Heat Networks Delivery Plan: review report 2024

Footnotes

1 The CCC’s recommended Balanced Net Zero Pathway in its Sixth Carbon Budget Report sets out that by 2050, around a fifth of heat is distributed through heat networks, from 2025 all new heat networks are low carbon and existing networks decarbonise by 2040.

2 As non-electrical heat consumption changes over time so does this percentage. Using the 2022 provisional figure for non-electrical heat consumption (see footnote 5) the percentage is 1.9%.

3 The report laid before parliament must consider: (a) how the 2021 Act and associated policies have contributed to an increase in the use of heat networks in Scotland in the reporting period, (b) what progress has been made in the aggregate heat output of all heat networks in Scotland in the reporting period and, in particular, in meeting the targets specified in the 2021 Act (section 92(1)), (c) how the deployment of heat networks in Scotland has contributed to meeting emissions reduction targets set in the Climate Change (Scotland) Act 2009 during the reporting period.

4 Our quarterly Heat Network Projects report lists all supported projects.

5 Recent research (Cost Analysis of a Typical 4th and 5th Generation Heat Network) commissioned by Scottish Enterprise has highlighted the economies of scale that can be obtained when developing heating networks. The report identified this as particularly significant for thermal storage and air source heat pumps. The £/kW installed capacity decreases according to installed capacity, making larger energy centres / substations more cost-effective.

6 As non-electrical heat consumption changes over time so do these percentages. Energy consumption figures for Scotland are derived from subnational consumption figures produced by the Department for Energy Security and Net Zero. To calculate total non-electrical heat consumption, we combined updated gas consumption figures for 2022 and residual fuel consumption (oil, coal, bioenergy) from 2021, producing a provisional figure of 71.3 TWh for 2022. This figure is provisional because the residuals fuel consumption figures will be confirmed in September of 2024. These percentages use the provisional 2022 figure for non-electrical heat consumption.

7 We modelled a number of scenarios providing a range of connections of non-domestic buildings and home. These can be viewed in Consultation on a 2035 heat networks target (see previous footnote).

8 As non-electrical heat consumption changes over time so does this percentage. Using the 2022 provisional figure for non-electrical heat consumption (see footnote 2) this percentage is 9.8%.

9 Heat networks - thermal energy target 2035: Analysis of responses to the consultation

10 The Heat Networks Metering an Billing Regulations (HNMBR) 2014 require heat networks to notify and provide certain data to the regulator. Our best estimate of heat supplied via heat networks for 2022 is based on HNMBR notification data spanning from 2014-2022, aiming to provide an estimate on the whole known heat network sector in Scotland, including known networks that have not notified in the latest data cycle (2018-2022). Our estimate relies on limited data with concerns about its quality. This includes: poor data coverage in key areas which required modelling to fill in the gaps, lack of information around decommissioning of networks, and issues surrounding enforcement of notifications. All of the above factors limit our ability to estimate the true size of the heat networks sector in Scotland or the total amount of heat supplied.

11 Experimental statistics recently published by UK Government estimate heating supplied via heat networks in Scotland at 0.575 TWh. However, only the most recent HNMBR notification data spanning 2018-2022 has been used to develop this estimate, which we know excludes some large networks in existence.

12 As non-electrical heat consumption changes over time so does this percentage. Using the 2022 provisional figure for non-electrical heat consumption (see footnote 5) the percentage is 1.9%.

13 Greenhouse gas emissions and technical standards are addressed in Scotland under the 2021 Act.

14 The Heat Networks (Heat Network Zones and Building Assessment Reports) (Scotland) Regulations 2023 (legislation.gov.uk)

15 Section 67(a) of the 2021 Act defines public sector as “a Scottish public authority within the meaning of section 3(1)(a) of the Freedom of Information (Scotland) Act 2002”.

16 Completed BARs must be submitted to both the relevant local authority and Scottish Ministers.

17 Supporting documents - Heat networks: Building Assessment Report (BAR) guidance - gov.scot (www.gov.scot)

18 We engaged with different public sector organisations both before and after these duties came into place. This included writing to all of the Scottish public sector regarding the BAR duty, attending multiple events that highlighted the duty or covered BAR and HNZ in detail

19 (14 February 2024) We are aware a number of public sector organisations are waiting for the online platform to be complete before submitting their BAR.

20 We updated the optional technical methodology for developing LHEES to ensure it includes relevant requirements of the 2021 Act for reviewing areas that may be particularly suitable for heat network development and operation and shared this with local authorities in 2022.

21 Projects will be required to submit as part of their application that they will meet the expected level of service and quality alongside information on the complaints process.

22 For more information on the HNSU project and strategic support described in this Section, interested parties can get in touch with the HNSU (heatnetworksupport@gov.scot).

23 Strategic Heat Network Support - Heat Network Support Unit

24 Heat Network Delivery Models Report published by The Scottish Government, February 2024.

25 Scotland’s Heat Network Fund provides funding for: new zero emission heat networks, including communal heating systems; expansion of existing heat networks, with requirements to install additional zero emission generation; and decarbonisation of existing fossil fuelled heat networks.

26 We will be asking applicants to submit BAR information on the online platform (see Section 4).

27 The Local Heat and Energy Efficiency Strategies (Scotland) Order 2022, came into force in May 2022, placing a duty on local authorities to produce Local Heat and Energy Efficiency Strategies and Delivery Plans by the end of 2023. LHEES guidance was published in October 2022. The guidance sets out what local authorities are required to do to meet the LHEES duty. The optional LHEES methodology consists of practitioner guidance, tools and templates to support local authorities to produce their LHEES.

28 Calculation based on the potential identified for between 1.31 to 4.47 TWh of heat per year to be supplied by heat networks and an estimated heat demand for Glasgow - using the Scotland Heat Map - of 6.27 TWh/yr.

29 Policy 19 can be viewed in Part 2 – National Planning Policy of the NPF4.

30 The introduction of these regulations build upon the recent uplift in energy standards in Scotland and complement the incoming Passivhaus equivalent standard which will ensure new buildings have the highest level of energy efficiency – reducing the overall heat demand in new homes and removing poor energy efficiency as a driver of fuel poverty.

31 Data source was Potential sources of waste heat for heat networks in Scotland, published by ClimateXChange in 2020. Ten types of potential heat sources were considered in this study: distilleries, breweries, bakeries, paper and pulp, laundry, supermarkets, data centres, substations, waste water treatment plants and landfill.

32 The data will also be incorporated into future updates to the Scotland Heat Map.

33 The Non-Domestic Rates (District Heating Relief and Renewable Energy Generation Relief) (Scotland) Amendment Regulations 2021 introduced a 90% relief from non-domestic rates for new networks run from renewable sources until 31 March 2024.