Heat in Buildings Strategy - achieving net zero emissions in Scotland's buildings

Chapter 3 People

Transforming how we heat our homes and buildings will touch the lives of almost everyone in Scotland. It will involve changes in our homes, places of work and community buildings as we upgrade and roll out new heating technologies and energy efficiency measures.

There was a broad consensus among respondents to the consultation on the importance of ensuring that the transition to zero emissions is just and will not have an adverse impact on those in, or at risk of, fuel poverty.

People must be at the heart of this transition. We are committed to a just transition to net zero, which means working with people, businesses and communities across Scotland to ensure they have a clear role in decision making, can access support and advice, and to help ensure that the costs and benefits of the transition are spread fairly. We will also take action, within our powers, to protect our most vulnerable citizens and to ensure that there are clear routes for redress when things go wrong.

Just Transition

The transition to net zero emissions will transform our society and economy, therefore the manner of our transition will be crucial. If we plan and prepare, building consensus about our collective future through dialogue and engagement, then we can ensure Scotland benefits from the opportunities of net zero. The transition can realise green jobs, a better environment and a healthy economy that supports our wellbeing. Failure to plan risks abrupt shifts, the loss of key industries and jobs, and deepening inequalities. This is why Scotland has committed to a just transition to net zero.

A just transition puts people and communities at the heart of our approach to climate change action. It ensures we work together in order to capture opportunities, tackle existing inequalities and exclusion, whilst anticipating and mitigating risks to those worst impacted so no one is left behind. As the pace of the transformation increases, the need for a collaborative just transition becomes ever more important. This approach is at the heart of Scotland’s ambitions to move to a wellbeing economy that prioritises society’s wellbeing as the core aim of our economy.

A people-centred transition

The transition to decarbonised heat will affect us all. So, it will be important that we are all involved in the decisions about how our homes and buildings are to be transformed and how the transition is managed. This will need to be underpinned by increasing awareness of energy efficiency and zero emissions heating systems, open and transparent decision making and an inclusive, people-centred approach. We know that public understanding of the role of heating in causing greenhouse gas emissions is low. Research suggests that only 49% of people identified gas central heating as contributing to emissions, and fewer than 20% of people said they would consider switching to a zero emissions heating system, with fewer than 2% having done so already^[xxx].

The crucial role of public engagement to facilitate the heat transition in Scotland was stressed by many respondents to the consultation, who highlighted the importance of both early engagement and engagement activity sustained over a long period.

We are developing a bespoke public engagement strategy for heat in buildings. This builds on the objectives and guiding principles of our Public Engagement Strategy for Climate Change^[xxxi], as well as our existing support and advice programmes, and focuses on:

• raising the profile of energy efficiency and zero emissions heating options so that people are aware of the benefits and begin to see them as a positive choice;
• enabling people to actively participate in shaping the development of Scottish Government policy and incentives as well as local level heat and energy efficiency planning; and
• raising awareness of the support and advisory services available in order to maximise uptake of the support available.

Over the next year, we will work to establish a virtual National Public Energy Agency to accelerate the transformational change required in how we heat and use energy in homes and buildings. The Agency will bring new coordination and leadership to our existing advice and delivery programmes. This will include informing the public on the changes needed and providing expert advice. We will then scale up this approach within a single dedicated physical Agency by September 2025.

We will take steps to ensure that everyone, including owner occupiers, tenants, private and social landlords, SMEs and communities, has the opportunity to help shape the decisions we take at a national and local level on how we heat our homes and buildings in the future. We will consult extensively with stakeholders and citizens as we develop the regulations and delivery programmes proposed in this Strategy. We will also learn from the practices used as part of Scotland’s Climate Assembly^[xxxii], and more broadly welcome the common direction of travel between the Assembly’s recommendations, published in June 2021, and this Strategy. A cross-Government response to the full recommendations will follow, in-line with the requirements of the Climate Change (Scotland) Act.

To support public engagement, we will continue to ensure our schemes are easy to identify and navigate, helping to build trust and awareness. The National Public Energy Agency will be given a role to further ensure users can easily access the support and advice they require. To ensure that we take an inclusive approach, we will identify and support disengaged and vulnerable groups, ensuring that support is available to all of society. We will give due regard to equalities, and will not unfairly discriminate based on any protected characteristics.

Let’s do Net Zero

The Let’s do Net Zero national marketing campaign was launched in June 2021 to inform people about the climate emergency, help them understand the need for action and what Scotland is doing in response. Spanning across three different phases, the campaign has been shown across television, radio, out-of-home media, print media, social media and other digital forms.

