Heat in buildings - Scotland's National Public Energy Agency call for evidence: analysis of responses

Executive Summary

Scotland has one of the most ambitious climate targets in the world. The Heat in Buildings Strategy, published in October 2021, focuses on heating system change and set out a number of actions and proposals for transforming buildings and the systems that supply their heat, to ensure that all buildings reach zero carbon emissions by 2045. A key element of this strategy is the establishment of a new, dedicated National Public Energy Agency by 2025 to provide new leadership and coordination to delivery of heat decarbonisation in Scotland.

In recognition of the need to act quickly in tackling climate change challenges, the Scottish Government is already working on development of a virtual Agency which will be launched by September 2022. This virtual body will be established initially as a discrete delivery mechanism within the Scottish Government, supported by a new independent Strategic Board to oversee its work.

The Scottish Government is keen to ensure the new Agency has the support of the wider delivery landscape and can meet the needs of a wide range of end users as Scotland moves towards heat decarbonisation. As such, there is a need to consider the role and responsibilities of the Agency, its delivery functions, its structure and governance, how it will adopt a strategic leadership role and work with partners and stakeholders, and its strategic purpose and functions.

In November 2021, a Call for Evidence was launched to gather views to help inform development of a broader evidence base to inform the design of the new Agency. This closed on 8 February 2022. The findings of this Call for Evidence will be used to inform whether or not the body should adopt a regulatory role in line with proposed regulations, the governance, institutional form and functions of the Agency and how a co-development and partnership-based approach can be embedded throughout the development and delivery process for the new body.

Respondent Profile

In total, there were 52 responses to the Call for Evidence, of which 46 were from organisations and 6 from individuals.

Key Themes

A number of key themes were evident across questions as well as across respondent groups, although each was mentioned by a minority of respondents, and these are summarised below.

• While there was generally support for the establishment of a virtual Agency, there were some requests for further information given that the proposed core functions and nature of the proposed body have not been defined. Linked to this, there were requests for a robust policy framework and strategic direction. The timescale for establishing the Agency was also a concern for a small number of respondents.
• The role of the Agency was perceived by many to be in providing overarching oversight and leadership offering support, collaboration and coordination of public agencies, programmes and funds established to help with net zero ambitions. As such, respondents placed emphasis on the need for collaboration and coordination across all relevant sectors, and for the Agency to work in partnership with a wide range of stakeholders.
• Respondents identified a number of ways in which they could work with the new Agency, including the sharing of expertise, the provision of technical advice and guidance and training.
• Allied to this, there were some suggestions of the opportunity for the Agency to create a one stop shop for support, guidance, advice and expertise for industry and consumers. A key benefit of this would be to ensure there is no duplication of effort.
• Views were mixed on whether new regulatory standards should be enforced at a national or local level, although some respondents felt the most appropriate approach would be for an approach combining national regulations but with delivery and provision at a local level. This would help to bring about consistency across Scotland but benefit from the use of local knowledge. Furthermore, there were some requests as to how the proposed regulatory function of the Agency would work alongside other organisations which also have regulatory functions.
• When asked to provide evidence or case studies, relatively limited numbers of respondents did so. Throughout the consultation the Danish Energy Agency was cited as a positive example of an effective approach.
• Financial support in the short, medium and long term was outlined as a priority, particularly in relation to local authorities who play a major role in the heat decarbonisation agenda. A number of respondents referred specifically to Local Heat and Energy Efficiency Strategies (LHEES) which have to be in place by the end of 2023. There were also references to the need for the Agency to be suitably financed and resourced so as to deliver effectively on its remit.
• There were calls for skills training, both in terms of upskilling and reskilling so as to ensure there is a large enough workforce with the relevant skills and experience to help bring about the heat decarbonisation agenda.
• A great deal of importance is placed on the need to increase the engagement and awareness of consumers and the public about heat decarbonisation; for example, the requirements that will be needed, available support and advice, information on heat networks and so on. Respondents noted a range of different approaches that could be adopted for public communication and advice provision, with some focusing on the need to ensure any information is provided by trusted agencies.
• Reference was made by some respondents of a need to carry out effective monitoring and evaluation of the Agency.

