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

Virtual Agency and Transition Planning

140. The Call for Evidence noted the need to act now to tackle the challenge of transformational change in how Scotland heats its homes and buildings. As such, it is intended to establish a virtual Agency by September 2022. Working with key delivery partners, the plan is to set a transition route map, that will consider how to build on, improve and co-ordinate existing – and future – advice and delivery programmes, and what needs to happen to scale up to deliver within a single dedicated body by September 2025.

Strategic Purpose and Functions

141. It is intended that the virtual Agency will be tasked with two strategic purposes:

• To lead strategic oversight and co-ordination of on-going energy efficiency and heat retrofit delivery programmes pan-Scotland.
• To lead a set of development work-streams to inform the design and set up of the dedicated Agency, in respect of key functions and governance.

142. Question 17 of the Call for Evidence asked:

Q17: 'Other than those listed, are there any other specific functions that you think the virtual Agency should be tasked with delivery ahead of the dedicated Agency, and why? If you have any supporting evidence that demonstrates the potential added value – or make clear the current gap in delivery – of such a function pre-regulations, please provide.

143. A total of 21 respondents answered this question, with a small number of these noting their support for the strategic purpose and functions as listed in the consultation paper; for example, in supporting a leadership role in the provision and development of energy networks that will support the decarbonisation of the built environment. That said, there were a very small number of requests for more information given that the proposed core functions and nature of the proposed body have not been defined or for more information on the scale and pace of activity in the delivery of heat decarbonisation. Little supporting evidence was provided by respondents.

144. The timescale for establishing the Agency was a concern for a small number of respondents, with a respondent in the Heat & Energy Efficiency – Delivery Landscape sub-group noting that, given the short timescale to 2030, there is a need for more information on the scale and pace of activity and the need to start delivering programmes. A very small number of organisations also commented on the need for early introduction of regulations so as to encourage compliance.

145. As at previous questions, a key issue for a few respondents was of the need to ensure local authorities have adequate resources – both funding and staffing expertise –for example,to complete high quality LHEES or to conduct a skills gap analysis and develop a suitable workforce. One respondent in the housing sector also noted that the virtual Agency will also need additional resources in order to increase capacity.

146. A small number of respondents focused on possible functions for the Agency, and most of these focused on the virtual Agency. These included an organisation in the consumer advocacy and advice sub-group which commented that the new Agency should be covered by the Consumer Duty and integrate this into its mission and organisational principals. Another organisation in the Heat & Energy Efficiency – Delivery Landscape sub-group noted the Agency might have a wider remit than the focus on energy efficiency and heat decarbonisation and the remit should also include national and distribution energy networks, industrial heat, carbon capture and storage infrastructure, and the energy infrastructure required to support transport networks. They also noted that responsibility for these areas between the Agency, the SNIB (the Bank) and other organisations should be clarified in due course and considered in parallel with the development of the Virtual Agency, and included in any review of the case for establishing a dedicated Agency. An organisation in the housing sector noted that it will be important for the Agency to take on a leadership role in the provision and development of energy networks that will support decarbonisation of the built environment.

147. The issue of fuel poverty was raised by a small number of respondents who wanted to see a commitment to 'no detriment' for fuel poor households and a reduction in fuel poverty. One organisation, while welcoming plans for the Agency, noted their concern that given the current high rates of fuel poverty, it will be essential to understand how the virtual Agency can scale up and accelerate delivery of retrofit and heat decarbonisation.

148. A small number of organisations also noted a need for a rural transition package in off-gas areas; or the need to investigate off-grid rural properties to investigate how they can be decarbonised^[2].

149. The issue of the infrastructure was noted by a very small number of respondents, with a comment from a housing sector organisation that the energy infrastructure should be a key objective from the start.

150. There were also a few comments relating to consumer engagement and awareness with references to the need to increase awareness among consumers on the benefits of retrofit, as well as changes in legislation to prepare the market for the retrofit agenda once policies are in place. There were also a small number of comments on the need for customer journeys to be designed for different audiences in terms of advice, finance and support.

151. There were a very small number of references to partnership working with the need for evidence collection and options analysis to be conducted in partnership with the Scottish Government and industry; or for continuing existing relationships with the UK Government and BEIS.