The first phase of content – the Climate Emergency – aimed to raise awareness of the climate emergency amongst the Scottish public and the consequences of inaction. The second phase – Scotland’s Taking Action – showcased the range of actions that the Scottish Government is taking to tackle the climate emergency and promoted the need for collective action across all aspects of society. The third and final phase will take place in October 2021 ahead of COP26 and combined the elements of the previous phases that have been most engaged with.

Developing the marketing campaign has been a cross-government effort, drawing on areas such as transport, waste, energy and food and drink. The campaign content is rooted in evidence. In developing the activity we drew on credible existing research and carried out a series of focus groups to test concepts.

We will deliver a public communications programme to raise awareness of the support and advisory services available and to encourage home upgrades, in order to maximise uptake of these schemes. We will ensure that the most up-to-date information and support for individuals to carry out these actions are provided on the NetZeroNation.scot website.

Heat Pump Heroes

Energy Saving Trust’s Scottish Home Renewables Service, which delivers the specialist renewables advice from Home Energy Scotland on behalf of the Scottish Government, carried out a survey to establish the levels of awareness of heat pumps across Scotland. This research found that 51% of people in Scotland had already heard of heat pumps and that 6% are currently very likely to consider installing^[xxxiii].

New webpages were created with information about heat pumps including new videos explaining what air source and ground source heat pumps are and how they work, and new articles looking at how heat pumps works, heat pump myths explored, grants and funding for installation, and an installation checklist and guide.

Case studies were developed for Scotland’s Heat Pump Heroes – members of the Green Homes Network that have installed heat pumps and want to encourage others to do the same. This campaign will run until March 2022.

Summary of action we are taking:

7. Building on the Climate Change Public Engagement Strategy, we are developing a bespoke public engagement strategy for heat in buildings.

8. Over the next year, we will establish a virtual National Public Energy Agency to bring new coordination and leadership to our existing advice and delivery programmes, including informing the public on the changes needed and providing expert advice. We will then scale up this approach within a single dedicated physical Agency by September 2025.

9. We will respond to the Climate Assembly’s recommendations and take action on them.

10. We will continue to ensure our schemes easy to identify and navigate, helping to build trust and awareness.

11. We will identify and support disengaged and vulnerable groups, ensuring that support is available to all of society. We will give due regard to equalities, and will not unfairly discriminate based on any protected characteristics.

Helping people make informed choices

Ultimately, the transition will require individuals and organisations to make a range of interventions in their properties. We want individuals and organisations to see energy efficiency and low and zero emissions heating as a positive choice, understand the options available, and know where they can get help and trusted advice. Respondents to the consultation on the draft Strategy highlighted this continuing need to provide information and support to help consumers make informed choices.

Respondents to the consultation were largely supportive of the Scottish Government’s commitment to providing high quality information, advice and support through established and trusted organisations, such as Home Energy Scotland and Zero Waste Scotland, and by working with local partners or community groups to enable public engagement. Some respondents called for improved quality of advice and customer journey.

We will retain the support and advice services currently operating as Home Energy Scotland and Energy Efficiency Business Support (to become Business Energy Scotland from April 2022) at the core of our delivery schemes. Together they provide free and impartial advice on energy efficiency, energy saving and zero emissions heating to households, businesses and other organisations across Scotland. The public sector can access similar support via the Public Sector Project Support Unit. Third sector and community organisations can access support via the Community and Renewable Energy Scheme (CARES).

As we accelerate the transformation of Scotland’s homes and workplaces, as well as creating the National Public Energy Agency, we are investing in growing our advice services and continuously adapt and improve them so that they continue to meet people’s needs. As an initial step, we are working to improve our digital presence and the advice and support that can be accessed online. We will continue via Home Energy Scotland and Business Energy Scotland to provide in-depth and targeted support for households and SME businesses installing zero emissions heating systems. Our delivery programmes are discussed in more detail in Chapter 6.

We will embed lessons from and build upon successful marketing campaigns such as Greener Scotland and existing programmes, such as Home Energy Scotland and Business Energy Scotland. We will also expand our Green Homes and Business Networks so that people can learn from households, businesses and organisations who have already taken action to make their property warmer, greener and more efficient.

Summary of action we are taking:

12. We are investing in growing our advice services so that they continue to meet people’s needs. This includes improving our digital presence and continuing to provide in-depth support for installing zero emissions heating systems.

