Local heat and energy efficiency strategies and delivery plans: guidance

3. Guidance to develop a Strategy and Delivery Plan

3.1. A structured approach should be used when preparing an LHEES and should broadly follow the stages set out in Figure 1.

3.2. During the development of a Strategy and Delivery plan, stakeholder engagement should be a continuous process. This engagement should be considered in the context of wider local authority engagement and aligned where possible. Text boxes have been included for each stage below to provide an indication for such activity.

3.3. Policy and strategy review

The local authority should complete a review to set out the national and local policies, targets and strategies that are linked to, impact, or could be impacted by LHEES. The review should provide an opportunity for the local authority to consider how the national policy landscape can be linked to local drivers, where LHEES is concerned, as well as setting out what the local authority should prioritise strategically across its area – these could be specific LHEES Considerations and/or wider policy ambitions.

Moreover, the local authority should capture and map from the outset key internal and external stakeholders that could support their LHEES, as well as what their own priorities are around fuel poverty, heat decarbonisation (including specifically heat network development) and energy efficiency. Stakeholder engagement should be regarded as a continuous process and should occur at each main stage of LHEES. Funding resources and support available to the local authority should also be identified and the heat in buildings regulation that LHEES should support set out. These in turn should all support any later analysis and Delivery Plan actions.

Where applicable, for example with Distribution Network Operators (DNOs) and for the development of heat networks from strategy to projects, specific engagement plans and activity should be developed that set out the main coordination and engagement considerations. These should be used during the preparation and delivery of an LHEES.

A structured approach should be taken to carrying out the policy and strategy review, with a record generated and maintained to capture the below information. This record should then be referred to throughout the development of an LHEES.

• National and regional strategies and targets;
• Local strategies and targets;
• Indicators, which are used for the core LHEES analysis and evidence base (see Annex B - Glossary for a definition of Indicators and Weightings to support understanding here);
• Internal and external stakeholders essential to delivery of the national / local strategies and targets – and their priorities;
• Funding resources available to local authorities;
• Regulation in relation to heat in buildings.

Output: a record of the policy and strategy review and stakeholder mapping activities should be produced, as well as a concise non-technical summary to support engagement with wider internal and external stakeholders.

Stakeholder Engagement

• Internal stakeholders that are to be responsible for the development and implementation of the LHEES Strategy and Delivery Plan should be identified to support internal governance and cross council coordination.
• Internal stakeholders responsible for developing local plans, strategies and policy that relate to LHEES should be identified and mapped, with a view to reflecting these priorities in the framing of LHEES. Likewise, a similar exercise should be undertaken for any relevant external stakeholders.
• For each LHEES Consideration relevant internal and external stakeholders should be identified and mapped, with a view to engaging and collaborating with them during the preparation and delivery of an LHEES.
• The mapping exercise should consider: the level of influence and impact that the local authority has on the stakeholder and; the level of influence and impact the stakeholder has on fulfilling the ambitions of LHEES.
• Key internal stakeholders should include: housing, planning, energy services, economic development, estates and community planning etc, as well as those that may be required to champion specific activity e.g. heat network development. Key external stakeholders should include: DNOs, Gas Distribution Networks (GDNs), NHS, Energy Saving Trust and Home Energy Scotland, registered social landlords, business groups, local communities and local community energy groups, existing heat network providers, producers of waste heat (e.g. industrial or energy production facilities) any delivery partners etc.
• Public sector organisations should be an early key focus to allow exploration of opportunities for coordinated action on decarbonisation of heat, including the identification of public buildings that could act as anchor loads in any heat network.

3.4. Data and tools library

A data library should be used to identify the most appropriate data and information needed to support analysis in subsequent stages of the LHEES process.

The library should capture data requirements required to complete the analysis for LHEES. These could be arranged for the LHEES Considerations collectively and could be sorted according to whether it is a core dataset, or alternative or supplementary data. Core data is regarded as essential data required to complete the LHEES analysis. Alternative or supplementary data could be data that could be used either instead of the core datasets or allows inclusion of additional information to inform specific, local priorities and targets.

The data library should be maintained and updated for all LHEES activity, acting as a record of data sets used and capturing associated detail on ownership, data sharing, key contacts etc. for future reference.

Output: a data and tools library.

Stakeholder Engagement

• Stakeholders responsible for core datasets, and if necessary, any other types of datasets should be identified and engaged with a view to supporting the data library, as well as the sharing of relevant data to prepare the LHEES.
• Any relevant stakeholder engagement plans should be referred to, for example with DNOs and other utility companies, which may allow integration of data sets if required.
• Data sharing agreements should be established if working with any consultants to prepare the LHEES.
• If core datasets such as Home Analytics, Non-domestic Analytics and the Scotland Heat Map are used, local authorities should engage with Energy Saving trust and the Scottish Government Heat Map team to ensure that these are up to date with respect to the local authority's building stock.

