Local Heat and Energy Efficiency Strategies (LHEES): phase 1 pilots - technical evaluation

1. Introduction

1.1. Background

The Scottish Government designated energy efficiency as a national infrastructure priority in June 2015, covering energy efficiency and heat decarbonisation of both domestic and non-domestic buildings. The subsequent publication of the 'Infrastructure Investment Plan 2015' gave a commitment to multi-year funding of Scotland's Energy Efficiency Programme (SEEP), which was substantiated in the 2016 Programme for Government (PfG), confirming Ministers' commitment to a minimum of £0.5 billion over the next four years, to support the initial phase of the programme. This programme has now been rebranded as Energy Efficient Scotland and has a dual focus, namely:

• Removing poor energy efficiency as a driver for fuel poverty
• Reducing greenhouse gas emissions through more efficient buildings and decarbonising our heat supply

In developing Energy Efficient Scotland, the Scottish Government is now considering the introduction of a statutory duty for local authorities to develop Local Heat & Energy Efficiency Strategies (LHEESs). LHEES would be the link between long term targets and national policies and the delivery of energy efficiency and heat decarbonisation on the ground. They would allow local authorities to prioritise and target work, whether that is supporting owner occupiers and Small and Medium Enterprises (SMEs) to installing energy efficiency measures or encouraging the development of district heating or other low carbon heat.

In advance of the introduction of any statutory duty for LHEES the Scottish Government is funding local authorities to pilot approaches and build capacity. In these pilot projects, local authorities have been asked to develop plans that are long term (20 years) including targets covering all buildings (domestic and non-domestic).

1.2. LHEES Stages

The Scottish Government has consulted twice on LHEES and the second consultation proposed the following six broad stages of development:

Stage 1: LHEES Preparation – assessment of existing local and national strategies and data availability

Stage 2: Local authority-wide assessment of existing building stock's energy performance and heat supply.

Stage 3: Local authority-wide setting of aggregate targets for heat demand reduction and decarbonisation of buildings – for the short-term strategy period and for the long-term duration of Energy Efficient Scotland.

Stage 4: Socio-economic assessment of zoned energy efficiency measures and potential heat decarbonisation solutions.

Stage 5: Selection of areas / prioritisation of opportunities for heat demand reduction and decarbonisation of buildings leading to the designation of zones within the LHEES for energy efficiency and heat decarbonisation.

Stage 6: Costing & phasing of delivery programmes that consider:

• Requirement to prioritise delivery programmes in time-limited phases
• Designation of area-based delivery programmes using zoning powers if needed
• Designation of demand-reduction based energy efficiency delivery programmes

1.3. External Consultancy Support Scope

The Scottish Government is funding local authorities to pilot the preparation of an LHEES to understand the processes of data gathering, objective setting, and the design and prioritisation of local delivery programmes. The pilot projects are providing evidence on appropriate methodology and approach as well the required resources and capacity.

Atkins (and sub-contractors including Changeworks, Carbon Trust and Resource Efficient Solutions LLP) have provided technical support to nine of the twelve local authorities successful in obtaining funding to pilot LHEES through the SEEP (Energy Efficient Scotland) Phase 2 Pathfinder Fund. Each of these local authorities, and the details of the LHEES pilot are summarised in the list below:

• Aberdeen – The Ward of Tillydrone, Seaton and Old Aberdeen. The area is mixed use including both social and private housing, primary and secondary schools, community buildings, health services and some small retail and commercial development. Part of the University is also included in this area.

• Clackmannanshire – Alloa & Tullibody. The pilot area includes a mix of social tenure, private rented and owner occupied domestic properties with high levels of social deprivation. The town of Alloa contains over half of the top 20 buildings with the highest heat demand in Clackmannanshire. Tullibody contains two major non-domestic heat loads in the form of GlenOchil Prison and Lornshill Academy.

• Dumfries and Galloway - The settlement of Glenluce and surrounding Data Zone contains 529 properties, 314 of which are in Glenluce itself. The area is off gas grid with the majority of properties heated using electric, oil or solid fuel heating systems. The area suffers from a high degree of fuel poverty.

