Energy Efficient Scotland: strategic environmental assessment

Non-Technical Summary

What is Energy Efficient Scotland

Scottish Ministers announced in June 2015 that they would take long-term action to reduce the energy demand of, and remove carbon from (decarbonise) the heat supply to, our residential, services and industrial sectors, and designated energy efficiency as a national infrastructure priority. ^[1]

Most recently, in December 2017, Scottish Ministers published 'The future of energy in Scotland: Scottish energy strategy', a ground breaking first energy strategy for Scotland which sets out the Scottish Government's vision for the future energy system in Scotland. This strategy sets a vision to achieve by 2050 'A flourishing competitive local and national energy sector, delivering secure, affordable, clean energy for Scotland's households, communities and businesses'.

This strategy recognises that we cannot be entirely certain what our energy system will look like by 2050, so sets ambitious targets for 2030 which supports the principle of the pursuit of low or no regrets options to set us on the right path to the low carbon future:

• The equivalent of 50% of the energy for Scotland's heat, transport and electricity consumption to be supplied from renewable sources;
• An increase by 30% in the productivity of energy use across the Scottish economy.

Energy Efficient Scotland (the Programme) is a key part of this and is being rolled out during 2018. It is a 20 year programme aimed at driving energy efficiency and a low carbon energy system in Scotland's homes and buildings. This It will run for 20-years and brings to life one of the six energy priorities as set out by our Scottish Energy Strategy: that of improving energy efficiency.

This programme will contribute to achieving these ambitious climate change targets, whilst continuing to help tackle fuel poverty and ensuring Scotland is a good place to do business. It will be a coordinated programme to improve the energy efficiency of homes and buildings in the commercial, public and industrial sectors and to decarbonise heat supply.
In conjunction to the targets set by the Energy Strategy, the Climate Change Plan outlines the steps we will take to reduce emissions across the economy, including in the residential and services sectors, which will see their emissions reduced by 23% and 59% respectively by 2032 on 2015 levels.

Achieving these targets will mean that to be fit for the future Scotland's homes, commercial properties and public sector estate will need to be near zero carbon where feasible by the middle of this century. Scottish Ministers announced in June 2015 that they would take long term action to reduce building energy demand and decarbonise heat supply; designating energy efficiency as a national infrastructure priority. The Programme is the culmination of this thinking.

The initial phases of the Programme are focusing on delivering existing programmes more effectively and developing new pilot schemes to test delivery mechanisms for residential and non-domestic buildings. By 2050, through the Programme, aims to transform the energy efficiency and heating of our buildings so that wherever feasible, buildings will have near zero carbon emissions.

Phase 1: Design	Drafting of Climate Change Plan and the Energy Efficiency Strategy The evaluation of Delivery Scenarios Publication of the Routemap in 2018
Phase 2: Development	Design and development of standards for the energy efficiency of buildings across all sectors and tenures with clear timescales Delivery/funding mechanisms – including a range of funding including grants and loan schemes Advice and information to ensure that both domestic and business customers are able to access appropriate, clear and up to date advice on both their requirements, the options open to them and the potential benefits Phased deployment (including optional and compulsory modifications to standards, funding/delivery mechanisms and advice)
Phase 3: Deployment	Monitored and evaluated on a five year cycle

The publication of the Routemap is the culmination of works undertaken to date and marks the transition from strategic statements on energy efficiency to a set of clearly identified actions which will be undertaken during the course of the next 20 years to improve the energy efficiency of Scotland's building stock. It sets out the journey homes, businesses and public buildings will take to become more energy efficient and will guide the decisions that Scottish Government will be making, with its partners, over the next 20 years It sets out the long-term ambitions to improve the energy efficiency and a timeline to achieve them.

