Local heat and energy efficiency strategies and delivery plans: guidance

4. Producing Strategy and Delivery Plan Documents

Local Heat and Energy Efficiency Strategies

4.1. The first LHEES Strategy should present an understanding, at local authority level and across the LHEES Considerations, of the scale of the challenge for heat decarbonisation and energy efficiency improvement, alongside a strategic assessment of potential pathways, identifying areas where focus might be placed in terms of further engagement and delivery.

4.2. The approach taken and form of a local authorities' Strategy and Delivery Plan will be shaped by local context and priorities.

4.3. The target audience for the Strategy is local authorities, potential stakeholders (DNOs, GNOs, utilities etc.), potential developers (e.g. for heat networks), the general public, community groups, the Scottish Government and delivery partners.

4.4. A public consultation should be undertaken on draft Strategies and Delivery Plans before they are adopted and published. This consultation should follow the local authorities own processes and practices. Communities should be engaged during the development of the Delivery Plan to ensure local knowledge and views are considered as actions are developed.

4.5. Strategies should contain the following sections:

4.6. Overview of LHEES – an introduction to LHEES, its function and structure. Text can be taken from Section 1 of the LHEES Guidance and adapted to the local context.

4.7. Engagement and consultation – requirements for stakeholder engagement are included in Section 3. Stakeholder engagement and consultation activity across the development of a local authority's LHEES should be summarised within the Strategy. This should include:

• LHEES delivery and governance structures, overview of any stakeholder mapping exercise, specific engagement plans and a summary of any other initial engagement and coordination activity;
• A summary of engagement on the outputs associated with the generation of Strategic Zones;
• A summary of engagement regarding the identification of potential zones for heat networks;
• A summary of engagement regarding the strategic long-term plan for decarbonising heat in buildings and improving their energy efficiency across an entire local authority area.
• As well as stakeholder engagement, the local authority should carry out a consultation on the draft Strategy. A summary of this consultation and how the local authority acted on the consultation responses should be included.

4.8. Local authority progress – a short literature review on the LHEES Considerations, including the Heat in Buildings Strategy, Heat Networks (Scotland) Act 2021, and Fuel Poverty (Scotland) Act 2019, as well as local authority targets and commitments.

• To support the understanding of the reader, as a minimum this review should cover heat decarbonisation; energy efficiency; fuel poverty (with a focus on energy efficiency as a driver); heat networks; technologies and measures e.g. heat pumps, biomass, hydrogen, insulation types; and a summary of useful resources and support for energy efficiency and heating upgrades for private building owners.
• Local authorities and their wider partners will already be delivering against heat decarbonisation, energy efficiency improvements and fuel poverty alleviation. This Section should also showcase this ongoing activity.
• An important aspect of this Section is to set out where the Strategy could inform and build on this existing local activity, for example capital works programmes, progress towards EESSH and targeting for HEEPS:ABS.

4.9. Policy and strategy context - a summary of the national, regional and local heat and energy efficiency policy landscape, including a review of Scottish and UK policy and local policy and drivers relevant to LHEES.

• The LHEES Considerations should be used to identify relevant policy, e.g. policy related to heat decarbonisation, energy efficiency, heat networks and fuel poverty.
• This section should set out the relationships between national and local policy and strategy. It should also outline if there are any variations to targets at the local level, for example, if there are more stringent targets or aspirations in place, and where LHEES will sit as part of the local authority's policy and strategy portfolio.
• This is also an opportunity for local authorities to set out their own priorities for LHEES and whether any areas in the authority are of strategic importance. It should indicate how it could support decarbonisation in a wider context i.e. local energy systems, transport and any wider net-zero or climate change plans.

4.10. Considerations, Targets and Indicators – summary of the priorities, targets and indicators used to inform analysis of the LHEES Considerations. These are important as they should be used as the basis to benchmark and measure progress against in the LHEES Delivery Plan and any subsequent monitoring and evaluation activity. Given that these indicators and any associated criteria and weightings are subjective, the local authority should provide justification and rationale for these.

4.11. Baselining of local authority building performance - a thematic overview of how the local authority's building stock is performing (building characteristics, energy efficiency performance, fuel type, tenure, historic buildings etc). This could be in a tabulated format or using pie charts and graphs to create a summary of building stock performance.

