Heat networks delivery plan

Chapter 1: Introduction

Last year the Scottish Parliament passed the Heat Networks (Scotland) Act 2021 (hereafter referred to as the "2021 Act") creating for the first time in Scotland, and the United Kingdom, legislation intended to support and encourage the development of communal and district heat networks.

Heat networks are an established technology and are common in the Nordic countries and across much of Northern Europe. In Scotland they are currently less common and at present^[1] there are an estimated 1,080 heat networks supplying heat to domestic and non-domestic properties. Around 30,000 homes and 3,000 non-domestic properties are connected to heat networks. The latest figures suggest that heat networks in Scotland supply upwards of 1.18 TWh of heat.

What is a heat network?

Heat networks, as defined under the 2021 Act, include both district and communal heating:

• a district heat network is defined as a network by which thermal energy is distributed from one or more sources of production to more than one building
• a communal heating system is a system by which thermal energy is distributed from one or more sources of production to one building comprising more than one building unit

A heat network, despite its name, can provide both heating and cooling. Heat networks operate at a range of temperatures: third and fourth generation systems generally provide hot water at between 60 and 100 degrees Celsius and fifth generation systems generally operate at temperatures of up to 45 degrees Celsius. They can also provide steam for industrial processes.

Heat networks, depending on their fuel source, can help reduce greenhouse gas emissions. They can also, in certain circumstances, reduce energy bills helping to tackle fuel poverty. As such heat networks have an important role to play in meeting the targets set out in the Heat in Buildings Strategy, including contributing to ensuring that at least 1 million homes, and the equivalent of 50,000 non-domestic buildings are connected to zero emission heating systems by 2030.

How big a role heat networks will have, beyond the 2030 target of the 2021 Act, will depend on a number of factors including location and viability relative to other zero emission solutions. However, the report Opportunity Areas for District Heating in the UK estimated that by 2050 heat networks may be suitable for providing up to 15 TWh of heat in a year (central scenario). By comparison, 13.7 TWh of total demand from buildings in potential heat network zones was identified through the First National Assessment^[2]. These estimates are likely to represent the upper bound of potential with further detailed assessment – both technical and socio-economic – required to identify viable heat network projects that are competitive against alternative zero emission heating systems within areas of heat network potential.

Heat networks are a heat supply technology and can be powered by a range of different technologies. For example, they can use heat generated from gas or biomass fired boilers or combined heat and power (CHP) engines, or from electrically driven heat pumps. They can also use recovered or waste heat such as from industrial processes, data centres or from Energy from Waste facilities. The design of heat networks enables new heat sources to be added in the future. As such, heat networks are a low or no regret technology and compatible with both electrification and hydrogen scenarios for heat supply in the future. Heat networks can also have an important role in balancing wider energy networks, helping to store energy and make use of constrained renewable electricity generation.

Section 93 of the 2021 Act requires Scottish Ministers to prepare a heat networks delivery plan, to be laid in Parliament no later than 1 April 2022, setting out how the provisions of the 2021 Act, and any other supporting policies, will contribute to increasing the use of heat networks in Scotland. Specifically, a heat networks delivery plan must set out:

• the approach the Scottish Minsters intend to take to increase the use of heat networks in Scotland
• how the Scottish Ministers propose to meet the targets specified
• how output from heat networks will be measured
• how the deployment of heat networks will contribute to meeting emission reduction targets

This document fulfils this requirement. A draft Heat Networks Delivery Plan was subject to public consultation between 15 November and 13 December 2021.

Where appropriate this document refers to the analysis of consultation responses received. In total 48 responses were received to the consultation. Further detail can be found in the consultation analysis report which has been published alongside this document.

The consultation document contained two parts – Part 1 (draft Heat Networks Delivery Plan) and Part 2 (Heat Network Policy Proposals). Responses to Part 1 have informed the development of the final Heat Networks Delivery Plan. Responses to Part 2 will inform the ongoing development of the Scottish Government's policy and delivery framework for heat networks.

Wider heat policy

This Plan sits in the context of wider heat decarbonisation policy, in particular, the Heat in Buildings Strategy, which highlights that over the coming years the Scottish Government proposes a focus on the no and low-regrets strategic technologies, of which heat networks is one. Detail on the other technologies and the approach to those can be found in the Strategy.