Structure, Governance and the Transition Pathway

152. In line with timescales to launch by September 2022, the Cabinet Secretary for Net Zero, Energy and Transport informed the Scottish Parliament's Net Zero, Energy and Transport Committee on 14 September that the virtual Agency would operate in-house for the Scottish Government to begin with. This will ensure there is minimal disruption to the continuing delivery of current energy efficiency and heat decarbonisation programmes as well as allow for flexibility in design of the virtual Agency so that it can change and evolve in structure, governance and capacity as required.

153. To ensure the virtual Agency has both credibility within the wider stakeholder landscape and the necessary decision making authority and capability to begin to transition delivery, the Scottish Government is proposing setting up a shadow independent Strategic Partnership Board to help oversee its work. Question 18 asked:

Q18: 'Do you have any examples, or insights based on experience, that demonstrate the potential added value of an 'interim' delivery body in advance of a dedicated public body, and how this can best be achieved?

154. Only 11 respondents made comments at this question, with only a small number giving examples of or insights into the potential added value of an interim agency – See Annex 2.

155. Most of the more general comments voiced agreement that having a virtual Agency is an appropriate step to aid the development of a full Agency, with suggestions that it would help to highlight areas that need to be addressed or lessons that need to be learned. An energy respondent pointed out that there would be a benefit from having the start-up time required for the agency reduced.

156. Very small numbers cited points about the virtual agency needing to be monitored for effectiveness in order to inform areas to include in the dedicated agency, and a need to ensure that the setting up of the dedicated agency does not impinge on wider activities such as supply chain development. A Heat & Energy Efficiency – Delivery Landscape organisation disagreed that an interim solution is positive, stating that a long-term committed agency was needed to lead by example and that there was a danger that the interim agency may become semi-permanent.

157. Question 19 then asked:

Q19: 'Do you have any 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? What lessons can be learnt?

158. 9 respondents made comments at this question, almost all of whom gave detailed examples and insights – See Annex 2. There was one reiteration citing the importance of change management practices being effective, and a request not to tie this in with the Scottish Government.

159. Finally, the last question in the Call for Evidence asked:

Q20: 'What do you see as the key steps, and / or considerations that will need to be reflected in the transition Route Map, and why?

160. 24 respondents made comments at the final question, many of which reiterated points already made and didn't go into great detail. Only three respondents made reference to extra evidence, each of these citing the same source – see Annex 2.

161. The main consideration theme, cited by a majority of respondents, was to develop foundations for the dedicated agency, comprising its scope, remit, definition, goals, statutory and regulatory powers, resources and funding; it was also noted that the transition should highlight gaps and be used as a proving ground.

162. A few respondents thought that the transition route map should comprise building on existing good practice in terms of delivery infrastructure, scaling up and accelerating existing programmes and ensuring the essential building blocks are already in place and not disrupted. Similar numbers encouraged a consistency of approach in terms of messaging and communication; however, there were a small number of respondents who suggested tailoring policy, communications and delivery for different audiences and for more complex interventions.

163. Small numbers of respondents made the following other points to be reflected in the transition route map:

• The needs of communities / local areas (e.g. those in fuel poverty, ensuring Just Transition principles).
• Supply chain issues (e.g. role, capacity, worker engagement, skills availability).
• The involvement of stakeholders during development of the agency (role of local authorities, other agencies, etc.).
• Skills and technical expertise availability amongst staff in the agency.
• Provision of clear leadership and / or oversight (e.g. providing guidance to stakeholders such as local authorities and landlords).
• Space for further consultations and feedback on progress.

Additional comments

164. Twelve respondents, mostly organisations, opted to provide additional information in their consultation response. Most provided background information on their organisation to set the context for their response and / or welcomed the opportunity to respond to the consultation. A few of these provided a brief summary of the points made in response to specific consultation questions. For example, reiterating ways in which they could collaborate with the new Agency, their views on the functions of the Agency or concerns over fuel poverty.

165. One individual noted their support for electrification of heat sources and ways of making electricity more affordable rather than retrofitting or other efficiency measures. They felt that higher levels of electricity usage would bring about a greater return on investment and cause less disruption and expense than retrofitting. Another individual noted their support for use of biomethane and renewable synthetic methane, which are carbon-containing net zero gases that can be supplied with no changes to boilers.