Heat Pump Sector Deal Expert Advisory Group: final report

4. Introduction

The Scottish Government has a statutory target to reach net zero carbon emissions by 2045 and the pathway to this target recommended by its statutory adviser, the Climate Change Commission, requires all heating systems to be zero-carbon^[3]. To achieve this target will require an unprecedented rapid deployment of a technology which is mature but currently little-used in the UK, heat pumps, in both domestic and non-domestic buildings. The scale of the challenge is very great: at present only around 3,000 heat pumps are installed each year in Scotland but the country's net zero roadmap requires more than one million homes and 50,000 non-domestic buildings to convert to using zero emission heating systems by the end of this decade. Nearly all these systems will be individual air and ground source heat pumps, or connections to heat networks supplied by larger scale heat pump systems.

As stated, heat pumps are not a new technology: they are widely used in, for example, the Scandinavian countries and Japan and, as also mentioned, there is already a very limited Scottish market. There is even Scottish manufacturing capacity: Mitsubishi have a factory in Livingston producing 300,000 heat pumps and air conditioning units each year for the global market. However, for the sort of scaling up which is required to achieve net zero, there is a need to take an integrated approach involving key stakeholders in partnership and to provide clear long-term signals and support to rapidly accelerate the supply chain and markets for heat pumps in Scotland.

To take forward this approach, in the 2020/21 Programme for Government^[4], the Scottish Government committed to establishing an expert group to make recommendations to Scottish Ministers on the scope of a potential heat pump sector deal for Scotland. This group, formally known as the Heat Pump Sector Deal Expert Advisory Group and referred to in this report as the EAG, was formed in October 2020. The group was tasked with providing an interim report in spring 2021 and final recommendations before the Scottish Parliamentary summer recess in 2021: this document is the second of these and sets out the group's final recommendations.

The EAG includes a wide range of expertise and experience relevant to the sector. The group has members from manufacturers, trades bodies, electricity suppliers, social housing providers, consumer groups, standards organisations, the third sector and the public sector. Details of the full membership and terms of reference for the group can be found in Appendix 1. This wide range of expertise has allowed the group to consider not only the needs of the heat pump supply chain but also the consumers and property owners who will be affected by the low carbon heat transition and who will constitute the market for heat pumps. The group has also sought and received input from other stakeholders outside its own membership, for example local authorities and a full list of these is given in Appendix 2.