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

5. Area prioritisation and zoning

5.1. Focus of LHEES

There are two aspects of area prioritisation / zoning in terms of an LHEES:

• Establishing district heating zones to enable coordination between building owners, heat network developers and public authorities around an agreed long-term plan for district heating development.
• Identifying priority areas for the implementation of energy efficiency measures.

However, since in the pilot projects we struggled to identify viable heat networks (as discussed in section 4.3.3) the concentration for the area prioritisation and zoning was on the energy efficiency improvements that could be implemented. The analysis looked at both the aims of heat decarbonisation and of alleviation of fuel poverty.

5.2. Methodology

In terms of area prioritisation, we based our analysis around Data Zones. This is the preferred standard spatial data area identified by the Scottish Government. Using this spatial data area enables policy agendas such as alleviation of fuel poverty to be used in work such as Multi Criteria Analysis. As such the Data Zone is the key small-area statistical geography in Scotland. The Data Zone geography covers the whole of Scotland and the Scottish Government and its partners undertake work to ensure that these nest within other public sector controlled spatial data boundaries, such as Intermediate Zone and local authority. Data Zones are built up from groups of 2011 Census Output Areas and have roughly standard populations of between 500 and 1,000 household residents. Where possible, they have been made to respect physical boundaries and natural communities. They have a regular shape and, as far as possible, contain households with similar social characteristics. This makes them particularly suitable to use for the purposes of identifying LHEES prioritisation areas.

To determine which Data Zones would be most appropriate to concentrate on those that link to the policy objectives of the Council and Scottish Government, In this study we considered the following data sources:

• Council Tax bands
• The Scottish Index of Multiple Deprivation (SIMD)
• The Changeworks Fuel Poverty map

Some local authority staff expressed a preference for either SIMD or the Changeworks fuel poverty map. The Scottish Government could take the opportunity for developing the current work around fuel poverty to review the spatial mapping of fuel poverty. In general, a Data Zone was considered to be 'prioritised' in terms of addressing fuel poverty if the majority of the following arguments held true:

• Fuel poverty rates are higher than the average in the local authority
• The income deprivation in the data zone is higher than the local authority average
• The council tax band A-C ratio is higher than the average for the local authority

We would note that the data zone driven approach does risk missing residents living in fuel poverty within generally affluent data zones.

Of course, the scope of an LHEES is wider than just fuel poverty so we also considered zoning prioritisation for the self-funded (commonly referred to as 'able to pay') sector. For this we utilised the following measures:

• High level of owner-occupied properties
• Demographics for the zone based on the 2011 OA Classification^[3]

The data gathered from the options appraisal stage (in terms of where the greatest opportunities for improvement lie) can then be overlaid with the zoning assessment to identify particular areas where a council might prioritise the implementation of measures.

5.3. Commentary

In terms of the area prioritisation exercise, this was fairly straightforward to achieve and there is reasonably robust data to allow this for short term measures.

In terms of driving the first stage of an LHEES, it is a useful exercise as it enables a focussed approach to be taken. For instance, a council might seek to utilise a grant based scheme to alleviate fuel poverty in one zone whilst pursuing a 'door-knocking' engagement scheme with owner-occupiers in another. The methodology employed can be considered suitable to enable councils to make informed decisions in terms of where the greatest initial impact can be made in terms of addressing fuel poverty. However, as noted above an area based approach will not necessarily identify those living in fuel poverty within otherwise affluent areas. Identification of these individuals would require analysis on an individual building level which would create difficulties with both data privacy and the level of work involved.

However, longer term measures will need improved data and inclusion of longer term energy constraints and prices to justify investments. Few investments were identified for the middle or latter stages of the 15-20 year proposed LHEES initial period. This area needs further work.

It is difficult to identify longer term solutions because there are two distinct (and not entirely mutually complimentary) routes that heat supply could go down in the future, one is a decarbonised electric grid (with everyone being supplied by heat pumps or equivalent), the other is a decarbonised gas grid. It's important to not create barriers to either one at this point because. Another factor playing into this is the extent of the uptake for electric vehicles is going to be, as this will add strain to the electric grid and could therefore inhibit the ability of the grid to support electrification of heat as well.

Currently the majority of measures identified for the short term are 'low regret', such as improved energy efficiency measures as these to not depend on how the heat is generated, the heat loss and therefore energy saving will be the same. District heating is also a low regrets option, due to the heating source being possible to change after time, and it does not depend on which route heat supply will go down as technically district heating is the supply/return pipes in the ground.

A key risk is that a lot of time and money is spent on transferring properties (both domestic and non-domestic) to electric heating with heat pumps, but then the gas grid is decarbonised which would either make that decarbonisation less effective or create a regret spend in terms of the investment in heat pumps.

A further constraint to long term planning is an understanding of what the longer term financial assistance programmes might look like and where funding might be available to local authorities. As it stands, relatively few heat decarbonisation options are economically viable without additional public sector support in some form and this creates an environment where long term planning becomes very dependent on perceived future government policy intentions. Hence, in the pilot studies, longer term measures tended to be restricted to identification of viable technical options that could be progressed should the policy / economic climate be favourable to that option in the future.