Green Heat Finance Taskforce minutes: October 2024

Attendees and apologies

• Sara Thiam – Prosper & Taskforce Chair 
• Kirsty Hamilton OBE – Independent 
• Rufus Grantham – Independent  
• Dr Ian Cochran – Independent  
• Dr Gemma Bone Dodds – Director, Insights & Policy, Scottish National Investment Bank (SNIB) 
• Dr. Andy Kerr – Director, Climate KIC 
• Lewis Shand Smith – Chair, Energy Consumers Commission 
• Eloise Henderson-Day – Green Finance Institute (GFI) (substitute) 
• David Steen – UK Green Building Council Scotland 
• Ben Rose – Scottish Financial Enterprise 

Secretariat: 

• Karl Reilly – SG, Heat in Buildings, Acting Head Future’s Unit
• Peter Irving – Heat in Buildings Future Finance Team, GHFT Secretariat  
• Daniel Nagy – Heat in Buildings Future Finance Team, GHFT Secretariat 
• Rajiv Naik – Heat in Buildings Future Finance Team, GHFT Secretariat  
• Ciara O’Connor – SG, Social Housing Decarbonisation Team Leader 
• Alex Chatzieleftheriou – SG, Head of Heat Network Development 
• Saleem Hassan – SG, Head of Future Delivery Strategy Team Leader 
• Neil Cameron – SG, Heat in Buildings Future Delivery Strategy Team 

Items and actions

Action points

1. All Taskforce Members to send Secretariat any specific comments on current iteration of Part 2 report - in form of bullet points and tracked-changes - by close on Friday 18 October, with a particular focus on ‘core framing’ of report, as well as distilling key messages around Heat Networks and Social Housing. 

2. Secretariat to share updated draft of the report by the end of October and schedule the next Taskforce discussion for shortly after this.  

3. Sara and Ben to consider and advise on how the Taskforce might test the headline conclusions from the report with key private sector stakeholders (noting SG publishers will require three weeks from receiving a final draft of the report until it is ready for publication). 

Welcome and Apologies; Minutes of previous meeting, including member notification of any conflicts of interest.  

The Chair welcomed members to the 17th meeting of the Green Heat Finance Taskforce (GHFT).  Apologies had been received from: Gareth Fenney (SG); Helen Melone (Scottish Renewables); Simon McWhirter (UKGBC); Emma Harvey-Smith (GFI). Eloise Henderson-Day was welcomed as a substitute for Emma.   

All members confirmed that they were content with the minute of, and actions arising from, the 17 July 2024 meeting.  No conflicts of interest were raised. 

Secretariat Update – Scottish Government 

Karl provided a brief update to the Taskforce, noting that the Scottish Ministers were currently considering next steps around the Heat in Buildings (HIBs) Bill and Social Housing Net Zero Standard. He noted responses to the HiBs Bill consultation have been independently analysed and outline key themes arising, including that, whilst there was overall support for the proposals, respondents had raised a range of questions around practical delivery.  

Part 2 Report 

Karl noted the most significant changes since the last meeting, namely: 

• making report more challenging with stronger Taskforce voice to articulate desired ambition
• making place-based more prominent theme, including discussing the need to aggregate projects into programmes
• refining heat network and social housing chapters, although still need Taskforce to give a further steer on key messages they want to articulate in these chapters

In the subsequent discussion comments on the draft report from members included: 

General 

• need to sharpen-up on key messages and draw those out more clearly
• there is still a lot of explanation, a strong and clear statement of key messages is needed before delving into the detail
• in relation to key messages, set-out compelling narrative in a way that helps to raise the profile and strategic priority of heat, including how heat interlinks with energy
• the report can provide an opportunity to make a strong case for heat, so need to demonstrate what the opposite of disjointed individual projects should look like, including how linking projects can deliver better taxpayer value for money, and that heat should be considered as part of wider energy and net zero projects. (leaving heat out of net zero infrastructure developments would be a missed opportunity)
• the use of language is important in getting consumer buy-in. A ‘carbon’ narrative is not as strong as ‘cost of living’ narrative, with Scotland in danger of being left behind and citizens having higher costs of living if we do not find a just transition for them – the Scottish Energy Advisory Board is building on a narrative coming from UK Mission Control which emphasises cheaper power rather than clean power

Report conclusions 

• recommendations need to go beyond asks of Scottish Government and articulate what others – UK Government (including bodies like GB Energy), Local Authorities, industry, regulators, individuals – need to do 
• the role of different parties should be set out. For the public sector this should be around coherence, capacity and capability, that is joining up action across policy areas, helping resource development of viable projects and programmes and providing access to technical and professional expertise to support project development
• on governance there should be a clearer recognition of different layers (UKG, SG, Local Authorities) acknowledging the current landscape and ways of influencing, including at a UK-wide regulatory level (where Scotland should be engaging and applying pressure into the REMA process)
• huge requirements around behavior change and cultural shift meaning strong public engagement, led by the Scottish Government, is needed

Place-based, heat networks and social housing 

• the report should be explicit on what is required from a place-based perspective. That is a dedicated support unit (planning, delivery, funding with various components) to coordinate a comprehensive programmatic approach and where ring-fenced funding is needed to support local authorities through a pilot phase and access framework contracts. The support unit will also need funded
• place-based is a complex topic, but provides opportunity to connect the three components of the report – social housing and heat networks could be highlighted as part of a way to start testing out place-based approaches
• need to position this report in broader UK context and recognise developments with the new UK Government. For example, Net Zero Hubs funded by DESNZ (five in England) have been set up to support councils deliver net zero programs. A place-based support unit could be a Net Zero Hub in Scotland, offering scope for Scotland to tap into already established structures like procurement frameworks
• outsourcing of planning and delivery services at a local level is commonplace and there is an ecosystem of partners wanting to be involved, suggesting potential for a support unit
• while local authorities have produced LHEES, there needs to be clarity on the next step requirements and resources to take them forward
• must fully consider supply chain considerations. The EU's Carbon Border Adjustment Mechanism (CBAM) and Corporate Sustainability Reporting Directive (CSRD) will both cause significant disruption and bumpiness in supply chain over next year or two, with effects on UK, despite Brexit. Big infrastructure contractors looking to grow in Scotland, for example, in offshore wind where we are seeing real challenges around supply chains and building materials

• like wider place-based approaches, heat networks cannot work in silos as they should be considered a core part of the energy system. To make them work we need to consider the wider system and look at delivery models which create right system-wide approach

• different ownership structures for heat networks could create conflicts so one part of delivery planning should be around asset ownership in retrofit. The Just Transition Commission talked about local ownership. If the Taskforce collectively want to test cooperative models, then the report should be explicit about it and where responsibilities should lie across parties

• ownership and the implications of different ownership approaches should be considered further and more clearly articulated in report

Next Steps and AOB  

The Chair thanked Members and closed the meeting.