13. We will expand our Green Homes and Business Networks so that people can learn from other householders, businesses and organisations who have already made the transition to warmer, greener and more efficient buildings.

Addressing Fuel Poverty

Today in Scotland, a quarter of households are in fuel poverty with around half of these living in extreme fuel poverty. The median fuel poverty gap in 2019 was £700 in 2015 prices. The Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019 requires that by 2040, as far as reasonably possible no household in Scotland is in fuel poverty and no more than 5% of households in Scotland are in fuel poverty and no more than 1% of households in Scotland are in extreme fuel poverty, and the median fuel poverty gap is no more than £250 adjusted for 2015 prices (see figure overleaf).

Consultation respondents highlighted the importance of the just transition and fuel poverty. Issues raised were mainly linked to the financial impact of the net zero transition on consumers as heating costs – capital and running – can be higher for zero emissions heating in some settings than the fossil fuel incumbents, underscoring the importance of appropriate support being available for consumers, particularly those in fuel poverty. As we scale up deployment of energy efficiency measures and zero emissions heating systems, we need to support people through the heat transition, and continue to work more widely to tackle fuel poverty. We will set out our approach to eradicating fuel poverty in the Fuel Poverty Strategy by the end of 2021.

We know that the prevalence of fuel poverty is higher in remote rural (43%) and remote small towns (34%)^[xxxiv]. One important reason for this is that not all of these households have access to the gas network, since the fuel poverty rate for homes with electricity as their primary heating fuel is 43% compared to 22% for gas^[xxxv]. The majority of households using electricity in Scotland, whether in urban or rural settings, currently rely on traditional emitters such as storage heaters^[xxxvi].

Zero emissions heat running costs

The running costs for zero emissions heat systems depend on a variety of factors, including how well insulated and how large the building is, the efficiency of the heating system, and the price of energy offered by energy suppliers.

Heat pumps are a key zero emissions technology, and a very efficient way of using electricity to provide heat^[6]. Although one kWh of electricity is currently more expensive than one kWh of gas (by a factor of about 4-5), the higher efficiency of a heat pump means the amount of energy needed can be less than a third the amount of energy needed by a gas boiler to produce an equivalent amount of heat.

This means that for some properties, heat pumps can help reduce bills where they are replacing older, more inefficient oil and gas heating systems, or where they are combined with upgrades to the efficiency of the building’s fabric. Increasingly there is also the option to deploy heat pumps alongside other measures such as solar PV or battery storage to help further reduce electricity bills.

However, when a heat pump replaces a modern, efficient gas boiler, the greater efficiency of the heat pump may be insufficient to offset the higher price of electricity and the household’s running costs may therefore increase. This is why, as set out in Chapter 10, we continue to urge the UK Government to rebalance energy prices to reduce the difference in unit costs between gas and electricity.

Heat networks are also a key strategic zero emissions heat technology. The Competition and Markets Authority found that up to 90% of heat network customers enjoy similar, or lower, bills than those with standard gas boilers^[xxxvii] and heat networks can cut both emissions and bills.

High standards of energy efficiency are essential to reduce the overall demand for energy. Alongside energy saving behaviours these measures can help to ensure running costs remain affordable. We will continue to take a fabric first approach as it underpins the successful roll-out of low and zero emissions heating, as well as being an important aspect of tackling fuel poverty.

Fuel Poverty Targets

In the year 2040, as far as reasonably possible no household in Scotland is in fuel poverty

No more than 15% of households in Scotland are in fuel poverty

No more than 5% of households in Scotland are in extreme fuel poverty

The median fuel poverty gap is no more than £350.

2030

No more than 10% of households in Scotland are in fuel poverty

No more than 3% of households in Scotland are in extreme fuel poverty

The median fuel poverty gap is no more than £300.

No more than 5% of households in Scotland are in fuel poverty

No more than 1% of households in Scotland are in extreme fuel poverty

The median fuel poverty gap is no more than £250.

Improving the energy efficiency of our homes helps to reduce fuel poverty (See figure above)^[xxxviii].This does not guarantee that a household will be removed from fuel poverty owing to other drivers of fuel poverty, namely low income and high fuel prices. However, even where a household remains in fuel poverty after extensive retrofit, the enhanced energy efficiency will often reduce the depth of fuel poverty and provide them with improved levels of comfort.