Moving forward, the Programme now frames its work around a number of key areas:

1. The setting and implementation of long term standards for both domestic and non-domestic sectors, introduced using a phased approach, with a backstop date of 2040 for all buildings in Scotland;

2. As part of the broader work on long term standards, the setting of a revised Energy Efficiency Standard for Social Housing ( EESSH );

3. Local Heat & Energy Efficiency Strategies ( LHEES ) to provide a strategic framework for delivery of the Programme at a local level, and a new approach to regulation of district heating that creates a more attractive climate for investors and consumers with the intention of further expanding this source of heating across Scotland;

4. A revised approach to heating systems in existing buildings, with the phased removal of support for high carbon forms of fossil fuel heating from 2020;

5. An Offer to all which will provide a variable rate of advice, information, support and direct delivery for everyone in Scotland. The Offer will be fully mobilised by 2020;

Proposals 1-3 above are the subject of this assessment.

What is Strategic Environmental Assessment ( SEA)?

Strategic Environmental Assessment ( SEA) is the assessment of the likely significant environmental effects that a public plan, programme or strategy will have on the environment if implemented. The process identifies how environmental damage can be avoided or reduced by suggesting how it can be changed. It also allows the public to give their view on the programme and its potential environmental impacts.

This Environmental Report sets of the findings of the assessment of those aspects of the Programme described above which we have already consulted (but not yet responded), or on which we are currently consulting, in line with the move from design phase to development phase.

The SEA has been undertaken in accordance with the Environmental Assessment (Scotland) Act 2005 (the '2005 Act') and in parallel with the development of these proposals. This iterative process enabled the SEA to inform and influence the development of the documents by considering how the adoption of the policies, policy development milestones and proposals they set out may impact on the environment.

What is the current state of the environment?

Scotland's environment is rich in natural and cultural heritage. Its network of European protected sites supports many important and rare plants, birds and animals. Many biodiversity features are in good condition, but continuing efforts are needed to avoid the further decline of some species and habitats.

Scotland's air, soil and water are generally in good condition, but there are concentrations of pollution in some parts of the country. Current trends suggest that with continuing action, pollution will continue to reduce over time; but there will still be a need for behavioural change to achieve more significant progress in the long term.

Scotland has high quality landscapes, with many iconic views and scenic areas. Our National Scenic Areas ( NSAs) and National Parks require special attention to ensure development does not erode their special qualities. Scotland's wild land areas are set out in the Scottish Natural Heritage ( SNH) 2014 map of wild land. Many areas are recognised as being of regional and/or local importance; forming the backdrop for our settlements and attractive areas for recreation and tourism. Our historic environment includes World Heritage Sites, listed buildings, conservation areas, gardens and designed landscapes and archaeology (including scheduled monuments), with each seen as important relics of our history and past patterns of settlement. Many further archaeological resources remain undiscovered.

Scotland has many natural resources and material assets, not least its high quality agricultural land, and extensive areas of forestry and woodland. Scotland's transport infrastructure is also a key asset in connecting our urban and more remote rural areas, and supporting future growth.

It is widely held that climate change is one of the most serious threats facing the world today. It is already having an impact on weather patterns, increasing air and sea temperatures, and impacting on Scotland's unique biodiversity. Further changes in levels and timing of rainfall, temperatures, and more extreme weather events are expected; all of which have the potential to affect other aspects of the environment. Whilst progress is being made to reduce emissions that cause climate change, action continues with the implementation of the Climate Change Plan and Energy Strategy, and the commitment by Scottish Government to Energy Efficient Scotland.

Setting a long term standard

When the Scottish Government consulted on these elements of the Programme in January 2017 there was a clear consensus around setting long term targets, providing clarity and a clear direction of travel. We are now proposing to set the long term mandatory standard for all residential properties at EPC band C. To support our fuel poverty targets we are proposing a more ambitious, non-statutory, target for those households in fuel poverty, with a standard of EPC band C by 2030 and EPC band B by 2040.

Within the setting of a common metric for all residential properties are proposals to build on the existing energy efficiency standard for Social Housing ( EESSH) to set new milestones.

For non-domestic properties we will build on current regulations ^[2] made under the Climate Change (Scotland) Act, resulting in all non-domestic buildings being assessed and improved to the extent this is technically feasible and cost effective by 2040. Following investigation, we will consult on the setting of a long term standard for non-domestic buildings in 2019.