3.5. Strategic zoning and pathways

A baseline should be established that sets out the current building characteristics and energy efficiency and heat decarbonisation performance of the building stock at a local authority wide level.

The local authority should also complete further analysis to set out Strategic Zones and pathways for each LHEES Consideration, as far as reasonably possible. These could, for example, be split out by pre-defined geographical areas like intermediate zone or data zone or other (existing) strategic areas and would depend on the preferences and circumstances of the local authority. These spatial zones should identify potential solution(s) at a strategic level for inclusion in the LHEES Strategy. The analysis should set out the strategic starting point to support follow on generation of, and prioritisation of Delivery Areas, as well as further engagement and actions for the Delivery Plan. Furthermore, it may set out strategic areas of focus for wide scale delivery or where specific technologies may be required (without the need for further consideration of Delivery Areas etc.).

For the heat networks LHEES Consideration specifically, the local authority should complete analysis to identify zones where heat networks present a potential decarbonisation option. In relation to the requirements set out in the Heat Networks (Scotland) Act Section 47, a local authority should carry out a review to consider whether one or more areas in its area is likely to be particularly suitable for the construction and operation of a heat network. As part of this, the local authority should consider and present evidence relating to the matters set out within Section 48(1) of the Heat Networks (Scotland) Act. This evidence can be used in the presentation of potential zones for heat networks in the Strategy and to develop actions in the Delivery Plan.

Output: a baseline should be created that sets out, as far as reasonably and practically possible, the performance of all buildings in the local authority area with regards to their building characteristics including energy efficiency and heat supply, and establishes Strategic Zones with respect to the LHEES Considerations. The local authority should complete and document analysis on heat network zoning, following the review under Section 47(1). This will help comply with the requirements set out for this sub-section of the Heat Networks (Scotland) Act.

Stakeholder Engagement

• For each LHEES Consideration, relevant internal and external stakeholders should be consulted and engaged, using the Strategic Zones and pathways outputs.
• Feedback from this process should be taken into account and reflected in any refinement to the Strategic Zones and pathways.
• Any specific engagement plans from the policy and strategy review should be referred to.
• For heat networks specifically, stakeholders should be identified and engaged to sense-check zoning outputs with local knowledge. This would highlight any data issues or irregularities that show up in potential zones e.g. significant heat sources or demands that are missing or are over-representations. Additionally, engagement should support the categorisation and prioritisation of heat networks that may be considered strategically important for the local authority, and which are likely to be taken forward for inclusion in the Strategy and Delivery Plan.

3.6. Generation of initial delivery areas

The local authority should build from the Strategic Zones and pathways analysis to generate initial Delivery Areas for each of the LHEES Considerations. This analysis should be at a higher granularity than Strategic Zones and should enable the local authority to understand specific locations of potential Delivery Areas within a Strategic Zone or across the whole local authority.

In practice, this could be clusters of buildings that have similar levels of poor building energy efficiency, have similar pathways or technology interventions to decarbonise the heating system, have similar heritage status or could be a smaller subset of buildings considered as part of existing place-based or city-wide activity.

The level of granularity and the approach taken to establish initial Delivery Areas is a decision for the local authority and will need to reflect their own preferences and working practices. Nevertheless, the local authority should consider the detail included as part of the policy and strategy review and any engagement undertaken so far to support identification of initial delivery areas and focus (covered below in bullet point form), with a view to later finalising the Delivery Areas to support actions to be set out in the Delivery Plan.

• Specific priorities, local drivers and/or geographic areas that the local authority has set out as strategically important in relation to heat in buildings;
• Wider policy and programmes of work that LHEES is to support regionally and locally;
• Relevant internal and external stakeholders that should be engaged or re-engaged; for example, for the purposes of getting buy-in and developing joint-actions;
• Relevant funding and delivery programmes that could be utilised to support LHEES Delivery actions;
• Relevant regulation that could support the prioritisation of delivery;
• Consideration of constraints, resources and new/ future developments that could impact any decision to finalise a Delivery Area – this includes any level of disrepair to the building stock.

This analysis should serve as the starting point for more detailed engagement, building-level assessment of interventions and cross-checking against the policy and strategy review to enable finalisation of the Delivery Areas. These Delivery Areas should then support actions in the Delivery Plan that are within the competence of the Scottish Government, local authorities and wider partners.