As set out in the 2018 Energy Efficient Scotland Route Map, we believe that homes with households in fuel poverty should reach higher levels of energy efficiency. We want all fuel poor households to benefit from an energy efficiency rating equivalent to EPC C by 2030 and equivalent to EPC B by 2040.

These targets for fuel poor homes will guide our national and area-based Heat in Buildings domestic delivery programmes. This will mean maximising the level of improvement possible in each home in line with overall cost-effectiveness principles.

As we transform our homes and buildings over the next two decades it will be imperative that we do so in a way that continues to help eradicate fuel poverty and protect our most vulnerable citizens. It will also be important that we protect, and wherever possible, enhance the competitiveness of Scottish businesses.

We will continue to build the evidence base on the interactions between our fuel poverty and climate commitments, and apply that knowledge to our policy design and to our programmes: mitigating any risk of unintended consequences, tracking progress, and learning by doing in order to adjust immediately where unintended consequences nevertheless arise. Where the actions within this strategy have the potential to impact on fuel poverty we will undertake an assessment to understand what those impacts will be. We will only take forward actions where they are found to have no detrimental impact on fuel poverty rates, unless additional mitigating measures can also be put in place. To do this, we will be guided by the following principles.

Guiding principles to ensure alignment with fuel poverty objectives

1. We are committed to ensuring that poor energy efficiency is removed as a driver of fuel poverty. As such, improving the fabric of buildings will be central to how we decarbonise heat.

2. We recognise that heat decarbonisation is essential to address the climate emergency, and that in decarbonising our homes we must not make fuel poverty worse. We commit to delivering measures to help those in fuel poverty to manage their running costs. As such, it is essential that, whenever possible, measures that both promote decarbonisation and lower fuel costs are supported.

3. We will assess our heat in buildings capital delivery programmes for their impact on those households experiencing fuel poverty– both at installation and throughout their lifespan. This assessment should be proportionate to the expected impacts.

4. Where an intervention can lower running costs, fuel poor consumers should be targeted for support as soon as possible, including support for the up-front installation costs of these measures. Factors affecting the ability of consumers experiencing fuel poverty to take up these measures should be considered as part of this process, as should the provision of advice and support to ensure that households in fuel poverty derive the maximum benefit from new measures.

5. We will develop mitigation measures to be deployed across our capital funding programmes where there are demonstrable cost increases on those in or at risk of fuel poverty. Success of these measures should be regularly assessed and, if appropriate, these measures should be adjusted to better meet the needs of these households.

6. In cases when zero emissions heat interventions are assessed as likely to increase energy costs even after mitigation measures are put in place, government supported measures should be focused on consumers who are not at risk of fuel poverty.

7. In some cases, wider change will be needed for decarbonisation measures to become suitable for those in fuel poverty, including areas that are reserved to the UK Government. We will continue to urge the UK Government to take necessary action in reserved areas and will use the research and practical experience gained through our decarbonisation schemes to support us in building appropriate evidence and pushing for systemic improvements.

8. Communications should be presented in formats accessible to a wide range of consumers, taking into account differing circumstances and accessibility needs.

These principles give a direction for programme and policy development recognising the twin challenges of decarbonising and tackling fuel poverty. Much of the real impact felt by people will, however, come down to the specifics of how we design, assess and target interventions, including in any regulation for energy efficiency and zero emissions heating, and the mitigations that we are able to put in place in cases where our aims for fuel poverty and decarbonising buildings don’t naturally align.

We will work quickly to develop more detailed, and where necessary programme or policy specific, guidance in these areas in accordance with these guiding principles. We are currently establishing a statutory Scottish Fuel Poverty Advisory Panel alongside the development of our upcoming fuel poverty strategy and as part of its role in overseeing the Scottish Government’s progress in reaching the fuel poverty targets, the panel will provide expert advice on how to ensure those in or at risk of fuel poverty are not adversely impacted by our decarbonisation efforts.

We will reshape and target our energy efficiency and heat programmes. We will continue to use our delivery programmes to target support to fuel poor households, to maximise the number of households in fuel poverty achieving a level of energy efficiency equivalent to EPC C by 2030 and EPC B by 2040. We will take a zero emissions first approach (see below), where it is technically feasible and will not increase fuel poverty.

Case Study: Heat Pump installation in Orkney

There are examples of projects delivered through our existing energy efficiency and heat schemes, that have provided zero emission heating systems and improved insulation that reduced both carbon emissions and fuel bills. For example, an increasing number of heat pumps are being installed to address fuel poverty through our Warmer Homes Scotland programme. Feedback received from households suggests many are benefiting from consistently warmer homes, and in some cases cheaper bills, when switching from predominantly old electric storage heaters to air source heat pumps.

