Heat in buildings strategy: business and regulatory impact assessment

9. Scottish firms impact test

The objectives of the Heat in Buildings Strategy will have two broad categories of impact on firms in Scotland:

• Impacts on firms in the energy industries and zero emissions heat supply chains
• Switching buildings from fossil fuel heating systems to zero emissions will reduce demand for the manufacture, installation and maintenance of fossil fuel heating systems, and in the extraction, refinery and supply of these fuels. Demand for zero emissions heating technologies will increase. On balance, it is likely that the net effect on employment will be positive with more jobs created in manufacturing and services than are displaced. The Scottish Government commissioned a study of the economic impacts of the heat transition which estimated that an additional 16,400 jobs will be supported across the economy in 2030 as a result of investment in the deployment of zero emissions heat.
• The impact on individual firms involved in heating technology supply chains will depend on the extent to which they switch technology focus.
• The development of a market for zero emissions heating systems in Scotland on a faster timescale than the rest of the UK has potential to build competitive advantage for firms active in Scotland to then deliver products and services in the rest of the UK.
• Impacts on firms as owners / occupants / users of buildings.
• The transition to zero emissions heat will likely on average create a net lifecycle cost at building level relative to continuing the use of incumbent fossil fuel technologies. The size of this cost (and hence firms' competitiveness with others not facing equivalent costs) will be dependent on developments across energy markets, reserved energy policy, financing options and subsidies.

For this BRIA, these impacts have been judged qualitatively. This reflects the high-level, strategic nature of the Heat in Buildings Strategy and the dependence of impacts on future decisions.