• This should include an overview of the challenges and opportunities which the local authority faces in terms of heat decarbonisation (e.g. geographical, building archetype and tenure/use); comparison of local outputs with national averages where possible, to allow for more in-depth contextualisation; and any ongoing work across the local authority, which is likely to complement and support any challenges and opportunities identified.
• An examination of any core data indicators across the Strategic Zones should be included, structured for example around building characteristics (pre-1919 or construction type), energy efficiency (wall insulation, loft insulation or glazing); heating type and fuel; and tenure characteristics (social housing, owner occupied, listed buildings, mixed-tenure).
• This Section should allow for recommendations to be made that can be applied across a Strategic Zone; identification of interventions that could support a multitude of priorities and targets; and an indication of the Strategic Zones that may be a focus of more granular spatial Delivery Areas (as set out in the LHEES Delivery Plan) and near-term programmes and projects.

4.12. Generation of Strategic Zones and pathways, including Potential Zones for heat networks – in this Section the local authority should present the Strategic Zones for the LHEES Considerations. These can be visualised as maps using GIS or tabulated.

• This section should set out at a strategic level what needs to be done to change buildings and relevant local infrastructure over the next 15-20 years to fulfil the Scottish Government's objectives and local priorities relating to heat and energy efficiency in buildings. At the highest level, findings can be presented as a summary table across all LHEES Considerations.
• Building-level heat decarbonisation: the heat decarbonisation pathways should indicate the potential opportunities for building-level low carbon heat at the strategic level. This should include setting out the scale of opportunities and potential challenges for heat decarbonisation for the local authority; visualisation of the Strategic Zones and geographic layout of the opportunities for building-level heat decarbonisation; recommendations and conclusions to be made that can be applied across the Strategic Zones for heat decarbonisation; and an indication of the Strategic Zones that may be a focus of more granular spatial Delivery Areas and near-term Delivery Plan actions, as well as Strategic Zone wide heat decarbonisation interventions.
• Heat network zoning: an overview map and/or table should be created detailing the whole local authority area, highlighting the potential heat network zones within. The purpose of this is to be able to quickly examine the distribution of potential heat network zones, inform future stakeholder engagement and categorisation. High level maps of any areas of the local authority deemed as strategically important should also be presented here. This would set out, at a higher granularity, the potential for heat networks in this strategic area. If appropriate, the local authority should also present summary maps and tables for 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 Strategy should set out the scale of opportunities and potential challenges for heat networks; recommendations and conclusions in terms of heat network potential; and a consideration of next steps to progress from a strategy to a pipeline of potential heat network projects.
• Energy efficiency and other outcomes: The LHEES Considerations that focus on poor building energy efficiency, as well as mixed-tenure, mixed-use and historic buildings should start to indicate at the strategic level the potential opportunities for building-level energy efficiency retrofit and the number of buildings that may require additional focus through support and regulation in the future.
  • The Strategy should set out the:
  • scale of opportunities and potential challenges for energy efficiency retrofit (including particular consideration of mixed-use, mixed-tenure and historic buildings) for the local authority;
  • visualisation of the Strategic Zones to determine the geographic layout of opportunities for energy efficiency retrofit;
  • recommendations and conclusions to be made that can be applied across the Strategic Zones for these LHEES Considerations;
  • an indication of the scale of the challenge for energy efficiency retrofit, in particular support for households where energy efficiency may be a driver of fuel poverty;
  • the number of buildings that may require additional focus through support and regulation in the future;
  • and an indication of the Strategic Zones that may be a focus of more granular spatial Delivery Areas and near-term Delivery Plan actions.
• Whilst the main focus of this section is the presentation of Strategic Zones, the local authority may decide to present maps and information in relation to any key Delivery Areas. These may be areas or clusters of buildings that reside within a Strategic Zone, or across several that are of strategic interest for the local authority and therefore important to convey to the reader the heat decarbonisation pathway and/or energy efficiency opportunities in this area.

4.13. Summary of LHEES Strategy findings and next steps - this section should conclude the main findings set out in the Strategy, summarising clearly and concisely the outputs and next steps.

• This should set out the long-term focus of LHEES at the strategic level and areas that will require further focus as Delivery Areas and supporting actions in the LHEES Delivery Plan. It should consider the local authority building stock baseline, the Strategic Zones and the potential for heat decarbonisation with respect to the identified national and local targets and ongoing progress across existing programmes.
• The summary should include short descriptions of progress and activity and/or a series of higher-level summary tables of the local authority level heat decarbonisation potential, focussing on each LHEES Consideration, or where applicable, presented and aligned to Scottish Government regulation and standards.
• This summary should allow the local authority and other delivery stakeholders to start to consider prioritisation of delivery programmes and projects for future heat decarbonisation, as well as supporting the focus of more granular spatial areas for delivery level consideration. This activity is then to be taken forward in more detail in the Delivery Plan.
• The summary should consider now, how the content of the Strategy can be developed further to allow the local authority and wider partners to progress towards the realisation of projects in the Delivery Plan and beyond.