An example is Mr K from Orkney. Mr K was living with an inefficient heating system that was very expensive to run despite it not even heating the whole house. Mr K knew he could not afford to keep paying the bills every month. With help from Home Energy Scotland, Mr K accessed support for installing a heat pump.

Mr K has already noticed a difference in his bills and quality of life:

“Our bills have decreased by half since we installed the air source heat pump and this will save us around £1000 a year, maybe even more. We are also warmer and we are living in a comfortable home where you don’t have to wear coats in the house to keep warm. People actually come to our house to visit us now because it’s so warm and their home is cold, so they visit us to keep warm and have a cup of tea. It’s a magical system, more people should know about this and the impact it could have on older people’s lives.”

We remain committed to phasing out funding for fossil fuel heating systems by 2024 across our programmes except where this does not align with our fuel poverty principles, or in exceptional circumstances where extremely vulnerable people might require urgent solutions.

From Monday 6 September 2021 new applications for oil and LPG boilers have no longer been available through Warmer Homes Scotland, Area Based Schemes or Home Energy Scotland Loans. We are adopting a “low and zero emissions heating system first” approach (see Chapter 6) and have increased our investment in whole house retrofits benefitting fuel poor households. We also intend to target those households who can benefit most from installing a heat pump or connecting to a heat network.

Our advice and support programmes will continue to support energy efficiency measures, and for those households requiring additional support these services will continue to provide help on tariff switching, energy behaviours and make onward referrals to ensure that all households receive the support for which they are eligible. Being on the right energy tariff can have a significant impact on bills.

Taking a ‘Low and zero emissions heating system first’ approach

Households will be offered a low or zero emissions heating systems in the first instance, but we will avoid installing these systems in households where it would push them into fuel poverty or worsen the depth of fuel poverty. Where installing a zero emissions heating system would have a detrimental effect on fuel poverty we will support the household to install energy efficiency measures and in the short term will continue to support the installation of replacement gas boilers under our Warmer Homes Scotland scheme. We are extending our support for fuel poor households to include secondary technologies, such as solar PV and battery storage, to help reduce running costs and peak demand for electricity. We will undertake further research to assess the scope to scale up this approach and evaluate impact.

We continue to engage with Ofgem and energy retailers, encouraging the development of new tariffs tailored to zero emissions heating systems. This is particularly important for all forms of electrified heat. We will continue to press for reforms so that customers with pre-payment meters are able to access similar tariffs to direct debit customers. We continue to engage with Smart Energy GB, Energy UK, BEIS and the wider energy market to push for more households to be able to benefit from smart meters in order to access the low and zero carbon technologies that these can unlock.

We will work with network companies to ensure vulnerable households moving to heat pumps are identified in distribution network operators’ vulnerable customer strategies. These customers’ needs can then be prioritised in the event of any loss of service.

We are conducting analysis to consider the distributional impacts of decarbonising our homes and buildings and to further quantify the impact of making our homes and buildings warmer, greener and more efficient for those on lower incomes and those in or at risk of fuel poverty. This work is also considering options to mitigate any negative impacts which can be implemented over the longer term.

Small-scale renewable generation and storage, including solar thermal and photovoltaic (PVs), thermal and battery storage could potentially provide a source of energy and flexibility for consumers, helping to reduce bills and tackle fuel poverty. We have supported a number of projects which have set out to demonstrate the role of domestic scale renewable generation and storage in alleviating fuel poverty. We will evaluate these projects to understand further the impact of this system-based approach. We will use our findings to assess the benefits of investing further in micro-generation and storage measures, alongside energy efficiency and zero emissions heating measures.

Summary of action we are taking:

14. We have published here a set of guiding principles to underpin our commitment that no one is left behind in the heat transition, ensuring we only take forward actions where they are found to have no detrimental impact on fuel poverty rates, unless additional mitigating measures can also be put in place.

15. We continue to build the evidence base on the interactions between our fuel poverty and climate commitments, and are applying that knowledge to our policy design and to our programmes, mitigating any risk of unintended consequences, and tracking progress and learning by doing in order to adjust immediately where unintended consequences nevertheless arise.

16. We continue to prioritise energy efficiency measures through our delivery programmes, as this will enable the roll-out of zero emissions heating, as well as help to tackle fuel poverty.