Local Heat & Energy Efficiency Strategies

The Programme is building on existing legislation and programmes that are already supporting the improvement of energy efficiency in our homes, businesses and public buildings. The work we are doing with local authorities on the development of Local Heat & Energy Efficiency strategies ( LHEES) will build on pilots and continue to offer funding to their development during the Transition Programme phase of the Programme. LHEES will be the link between our long term targets and national policies and delivering energy efficiency and heat decarbonisation on the ground. The Scottish Government consulted again from November 2017 to February 2018 on the potential for local authorities to have a statutory duty to develop LHEES. We are currently analysing the consultation responses and will issue our final response as part of the response to the consultation accompanying the Routemap.

Wider regulations on the district heating sector

As well as consulting on Local Heat & Energy Efficiency Strategies, we are currently considering the potential for regulation of district and communal heating in order to assist in encouraging the development of this technology, particularly as it could play an important role in helping local authorities meet their objectives set out in their LHEES for the Programme.

We consulted on establishing a regulatory framework that would provide confidence for investors and would ensure protection for district heating consumers proposing that the public sector could take a leading role in the development of district heating where an LHEES identified it was appropriate to do so. Further refinement of this proposal is currently ongoing and forms part of this assessment. .

What are their likely environmental effects?

The setting of a long term standard for all properties in Scotland is expected to make a significant contribution to Scotland's commitment to greenhouse gas emissions reduction. This contribution will come from significant improvements to the energy efficiency standards of properties across all sectors. The timeline for improvements will be gradual in line with the phased nature of the implementation of the standard. It will see individual properties improved over a long term but phased programme based on incentives and regulations, combined to achieve the Programme's vision. This will hold true for the introduction of standards and timelines for social housing through the EESSH programme.

On a wider scale, the introduction of local heat and energy efficiency strategies and a framework for wider use of district heating across all local authority areas in Scotland will provide a framework for improvements and investment, all working towards the same environmental goals.

Previous Consultation on the Programme

In the autumn of 2016 the Scottish Government undertook a period of pre-consultation scoping work on scenarios for the whole programme. In addition to this scoping work, the following consultations have fed into the development of the current work: These consultations were not subject to SEA.

• Scotland's Energy Efficiency Programme ^[3]
• Scottish Energy Strategy: The Future of Energy in Scotland ^[4]
• Consultation On Heat & Energy Efficiency Strategies, and Regulation of District Heating ^[5]
• Energy efficiency and condition standards in private rented housing ^[6]
• Fuel Poverty Strategy Consultation ^[7]
• Second Consultation on Local Heat & Energy Efficiency Strategies, and Regulation of District and Communal Heating ^[8]