Local Heat and Energy Efficiency Delivery Plans

4.14. A Delivery Plan should set out how a local authority proposes to support implementation of its LHEES Strategy.

4.15. The first LHEES Delivery Plan should incorporate actions with a near-term (5-year) focus, to be published by the end of 2023.

4.16. The first Delivery Plan should be framed around what can be delivered now given the existing and known policy landscape, yet appreciate that its scope will evolve and broaden as the Scottish Government introduces future standards and regulation, as well as new delivery and funding programmes. It is expected that actions in the Delivery Plan should therefore be reviewed and updated on an ongoing basis.

4.17. Monitoring and evaluation should also be considered as part of the Delivery Plan process. Local authorities should develop a monitoring and evaluation plan (MEP), building on existing MEPs, such as those used for Local Housing Strategies. These MEPs should also set out how the local authority are working towards national and local targets and any key performance indicators. They should also set out, as far as reasonably possible, a portfolio of projects that are to be taken forward, and track progress of ongoing projects related to LHEES.

4.18. In practice, actions in the Delivery Plan should draw upon the Delivery Areas and opportunities generated as part of the LHEES process. The local authority should finalise these Delivery Areas and opportunities by considering the LHEES Strategy, initial Delivery Areas and any building-level assessment. It should also consider them alongside the detail included as part of the policy and strategy review, specifically:

• 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 that LHEES is to support regionally and locally;
• Relevant internal and external stakeholders that should be engaged or reengaged; 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.

4.19. In practice, the Delivery Plan should consider near-term actions, opportunities and priority Delivery Areas to:

• Start the process of aligning the LHEES with existing plans, programmes and activity;
• Draw on existing funding programmes and schemes for fuel poverty, energy efficiency and heat decarbonisation and consider how these could be better integrated and targeted strategically;
• Alongside the designation of heat network zones under the Heat Networks (Scotland) Act 2021, start to develop a portfolio of projects and pipeline of activity such as for heat networks identified in the Strategy – these could be district level networks or smaller communal networks;
• Engage with, and promote more effective working with stakeholders around implementing prioritised Delivery Areas;
• Develop more targeted awareness and engagement campaigns in prioritised Strategic Zones and Delivery Areas (for both the public and key stakeholders) – in particular around fuel poverty alleviation;
• Identify gaps, where existing actions in the Delivery Plan are insufficient to meet the overall requirements set out in the LHEES Strategy;
• Focus on documenting and preparing an ongoing, longer-term pathway for buildings across the local authority, based on the LHEES Strategy – including consideration of the wider supply chain, delivery structures and business needs;

4.20. Local authorities should follow a structured approach to prepare Delivery Plans that consider the five phases set out below:

Phase 1: Preparation

Phase 2: Engagement

Phase 3: Consider existing plans, programmes and activities

Phase 4: Build on the opportunities from the LHEES Strategy

Phase 5: Creating demand at scale

4.21. Phase 1 – Preparation: it is important to complete the necessary groundwork to enable the preparation of a strong Delivery Plan and wider programme of activity. The Strategy and Delivery Areas should be shared across the local authority, making sure those that need to know are involved in the development of the LHEES Delivery Plan.

• After the Strategy is complete, appropriate governance structures should be established for the purposes of delivery, monitoring and evaluation and; appropriate capacity and skills identified.
• Key stakeholders associated with delivery (internal and external) should be identified and mapped early on in the process and it is likely these may be the same stakeholders that were engaged and consulted during strategy development. Stakeholder influence and impact should also be taken into account during this exercise to support prioritisation.
• Specific engagement plans that focus on sharing the Strategy, partnering and collaboration and ultimately, delivery should be developed or refreshed for key stakeholders.
• Local authorities should start to prepare bespoke packs and presentation slides that are pitched at the different stakeholder groups, or for specific purposes (e.g. community engagement or engagement with senior Officers). This process should be iterative in relation to the Strategy content and the Delivery Plan Phases to follow.
• Examination of the Strategy may identify gaps and the need to collect more detailed data, or identify existing data sets that can be shared, or stakeholders that need to be engaged.
• Local authorities should reflect on national and local priorities and consider them against wider local needs that may have emerged. Once the Strategic Zones are set out in the Strategy, further prioritisation of outcomes will be required to determine potential programmes of work and phasing in the Delivery Plan.
• Senior LHEES 'champions' should be identified to support embedding LHEES delivery within the local authority's governance structures and processes. Other champions should also be identified that lead on other actions arising in the Delivery Plan, for example, heat network development.
• Delivery Plan actions should follow each local authority's existing governance processes for developing, testing and signing-off business cases for strategic action and investment.