Output: analysis that establishes the initial Delivery Areas for each LHEES Consideration and/or focus for Delivery Plan actions.

Stakeholder Engagement

• For each LHEES Consideration, relevant internal and external stakeholders (including local communities local community energy groups) should be consulted and engaged, to allow them to provide feedback and provide any additional local contextual information or data that could support the generation of initial Delivery Areas.
• Feedback from this process should be taken into account and reflected in any refinement to the initial Delivery Area analysis.
• Any specific engagement plans from the policy and strategy review should be referred to.

3.7. Building-level pathway assessment

An assessment should be undertaken at the building-level to establish in more detail the type of intervention(s) required to decarbonise the building from a heating and energy efficiency perspective. This assessment should focus in particular on buildings that fall within initial delivery areas to help support decisions for finalising delivery areas and actions for the Delivery Plans. This assessment should also show regard for the costs and carbon savings associated with the interventions. An example tool that could be used for this assessment for the domestic building stock is the Energy Saving Trust's PEAT tool – available to all local authorities.

Aggregation may be required either at the strategic planning level or at a delivery level, depending on whether it is to inform the Strategy or actions in a Delivery Plan. Consideration should be shown with respect to the building owner/operator, as a means to support engagement, planning and investment (as part of any Delivery Plan actions).

Whilst there is no formal requirement to undertake socio-economic or techno-economic analysis in the development of LHEES Strategies, local authorities should consider any wider analysis that may be required to support their LHEES, or importantly, to include the analysis as an action in the Delivery Plan e.g. the completion of feasibility studies to support heat network development.

Output: for any initial Strategic Zones or Delivery Areas, a building-level pathway assessment of the domestic building stock, summarising at a building-level or aggregated level an indication of the potential measures, costs and CO2 abatement involved with improving energy efficiency and low carbon heat performance. As far as reasonably relevant and possible, a similar exercise for the non-domestic building stock.

Stakeholder Engagement

• Key stakeholders should be engaged on a) the initial delivery areas and/or buildings that are to be assessed and b) the outputs of any building-level pathway assessment undertaken.
• This could be internal stakeholders responsible for investment and delivery or external stakeholders that will be required to invest in their own building stock e.g. building owners and the wider community.
• Any specific engagement plans from the policy and strategy review should be referred to.

3.8. Finalisation of Delivery Areas

The finalisation of Delivery Areas will be an important starting point for identifying a range of projects and actions that are within the competence of the Scottish Government, local authorities and wider partners (included as actions to be developed in the LHEES Delivery Plan).

The local authority should consider the Strategic Zones, initial Delivery Areas and any building-level assessment alongside the detail included as part of the policy and strategy review and any engagement undertaken so far. Specifically, the local authority should review the checks set out when generating the initial Delivery Areas, with a view to now finalising these to support actions to be set out in the Delivery Plan. Importantly, this cross-checking should be regarded as a two-way process, with the finalisation of Delivery Areas and cross-checks from the policy and strategy review informing each other. The number of Delivery Areas will be informed by this process, as well as the type of actions taken forward in the actual Delivery Plan. Furthermore, it is recognised that not all buildings within a Delivery Area may be suitable for the particular heat decarbonisation solution proposed.

In terms of heat networks, following the 'Strategic zoning and pathways' stage, zones that are to be presented in the Strategy should be agreed and finalised. Again, checks against the points set out when generating the initial Delivery Areas should also be considered here, as well as how the local authority intends to progress from the LHEES to the development of a pipeline of work. This finalisation may be in relation to areas designated as heat network zones (in accordance with the Heat Networks (Scotland) Act); areas where the local authority consider the area likely to be particularly suitable for the construction and operation of a heat network and; other areas that may be considered as being of strategic importance for the local authority (e.g. wider area development and other local authority priorities).

The specifics for the finalisation of Delivery Areas and resultant actions in the Delivery Plan will be unique to each local authority. Furthermore, it is expected that any generation of Delivery Areas and subsequent finalisation will be an iterative process that is updated on an ongoing basis and reflected alongside actions in the Delivery Plan.

Output: the finalisation of Delivery Areas to support and accompany actions set out in the Delivery Plan.

Stakeholder Engagement

• Relevant internal and external stakeholders should be consulted and engaged, to allow them to provide feedback on a) the analysis and outputs of the work to date and b) the outcomes of the cross-checking against parts of the policy and strategy review record.
• Engagement should seek to finalise the Delivery Areas to support actions to be set out in the Delivery Plan, including the finalisation of any heat network zones.
• Any specific engagement plans from the policy and strategy review should be referred to.