17. We are taking action through our delivery programmes to maximise the number of homes with households in fuel poverty achieving a level of energy efficiency equivalent to EPC C by 2030 and EPC B by 2040.

18. We are taking a zero emissions first approach in our delivery programmes and will phase out funding for fossil fuel heating systems by 2024, where it is not detrimental to our fuel poverty objectives. We have already phased out oil and LPG boilers from Warmer Homes Scotland, Area Based Schemes or Home Energy Scotland Loans.

19. We will continue to work with energy retailers to ensure households have access to the right tariffs, that tariffs tailored to zero emissions heating systems are available, and continue to press for customers with pre-payment meters to access similar tariffs to direct debit customers.

20. We are conducting analysis to consider the distributional impacts of decarbonising our homes and buildings and to further quantify the impact of making our homes and buildings warmer, greener and more efficient for those on lower incomes and those in or at risk of fuel poverty.

Consumer Protection

Consumer organisations have highlighted consumer protection and mis-selling in the zero emissions and energy efficiency sector as an area of current and growing concern as the rate of installations increases, and have highlighted the opportunity to improve reporting and redress systems for consumers. In the worst cases, consumers have been victims of scammers who actively set out to deceive them; they have incurred significant costs and ended up with measures that are poor quality or dangerous.

Consumer protection is reserved to the UK Government, with only powers over consumer advocacy and advice devolved to Scottish Ministers. We are therefore currently unable to create a statutory consumer protection framework for heat and energy efficiency. However, positive steps have been taken by Home Energy Scotland, Trading Standards Scotland and others to raise awareness of scams, and support consumers to find reputable installers. We are committed to ongoing monitoring and to addressing the identified issues to mitigate the risk of harm to households.

As set out in Chapter 9, we are taking a proactive approach to ensuring consumers have access to high quality work. We plan to publish a separate policy statement covering quality assurance for our Heat in Buildings Strategy later in 2021.

More generally, we published our Scams Prevention, Awareness and Enforcement Strategy in March 2021^[xxxix], which will facilitate a more coordinated approach to tackling scams in Scotland. This establishes a new Strategic Partnership that will provide leadership through overseeing implementation of the new strategic framework and delivery of the key actions set out between 2021 and 2024.

As we continue to develop our heat and energy efficiency policies, regulations and delivery schemes, we will create the necessary environment to allow exemplary practice to become the norm and to ensure that confidence in energy efficiency and zero emissions heat measures is not undermined by poor or illegal practice. We will work closely with consumer groups to continuously monitor and identify potential issues and take mitigating action where they arise.

Respondents to the consultation on the draft Strategy emphasised the importance of third sector and local community groups (discussed in more detail in chapter 4). The potential of these groups to share the experiences of consumers across Scotland is invaluable. The independent Energy Consumers Commission, largely made up of representatives from third sector and grassroots organisations, could have an important role in monitoring the consumer impacts of the rollout of energy efficiency and zero emissions heating and representing energy consumer interests. This body will be incorporated into Consumer Scotland once it is established.

We will work with the Energy Consumers Commission, Consumer Scotland and a range of Scottish consumer representative organisations to ensure that issues of consumer detriment are identified and addressed, focussing on consumer understanding, accessibility, costs, redress, and support for vulnerable consumers. We will work across the energy sector to explore how best to help energy consumers understand their energy needs and the longer-term benefits of different heating technologies.

The Heat Networks (Scotland) Act introduced powers to regulate the heat networks market for the first time. Secondary legislation will include the introduction of a licensing system which will place conditions on operators to provide this essential service in line with the interests of network users. The UK Government has also confirmed that it intends to legislate in 2022 to introduce minimum consumer standards across the heat networks market, including in Scotland. We support the UK Government’s intention to legislate in this area and introduction of Ofgem as a regulator of the sector. To enable alignment of regulatory regimes we have written to the UK Government to request that its legislation provides powers for Scottish Ministers to amend the functions of Ofgem so that it may act as the licensing authority for Scotland under the provisions of the Bill. This would only be used should that be the consensus view following consultation.

Summary of action we are taking:

21. We are working closely with consumer groups to continuously monitor and identify potential issues and take mitigating action where they arise.

22. We are working with the Energy Consumers Commission, Consumer Scotland and a range of Scottish consumer representative organisations to ensure that issues of consumer detriment are identified and addressed, focussing on consumer understanding, accessibility, costs, redress, and support for vulnerable consumers.