will see emissions reductions in the residential and services sectors of 23% and 59% respectively by 2032 on 2015 levels. Our Climate Change Plan, published in February 2018 ^[16] , sets out the policies and proposals that will keep Scotland on course to achieve the 2050 target of cutting total greenhouse gas emissions by 80%. To achieve this, emissions from all buildings in Scotland will need to be near zero where feasible by 2050. The Plan also sets out that by 2032, improvements to the building fabric of domestic and non-domestic buildings will result in a 15% reduction in domestic heat demand and 20% reduction in non-domestic heat demand respectively.

Later in 2018, the Scottish Government will introduce a new Climate Change Bill with even more ambitious targets than those set in the Climate Change (Scotland) Act 2009. This will see Scotland becoming one of the first countries in the world to legislate to support the aims of the Paris Agreement.

The benefits of the Programme

In achieving our objectives, we will be delivering multiple benefits. Investment in improving the energy efficiency and decarbonising the heat of Scotland’s buildings will:

• put more money in people’s pockets by helping to keep bills affordable – supporting our ambitions to eradicate fuel poverty.
• improve business competitiveness by making sure every pound spent on energy is maximised in productivity.
• substantially reduce greenhouse gas emissions contributing to meeting our ambitious climate change targets.

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Every £100 Million Spent On Energy Efficiency Improvements In 2018 Is Estimated To Support Approximately 1,200 Full Time Equivalent Jobs Across The Scottish Economy

Boost GDP, With Research Showing A 10% Improvement In The Energy Efficiency Of All Uk Households Will Sustain GDP Expansion Of Around 0.16%

£10-12 Billion To Be Invested In Energy Efficiency Measures

Investment In Energy Efficiency Tosupport Our Ambitions To Eradicatefuel Poverty And Increase Wellbeing

• boost GDP, with research showing a 10% improvement in the energy efficiency of all UK households leads to a sustained GDP expansion of around 0.16%. ^[17]
• help create a substantial Scottish market and supply chain for energy efficiency services and technologies. Every £100 million spent on energy efficiency improvements in 2018 is estimated to support approximately 1,200 full-time equivalent jobs across the Scottish economy ^[18] .

• deliver health, wellbeing and early years improvements through warmer homes.
• help regenerate our communities through upgrading building stock.

How we will achieve our objectives

We have made significant progress in improving the energy efficiency of our buildings but more needs to be done if we are to achieve our vision and maximise the benefits. To achieve our two key objectives we are proposing setting long term mandatory energy efficiency standards for all buildings in Scotland to reach by 2040.

We are proposing that this is achieved in a phased way, recognising different domestic and non-domestic building sectors have different starting points and will be improved at different paces. For example, homes within the social rented sector already have to meet an energy efficiency standard which means in general their performance is the best in the domestic sector.

These standards will be reached through a mix of encouragement and regulation that will vary across sectors, as well as encouraging and supporting low carbon heating, including district heating. We will also provide advice and support to help achieve the standards.

In improving the energy efficiency of buildings through the Programme we know that building condition is important. Energy efficiency measures can be ineffective because of building disrepair and we know that it will sometimes be necessary to improve the condition of the building in advance of or alongside energy efficiency improvements.

As we further develop the Programme we will be considering disrepair as part of our planned work on assessment and quality assurance.

We also recognise that traditionally constructed buildings account for a significant percentage of our building stock and they are an important part of Scotland’s historic environment and cultural heritage. It is important that the Programme takes account of the specific characteristics of these buildings and helps to maintain and enhance these buildings.

As we develop and deliver the Programme we will continue to work with our partners, including Historic Environment Scotland and local authorities, to ensure that it helps to maintain and improve the energy efficiency of our traditional buildings without diminishing their contribution to our sense of place and cultural identity.

Energy Efficiency Scotland Consultations

We have been working closely with partners during the development of this Route Map, through a number of forums. It has also been informed by the following consultations:

• Scotland’s Energy Efficiency Programme ^[19]
• Scottish Energy Strategy: The Future of Energy in Scotland ^[20]
• Consultation On Heat & Energy Efficiency Strategies, and Regulation of District Heating ^[21]
• Energy efficiency and condition standards in private rented housing ^[22]
• Fuel Poverty Strategy Consultation ^[23]
• Second Consultation on Local Heat & Energy Efficiency Strategies, and Regulation of District and Communal Heating ^[24]

To help inform the on-going development of the Programme this Route Map is accompanied by two consultations on further key areas of work that we will take forward with our partners over the next two years, ahead of the Programme being fully in place from 2020.

Principles

In developing the Programme we are embedding the following seven principles that will guide our decisions on policy and delivery.

Provide long term stability and certainty
Be transformational, removing poor energy efficiency as a driver of fuel poverty and decarbonising our heat supply
Be well known and trusted, maintaining quality and high standard installations
Operate throughout Scotland and be delivered to meet local needs
Ensure that heated buildings are comfortable to use, live and work in
Support jobs across Scotland
Attract investment in energy efficiency and low carbon heat

Summary

This Route Map accelerates our work on energy efficiency as committed to in the Programme for Government 2017 and sees us:

• Putting in place a national infrastructure programme to deliver energy efficiency and heat decarbonisation, continuing to meet our commitment to invest at least £0.5 billion over the four years to 2021.
• Launching the Energy Efficient Scotland Transition Programme, where we are continuing to work with local authorities on the development of LHEES that we hope will shape future local delivery programmes on energy efficiency and heat decarbonisation.
• Launching our consultation on setting a long term energy efficiency standard for all domestic properties, with higher non-mandatory targets for households in fuel poverty.
• Launching our consultation on proposed new standards for social housing.
• Confirming the introduction of new energy efficiency standards in the private rented sector, ensuring that tenants are living in homes that are warmer and more affordable to heat.
• Setting out our proposed approach to improving our non-domestic buildings.

Navigating the Route Map

In the following chapters, this Route Map sets out the actions we will take to improve the energy efficiency of Scotland’s buildings ( Chapter 3); how we will support delivery on the ground ( Chapter 4); the steps we will take to protect consumers ( Chapter 5); our actions to develop and support the supply chain ( Chapter 6); and how we will monitor and evaluate the programme ( Chapter 7). The final chapter outlines the potential legislative provisions that we are considering to support the programme, including the potential for an Energy Efficient Scotland Bill if needed.

We know that publishing this Route Map is just the beginning. We know that things will change and to reflect these changes the Route Map will be a ‘living’ document. We will be regularly evaluating the impact of the Programme and will take into account changes in policy and technology and adapt our plans. We will be issuing updates of the Route Map in 2019 and 2020 and then at regular intervals following reviews of the Programme progress.