4.22. Phase 2 – Engagement: LHEES will be delivered through partnering and collaborating with stakeholders and so actions should be set out in relation to this matter specifically.

• Building on Phase 1 – Preparation, an overarching approach for engagement should be set out.
• Local authorities should begin by engaging with any stakeholder groups that were established from the start of the LHEES Strategy development, with any new stakeholders identified as part of the Phase 1 – Preparation and where there are specific engagement plans in place.
• To understand the opportunities and constraints across Strategic Zones and Delivery Areas, engagement and collaboration with DNOs and local utility companies (including existing district heating networks) is essential. Input and data from utility companies should build a picture of opportunities, constraints, challenges and any need for further discussion and input from the utility companies.
• In this Phase, the local authority should work towards developing actions that can be finalised as part of the next three Phases to follow.

4.23. Phase 3 - Consider existing plans, programmes and activity: where existing programmes of work or awarded funds are available across the local authority, actions should help enable local authorities to progress immediately with their Delivery Plan and LHEES work.

• Crossovers between the Strategic Zones and Delivery Areas identified as part of LHEES and other existing plans and strategies should be considered for opportunities for mutual benefit between them. This will involve gaining wider value from combining Delivery Plan actions with other fuel poverty and social care, economic, regeneration, heat decarbonisation, skills and employment plans and policies, benefitting from common resources and funding mechanisms in near-term projects.
• In parallel with identifying the fuel poverty and heat decarbonisation interventions required, local authorities should consider supporting the wider actions and activities required to create a long-term pipeline of projects and the support they need to do this. The Strategy and initial Delivery Areas should provide an idea of the implications, scale of the projects, work required and the need for accelerating national and local supply chains, skills and training, standards setting, outcomes monitoring and public engagement.
• Consideration of this Phase should help local authorities work through how to bring various programmes, investment decisions and funding opportunities together under its Delivery Plan and to split interventions into near-term and longer-term actions – creating a portfolio of projects across different LHEES Considerations.
• This Phase links directly into the Phase that follows: Building on opportunities identified in the LHEES Strategy.

4.24. Phase 4 - Build on the opportunities from the LHEES Strategy: building on actions and commitments from Phase 3 above, and the LHEES Strategy (including the policy and strategy review), should help to set out how LHEES is to be used to create the foundation of actions and activity in the Delivery Plan.

• The policy and strategy review sets out wider local context and activity, as well as relevant funding, delivery programmes and regulation. Phase 3 actions (from above) set out how LHEES can support existing programmes of work across the local authority and develop a portfolio of projects. Delivery Areas provide more granular area identification to indicate where clusters of buildings are located within Strategic Zones, as well as providing a vehicle to set out focus areas for wider actions and engagement.
• Actions in the Delivery Plan should build on the LHEES Strategy and the above, to support programme delivery, funding applications, stakeholder engagement, and behavioural change.
• In practice, this may be using the LHEES Strategy and Delivery Areas to evidence and support opportunities and actions that: build on existing programmes of retrofit activity; set out potential low-regret heat decarbonisation projects; produce a portfolio of heat network projects (for example, both district and communal networks and recognising the different stages of development (concept, business case development, feasibility etc) and commercial structures); set out potential pilot or demonstration projects; initiate long-term engagement programmes etc.
• These actions may utilise existing funding and support channels (e.g. HEEPS:ABS, the Green Growth Accelerator and those related to heat networks). Local authorities may also find the LHEES evidence base helpful in targeting new business opportunities that would require actions to develop business cases, feasibility etc. and new work streams of activity (e.g. local authorities may use LHEES to target areas as part of local ECO flex schemes).

4.25. Phase 5 - Creating demand at scale: enabling action and interventions at a sufficient scale will help support both market growth and innovation, which can improve economies of scale and the cost-efficiency of heat decarbonisation interventions.

• LHEES Delivery Plans should begin with existing programmes of work, funding and support mechanisms and use the Strategy and Delivery Areas to ensure that these are strategically targeted and prioritised based on the improved evidence base, for example HEEPS:ABS, EESSH, pilot projects and capital spend.
• Local authorities should also seek to align policy and spend with business development cycles for the long-term policy consistency needed to create an investment climate. This should involve working across wider stakeholder partners and local authority boundaries where required and include consideration of supply chain and delivery structures.