Summary of questions

Dedicated Agency: Strategic Purpose, Remit and Objectives (Qs 1-5)

When asked what is needed to achieve the transformational change that is necessary for heat decarbonisation in Scotland (Q1), respondents cited a number of key elements. These included increased engagement with, and awareness of, consumers and the public; and a robust policy framework and strategic direction related to the Heat in Buildings Strategy and the Local Heat and Energy Efficiency Strategy (LHEES), with some calls for the interconnection of policy targets and policy actions. There were also calls for collaborative working and coordination so as to avoid any duplication of work. Other elements cited included skills training (upskilling or reskilling); clarity in financial support; support for supply chains; and preferences for planning guidance, policy and building regulations regarding heat decarbonisation to be made mandatory. Local authorities were identified as playing a key role.

When asked how the new dedicated Agency could best support this change programme (Q2), some of the same themes emerged. For example, for the Agency to provide overarching support, collaboration and coordination of public agencies, programmes and funds established to help with net zero. There were some requests for support for local authorities. Again, public communication and advice provision were cited, along with support for communities and consumers, with preferences for support to be provided at a local level. Some respondents advocated for support for stakeholders, with some citing small and medium sized enterprises specifically. Other areas where support could be provided included funding, implementation, the provision of oversight and leadership and specific measures for heat decarbonisation, with some references of a need to operate under Just Transition principles.

A number of opportunities and challenges for delivery presented by this agenda were outlined (Q3); the most frequently mentioned opportunity was to create a one stop shop for advice and knowledge. Key challenges were perceived to be the roles played by local authorities, the Scottish Government and the Agency, public understanding, how to bring about behavioural change, supply chain capacity and the high costs of energy-related measures.

Question 4 asked whether respondents had any evidence or insights based on experience, that demonstrated the need and potential added value of a new public body as suggested in the heat decarbonisation delivery landscape. The key issue cited was the need for a hub providing support, guidance and expertise for consumers and industry.

When asked for case studies or research that could help inform design of a new public sector delivery body to ensure it is able to deliver effective outcomes, and to be consumer focused (Q5), respondents noted it is important to investigate previous work and experience. The key mention was for the Danish Energy Agency, although there were also some mentions for:

• The Sustainable Energy Authority of Ireland.
• The French Agency for Ecological Transition.
• The European Federation of Agencies and Regions for Energy and Environment.
• The Swedish Energy Agency.

Again, respondents reiterated the need for consumer engagement and empowerment.

Delivery Functions (Qs 6-9)

Respondents outlined a number of tools and support that the dedicated Agency would need in order to effectively establish leadership and coordination of heat decarbonisation in Scotland (Q6). The key theme was based on the need to engage and work with stakeholders and to consider how to bring this about, with a wide range of stakeholders identified. Respondents referred to resources that will be needed for staff and funding. In reference to leadership specifically, there was perceived to be a need for political commitment.

Question 7 asked for evidence or further insights regarding the potential added value that the functions as set out could deliver. Responses to this question were limited and many of the points raised echoed those from earlier questions. Only a small number of respondents provided any examples to illustrate the potential added value that the functions could deliver; these included:

• China.
• The Danish Energy Agency.
• The Sustainable Energy Authority of Ireland.
• The French Agency for Ecological Transition) (ADEME.
• The Federation of Agencies and Regions for Energy and Environment (FEDARENE).

A relatively limited number of respondents offered any evidence or case studies that demonstrate the effectiveness or not of new regulatory standards being enforced at a national versus local level (Q8), and there was little consistency across responses. A few respondents supported new regulatory standards being enforced at a national level, compared to a small number who supported this at a local level; and a small number supported an approach combining national regulations but with delivery and provision at a local level. Specific examples of an effective approach included the Danish Heat Supply Act and a joint project between Vattenfall and Midlothian Council.