Summary of impacts measured against SEA topics

SEA Issues	SEA Objectives	Summary of impacts
Biodiversity, Flora, Fauna	Conserve, protect and enhance Scotland's diversity of species, habitats and the natural heritage. Protect and enhance of important habitats and connectivity. Maintain and protect populations of European Protected Species, including their functioning habitat	At a national level, it is noteworthy that whilst there are a wide range of pressures on biodiversity, climate change in particular has the potential to greatly impact [9] . The impact of the proposals at a national level is generally considered to be positive. However, at a local level, it is recognised that the installation of energy efficiency technologies has the potential to disturb some species, particularly those using roofs and wall cavities to nest or shelter. In the assessment the ability to mitigate has been included.
Soil	Maintain, protect and where possible enhance soil quality, geodiversity and carbon rich soils.	As soils play a significant role in terms of storing carbon and therefore help to regulate GHG emissions the impact of the proposals on existing resources has been undertaken. While Scotland's soils are considered to generally be in good health, there are a range of pressures on them. Climate change and loss of organic matter pose the most significant threat. At a national level this can only be done at a strategic level and it is considered that the overall impact of the programme and its constituent parts will be broadly positive. However, in certain assessments the need for a more local solution has been considered, particularly where there is a known likely impact at a localised level.
Water	To protect maintain and where possible and enhance the ecological status of the water environment.	Scotland's water resources are generally considered to be in good condition [10] . However the localised impact of proposals on water quality and quantity must be assessed. This is particularly the case with local installation of energy efficiency schemes which use water as a resource directly through extraction and heat extraction. The impact at this level may therefore considered to be mixed.
Population and Human health	Work to eradicate fuel poverty Work to reduce GHG which are harmful to human health Reduce other environmental impacts which are harmful to human health	The key consideration is the impact of the programme and its constituent parts to GHG emissions and the impact this has on human health. At both a national and local level this is likely to be positive and will, over time, have significant impact on the quality of lives across Scotland.
Air	Protect and improve, where possible, air quality across Scotland	Air pollution can result in adverse impacts on both human health and can significantly affect many aspects of quality of life. Air pollution can also cause adverse effects in the wider environment [11] . Air quality is important for both short and long-term human health, and poor air quality can have impacts on people with existing health issues. At a national level the proposals are likely to have positive impacts primarily due to the reducing in GHG emissions and a reduction in reliance on fossil fuels. At a local level however, the installation of specific projects may have localised and short term imapcts caused through dust. There will be a need to consider this on a site by site basis and review the need for local solutions.
Climatic Factors	Contribute to formal targets to reduce Green House Gas Emissions across Scotland	Climate change is considered to be one of the most serious environmental threats to sustainable development, with adverse impacts expected on human health, food security, economic activity, natural resources and physical infrastructure [12] . Adaptation to the effects of climate change is now acknowledged as being necessary to respond effectively and equitably to the impacts of climate change. The proposals under this programme are all designed to address this and have the need to make a positive contribution at their heart. This is at both a national and local level and are principally associated with reductions in GHG emissions.
Cultural Heritage	To protect and where appropriate enhance the historic, built and cultural heritage.	Scotland's many and varied historical sites are unique and irreplaceable. These sites and features are regarded as making a valuable contribution to our quality of life, cultural identity, education and economy. While the proposals are likely to have a positive impact on these properties by way of their energy efficiency standards, this may have mixed impact by way of the visual impact associated with the installation of measures. The impact at a national level is likely to be negligible, but at a local level, localised solutions will be required to mitigate.
Material Assets	Promote the sustainable use/reuse of all properties across Scotland to support sustainable development, reduce GHG emissions and make best use of this valuable resource	The building stock across Scotland is a valuable resource and should be treated as such. The proposals aim to improve the energy efficiency of all buildings and as such will have a positive impact. The option to prioritise retrofitting and reuse of properties rather than demolition is positive both in terms of the impact on local communities and also on the stock as a source of captured carbon.
Landscape	Protect our most scenic areas, reflect the importance of the interaction between people and the land, and aim to enhance areas where landscape qualities have been eroded over time	Land use change, incremental and on-going development such as infrastructure projects, and design all impact on the quality of Scotland's valuable landscape. The proposals, at a local scale, could have a mixed impact, depending on the measures being installed. Local solutions will be required to ensure that the impact is appropriate and that proposals contribute to the aim of making all of Scotland's local environments valued as attractive and healthy places to live [13] .

How have alternatives been considered in the assessment and what environmental effects have been identified?

The development of targets, milestones and policy under the Programme umbrella are all influenced by a huge raft of research and a suite of critical success factors which assist in programme development and the direction of travel:

Success factor	Description
Strategic fit and economic growth	Supports Scottish Government objectives to: meet Climate Change targets promotes and supports growth and development of the Scottish economy in a controlled and sustained manner.
Deliverability and quality	Delivers in a way which: matches the supply chain's ability to deliver the required technologies and works to a set standard and by an appropriately skilled workforce makes an improvement to Scotland's built estate to a defined level of quality, and provides protection for the consumer.
Affordability and Value for money	Allows a range of finance options to be used and has the potential to attract significant levels of private sector capital. Realises value for money for Scottish Government
Fuel Poverty reduction	Promotes achievement of fuel poverty reduction targets through the programme life.

