Heat Networks (Scotland) Bill: BRIA

Implementation and Delivery Plan

76. The evolving nature of the technology and heat networks market in Scotland requires a regulatory system which will be able to adapt to the development of new ownership structures, new technological solutions as well as different sources of finance. To enable that flexibility, the Heat Networks (Scotland) Bill introduces elements of regulation that can evolve and be adapted with time by delegating powers over development of processes and guidance to the Scottish Ministers.

77. The development of regulatory system is expected to take approximately 2 years following the Heat Networks (Scotland) Bill receiving Royal Assent.

78. A total of 51 provisions create powers that enable Scottish Ministers to make further regulations which are likely to require further consultation with stakeholders. In order to develop a range of statutory instruments, directions and guidance introduced by the Bill, the Scottish Government will engage a number of technical specialists and stakeholders to ensure that the regulation is suited to the needs of consumers and the sector.

79. The Heat Networks Regulation Working Group established in May 2019 will continue to support the Scottish Government as it develops subsequent regulation. It is also expected that approximately 4 public consultations will be required during the transition period.

80. A dedicated team within the Scottish Government will develop a series of Scottish statutory instruments, orders and guidance needed to implement heat network licensing, consents, heat network zoning, permits and additional rights and powers for licence holders. It is envisaged that the team will be operational for two years and will be working closely with any designated licensing authority to design an adequate licensing system. Any regulatory elements will be developed by the same team in consultation with wider Scottish Government directorates and relevant Scottish stakeholders as described above.

81. Following the 2 year transition period, each of regulatory elements will fall within the responsibility of the authority identified in the Bill:

• Heat Network Licensing – Licensing Authority (Scottish Ministers or other designated body)
• Heat Network Consents – Enforcement Authority (Scottish Ministers or other designated body)
• Heat Network Zones – Local Authorities and Scottish Ministers
• Heat Network Permits – Permit Authority (Scottish Ministers or other designated body)

82. The Financial Memorandum outlines costs associated with the implementation of Heat Networks (Scotland) Bill provisions over first 2 years as well as costs associated with implementation of the regulatory elements across 10 years following the Bill receiving Royal Assent.

Implementation Period

83. The Bill will be implemented over 2 years following the granting of Royal Assent. Due to their dependency on designation of Heat Network Zones which are expected to occur in year 3, the Heat Network Permits are expected to start being awarded from year 4.

Post-Implementation Review

84. Scottish Ministers or designated bodies acting as Licensing Authority, Enforcement Authority and Permit Authority will be responsible for monitoring of implementation of proposals and state of the market to determine whether the overall purpose was achieved.

85. As part of the delivery plan a formal post-implementation review will take place within 10 years of this Bill coming into force. Each individual subsequent regulation will have its individual 10 year review.