Low Carbon Infrastructure Transition Programme (LCITP): call for evidence

Chapter 2 LCITP Background

2.1 Since 2015, the LCITP has played an important role in providing support to large scale low carbon energy demonstrator projects. The LCITP has made expertise and financial support available for project development and capital investment in order to help projects secure investment in innovative low carbon infrastructure projects with potential for replication while helping Scotland to meet its climate change targets. The LCITP focuses on large scale multiple building projects that demonstrate partnership delivery, new business models and use individual technologies or integrated systems that are proven but have not yet reached commercial viability (see Technology Readiness Levels 7-9 shown in table below) and therefore face challenges in securing investment.

2.2 The LCITP was developed to fill gaps in support for large scale projects to assist development of investment grade business cases and to share risk for innovative capital demonstrators using new technologies and business models in order to increase investor confidence and provide exemplars to encourage wider replication.

2.3 The LCITP has been funded by the Scottish Government, with some co-funding provided by the European Regional Development Fund (ERDF). The cessation of ERDF funding alongside emergence of new policy drivers on the scale and pace needed, in particular for heat decarbonisation, to meet our net zero targets requires consideration of the scope of a successor for the LCITP.

2.4 The LCITP provides three broad stages of project support for private, public, third sector and community lead projects:

• Catalyst Support can be applied for at any time and focuses on initial strategy development work and feasibility studies;
• Development Support can be applied for at any time and focuses on support for business cases, investment options and investment propositions. This stage has contributed towards completion of Investment Grade Business Cases through provision of specialist technical, legal, financial and project management support;
• Demonstrator Support can only be applied for in response to open calls for funding. Fair and open funding invitations are designed and launched periodically to support a specific policy aim and typically offer up to 50% of a project's capital costs.

2.5 Feedback received to date from supported projects has suggested that the programme has been instrumental in unlocking projects that may not have been developed without the comprehensive support and funding package provided. It has been identified that the LCITP has been key to:

• Bringing credibility and increasing investments in projects;
• Unlocking the potential for projects to gain national and international recognition;
• Increasing the ambition and impacts of projects;
• Helping to align infrastructure projects across Scotland with Scottish Government's policy and outcomes; and
• Motivating project teams to continue in the face of adversity.

2.6 It is intended that the replacement programme will be operational from September 2021 and will run for the next five years to support the deployment of large scale low and zero carbon heat projects using established technologies, as well as continuing to facilitate demonstration of innovative low and zero heat technologies.

Questions

1. Please provide views on the impact of the LCITP support to date, in particular on the three stages of support provided? Please explain your views.

2. How should the LCITP successor programme best reflect enhanced policy ambitions set out in the 2020 Climate Change Plan Update and the draft Heat in Buildings Strategy? Please explain your views.

Low Carbon Infrastructure Transition Programme Case Study 1

Queens Quay, Clydebank

Led by West Dunbartonshire Council, the Queen Quay District Heat Project is the largest Water Source Heat Pump heat network in Scotland. Queens Quay is located at the former John Brown shipyard and is key to the regeneration initiative that is being supported by West Dunbartonshire Council. The network has been designed to accommodate future expansion to increase the number of buildings receiving heat from this exemplar heat network.

This project will utilise water source heat pumps manufactured in Glasgow using the River Clyde as an energy source. The heat network uses heavily insulated pipework to deliver heat to the new developments at Queens Quay and a number of pre-existing buildings. The project has received £6.1 million in funding from LCITP with match funding being provided by West Dunbartonshire Council.