These success factors have been combined with environmental criteria to carry out initial consideration of alternatives for each proposals.

What mitigation and monitoring is proposed?

In order to ensure we are on track to achieve the Programme vision, aims and objectives a formal monitoring and evaluation framework will be used. This will be developed over the next two years and will then begin in April 2020. During the intervening period a baseline will be established. The details of this monitoring work is set out in the Routemap.

This monitoring and evaluation will allow us to adapt and flex the programme where necessary. As well as looking at outputs we will be monitoring and measuring outcomes, capturing the impact the programme has on people and communities.

At a more local level, mitigation is recommended associated with the careful environmental management of projects on a site by site basis.

What were the conclusions and recommendations of the SEA?

The assessment set out the following conclusions and recommendations:

• The proposals are likely to lead to significant GHG emissions reductions and the SEA supports the view that the underpinning objectives of these proposals will be met in this regard. The impacts on climate factors assessed in this SEA are all positive, and this is particularly true when considering the long term impact on demands on energy from traditional and finite fossil fuel.
• Significant benefits in terms of air quality and population and human health were identified; in particular, through proposals which make a direct impact on the living standards of the population. The SEA notes the particular focus on those in fuel poverty and the likely positive impacts.
• The SEA supports the potential secondary impacts associated with increased flexibility of supply through energy efficiency measures, and at a national level this will make a positive contribution to the Programme aims to target GHG emissions and fuel poverty.
• The SEA identified that consideration will need to be given at a localised level to ensure that appropriate measures are in place to mitigate any potential negative impacts. Having identified impacts as mixed since they have the potential to be both positive and negative, mitigation is important to ensure appropriate impacts. The use of environmental management plans is identified as a solution to this.
• The improved clarity provided by the implementation of the proposals, particularly in regard to the speed of implementation for improvements is recognised by the SEA, and whilst this may have a neutral effect, it does provide a clear statement of intent, which will support and underpin the primary effects.
• The Programme as a whole recognises the importance of robust baseline and monitoring to ascertain the effectiveness of proposals, and this will be done through the monitoring and evaluation framework which is identified as a formal commitment in the Routemap. This assessment recognises that framework and the commitment to baseline data. As such it concludes this as the most appropriate way to monitor the environmental impacts of the proposals considered here.

How can I comment on this Environmental Report?

Public views and comments are invited on the environmental impacts of the proposed setting of a long terms standard, energy efficiency standards for social housing, Local Heat & Energy Efficiency strategies ( LHEES) and the regulation of district and communal heating as set out in this Environmental Report. Should a respondent wish to make a joint response on the Environmental Report for some, or all, of these proposals, we ask that respondents clearly indicate to which proposal the comments relate to.

Providing comments on this Environmental Report

Respondents are asked to submit responses on the Environmental Report by 27 ^th July 2018 to

Energy Efficient Scotland Consultation
Energy Efficient Scotland Programme Management Office
Scottish Government
1H South
Victoria Quay
Edinburgh EH6 6QQ

Email: EnergyEfficientScotland@gov.scot.

Respondents may find the following questions helpful to provide a focus for their responses on this Environmental Report. Please note that responses do not need to be confined to these questions, and more general comments on this Environmental Report, and the proposals are also invited.

What are your views on the accuracy and scope of the information used to describe the SEA environmental baseline set out in the Environmental Report? (Please give details of additional relevant sources)

What are your views on the predicted environmental effects as set out in the Environmental Report?

What are your views on the findings of the SEA, and the proposals for mitigation and monitoring of the environmental effects set out in the Environmental Report?

The responses received on this Environmental Report will be collated, analysed and reported. Key messages and findings of the responses received will be taken into account in the finalisation of each of the proposals.

Post-adoption SEA Statements will be prepared and published for each proposal. These statements will reflect on the findings of the assessment and consultation, and will explain how the issues raised have been considered and addressed in the preparation of the finalised proposals.