Heat Networks Regulation Working Group: recommendations

Context

1. On 22 November 2018, the Minister for Energy, Connectivity and the Islands announced that the Scottish Government would begin preparing legislation to introduce regulation to the heat network sector in Scotland^[1], following two earlier consultations^{[2] [3]}.

2. On 14 May 2019, the Minister invited stakeholders to form the Heat Networks Regulation Working Group to support the preparation of legislation, by using its expertise and experience to advise on a regulatory framework which the Scottish Government had developed.

3. During the course of the Working Group, the Scottish Government's Programme for Government confirmed that a Heat Networks Bill would be introduced to the Scottish Parliament (subject to the way in which the UK leaves the European Union).

4. The Working Group was also invited to make recommendations regarding other Scottish Government policy that it sees is key to supporting the regulatory framework, or which may otherwise support the deployment of heat networks in Scotland.

5. The Working Group was asked to consider the legislative competence of the Scottish Parliament. In summary, the following levers are devolved to Scotland:

• Building Standards: we can set emission standards for heating systems and standards for overall energy use and environmental impact of buildings (new build and existing);
• Regulation of Heat (including Heat Networks): technical standards, consenting, etc. (but not consumer protection);
• Grants, Loans and Advice Support Schemes: for example, Energy Efficient Scotland, District Heating Loan Fund (DHLF), Home Renewables Loans, etc. Home Energy Scotland & Resource Efficient Scotland advice services; and
• Innovation & Commercialisation Support: such as the Low Carbon Infrastructure Transition Programme (LCITP).

6. Meanwhile, the following levers remain reserved to the UK Parliament:

• Gas Network: standards and quality i.e. what goes through the pipes;
• Consumer Protection;
• Price signals: e.g. tax, levies and charges in relation to gas.