When asked to indicate any existing, or previous, public bodies that exercise both an advisory and regulatory role within the same organisation (Q9), the most frequently mentioned organisations were SEPA, NatureScot and the Scottish water industry.

Institutional Form and Governance (Qs 10-11)

Relatively few respondents opted to answer Q10 which asked for case studies or recent research that considers the opportunities and challenges of establishing a public sector body that is tasked with programme delivery functions on a statutory footing.

In terms of future proofing the agency to take on any potentially new responsibilities (Q11), many comments related to specific roles the Agency could adopt, and a few respondents raised the question of how the proposed regulatory function of the Agency would work alongside other organisations. Key organisations mentioned in this respect included:

• The Scottish Housing Regulator.
• The Scottish Government's Building Standards Division.
• Home Energy Scotland.
• Energy Action Scotland.
• The new Consumer Scotland body.
• Trading Standards Scotland.
• Environmental Standards Scotland.
• The Future System Operator.
• Ofgem.

Strategic Partnerships and Wider Stakeholder Relations (Qs 12-16)

Question 12 asked who the Agency would need to work with closely in order to best facilitate delivery of the transformational change required; there were a few general comments on the need for collaboration and coordination across sectors and stakeholder types. A wide range of specific stakeholders were cited including local authorities, the Scottish, UK and other devolved governments, regulators, enterprise agencies, public bodies, partner organisations, industry, trade associations and trade bodies, housing associations, RSLs, private landlords, the third sector and consumers.

The next question asked for case studies that demonstrate (in)effective partnership working by a public body to coordinate a broader delivery landscape to achieve a shared goal (Q13). Examples of effective partnerships included local authority work with Home Energy Scotland, CAS and other local services and partners, area-based schemes such as LHEES and Scottish Government investment in collaborations such as the Scottish Cities Alliance. Ineffective examples included the management of the Capacity Market, the Green Homes Grant Voucher Scheme and the current rollout of interlinked smoke and heat alarms across Scotland.

When asked what role they saw their organisation playing in relation to the Agency once established (Q14), key areas were in sharing expertise, technical advice and guidance, support for training, helping to standardise approaches and developing and establishing common procurement processes.

In terms of the role they see for their organisation during the development process of the Agency (Q15), many respondents echoed points made at Q14. The Queensferry Crossing Project was cited as a positive example.

Various types of approaches to civic participation (Q16) were given by respondents; there was general agreement of the need to engage with consumers, either directly or indirectly via consumer groups, local authorities or consumer advocacy organisations. Focus was on the importance of ensuring that any approach utilised is delivered by a trusted agency. Suggestions for approaches included deliberative approaches, consultation, civic consultation forums and town hall events. There were also references to linking in with local authority community planning engagement strategies, involving local energy advice groups and using exemplars from customers.

Virtual Agency and Transition Planning (Qs 17-20)

Strategic Purpose and Functions

A few respondents noted support for the strategic purpose and functions listed in the consultation paper, although there were a small number of requests for more information (Q17). Little supporting evidence was provided by respondents. The timescale for establishing the Agency, additional resources for local authorities, the infrastructure, consumer engagement and fuel poverty were noted as concerns.

Structure, Governance and the Transition Pathway

There was general agreement that having a virtual Agency is an appropriate step to aid development of a full Agency (Q18), although there were requests for monitoring its effectiveness. Very few examples were provided of insights into the potential added value of an interim Agency.

Very few respondents provided examples or insights based on experience of effective change management practices relating to a public sector initiative that required a shift in the existing national and / or local delivery landscape, managed over time (Q19).

Next key steps or considerations that will need to be reflected in the transition Route Map (Q20) included development of foundations for the dedicated Agency covering its scope, remit, definition, goals, statutory and regulatory powers, resourcing and funding. There was some reference to building on existing good practice and a consistency of approach in terms of messaging and communication.