• Highland – Inverness Central, Inverness Millburn and Culloden and Ardersier wards combined have approximately 34,122 residents across 15,403 households. There are a number of non-domestic buildings within the area including a hospital, university campus and 2 retail parks.

• Dundee – Lochee Local Community Planning Partnership Area is situated towards the west of the city and includes 11 distinct community areas as well as a District Centre, retail, leisure and industrial areas.

• Glasgow – LHEES pilot study covering the whole of the Glasgow City Council area, building upon existing strategic documents and datasets.

• Perth and Kinross – Located to the North and West of Perth City the pilot area includes areas within all but not the complete areas of the following Council Wards: Perth City Centre; Perth City North; and Strathlay. The pilot area has approximately 4,167 residents across 1,864 households and includes residential, commercial and public sector building stock.

• Shetland – The Island of Yell has a population of 966 and covers an area of 212.1 km². It has 506 houses, while commercial buildings consist of shops, shore bases and rural buildings.

• Stirling – Stirling Central (excluding City Centre area) and connecting part of Stirling North (Raploch). This covers the areas of Braehead and Broomridge (including Forthside), Torbrex, Raploch, which have community councils with a resident population of 6,835. There are a number of small shops and business units throughout the areas and some larger businesses.

A key feature of the pilot schemes is that, whilst they are all targeted at improving the energy efficiency and decarbonisation of heat, the focus, and indeed the nature of the technical support, was somewhat different for each local authority area. For Aberdeen, Dundee, Highland, Stirling and Perth and Kinross the pilot areas were similar – being urban areas with a mixture of residential properties and business premises but with none of these pilot areas being directly in the city centres. Whilst not a city, the Clackmannanshire pilot was similar in nature also. In contrast, the Shetland and Dumfries and Galloway pilots were in very rural areas without mains gas supplies. Glasgow was something of an outlier in terms of focus as rather than one or more small areas the pilot covered the full city, but the scope of work focussed on socio-economic analysis of already identified options rather than the first principle option identification carried out elsewhere.

Impacts of energy use for transportation and electrical supply were not included. Whilst this is consistent with the scope of LHEES, in practice it is not possible to develop a robust LHEES without due consideration of these adjoining sectors. In particular, electrification of heat and adoption of electric vehicles will both place additional requirements on the electrical network – particularly the 'last mile' elements of the distribution network. Going forward, it will be important that the potential impact on the grid is assessed as part of any LHEES development.

In addition to the pilots listed above, further pilots for Edinburgh, Renfrewshire and Borders were also funded as part of the phase 1 LHEES pilots. Whilst Atkins did not provide support to these pilots we have consulted with those councils and incorporated lessons learned and feedback from those pilots into this report. As a general point, this was very consistent with the findings from the work that Atkins supported.

1.4. Scope of document

The success of Energy Efficient Scotland and the implementation of LHEES will depend on the learning from past and present experiences of delivering heat and energy efficiency programmes. As such, evaluation of the pilots is taking place alongside the delivery with the aim of capturing lessons to inform the design of the overall programme. This work is being led by University of Edinburgh but it was also a requirement of the external consultancy support to provide a technical review and evaluation of the LHEES phase 1 pilots.

This document summarises that review and evaluation and includes:

• An evaluation of the availability and usability of existing data sets;
• An evaluation of tools and methodologies used;
• An evaluation of the methodologies suitable for the socio-economic assessment of the measures identified in LHEES;
• An evaluation of the replicability of methodological approaches for area-based assessments for zoning and socio-economic assessments;
• A review of the six broad stages of LHEES development (see section 1.2);
• An evaluation of the quality of the pilot LHEES;
• Recommendations for the future development of LHEES.

As noted above, the University of Edinburgh is leading the work to capture general lessons learned and therefore our commentary / review in this report is restricted to the technical elements of the LHEES delivery. Specifically, we have not made comment on issues such as resourcing or funding – instead, the Atkins view on these has been provided separately to University of Edinburgh for incorporation into the overall lessons capture.