New Build Heat Standard: scoping consultation

Chapter 2: The Standard

2.1 Introduction

This chapter explores the potential scope of this new Standard, and how the Scottish Government envisages this being achieved in practice.

2.2 What is a ‘new building’?

For context, it is proposed that any reference to a ‘new building’ is aligned to that set out under existing building regulations, and would cover both (a) any property built for the first time and (b) any property created by the conversion^[8] of an existing building.

2.3 Scope of this Standard

We propose that the focus of this Standard will be on the emissions generated within the curtilage of the building for delivering a building’s space and hot water heating and cooling requirements.

Therefore, in order to comply with this Standard, we propose that any installed heating system (both in terms of a building’s main and any other fixed heating system) would:

• Produce no direct greenhouse gas emissions at the point of use

The rationale for focusing our approach on regulating direct emissions that the building owner has control over (i.e. emissions from the heating systems contained within a new building) is to:

a) Ensure that responsibility for eliminating emissions is appropriately allocated to those with the ability to act. The proposed approach places a duty on the developer (or building owner/ tenant/ occupier) to take action where they have the agency and power to do so - with responsibility for decisions about decarbonising upstream emissions properly located elsewhere, and delivered through duties on other actors to deliver wider-energy system decarbonisation; and

b) Maximise alignment with the internationally-agreed emissions reporting schemes used for measuring progress towards Scotland’s statutory emissions reduction targets. Those targets are set at the level of the economy as a whole, but annually published Official Statistics also provide a sector by sector breakdown – which distinguishes between the direct emissions from sources located in buildings and upstream emissions associated with the wider energy supply system.

Any embodied energy (i.e. the emissions produced throughout the lifetime of a building, including from the materials used in its construction, maintenance and demolition) associated with new buildings will be out of scope for this Standard.

The construction sector, where possible, should aim to be more ambitious than the Standard when considering how to reduce the energy demand of new buildings.

2.4 Zero direct emissions vs Net zero emissions

It is important to differentiate between ‘zero direct emissions’ and ‘net zero emissions’.

‘Zero direct emissions from heating and cooling’ will ensure that no greenhouse gas emissions are produced at all from the heating or cooling system contained within a building at the point of use.

In contrast, the concept of net-zero greenhouse gas emissions allows for additional measures to be used to ‘offset’ any greenhouse gas emissions produced, or otherwise associated with energy use at the building. This Standard will not allow for offsetting.

2.5 Delivering the Standard

The Scottish Government believes developers should retain as much flexibility as possible in meeting this Standard, although we also expect developers to be mindful of the running costs of any heating system and the impact that these will have on the occupant to ensure they are able to afford to heat the building.

Decisions will be dependent on the characteristics of each individual site, as well as a location’s natural resource(s) and the nature of the energy networks serving the site.

It is envisaged that this will predominantly involve the installation of individual building/ dwelling-level zero-direct emissions technologies, as well as connecting new buildings to new or existing heat networks.

Indeed, many of these technologies are widely-available and are already being installed in new buildings by developers across Scotland:

Case Study: West Highland Housing Association (WHHA) - Imeraval, Port Ellen, Islay, Argyll & Bute

One of the biggest challenges in an island location like Imeraval is fuel poverty, and this is acknowledged by the Council in their Local Housing Strategy. West Highland Housing Association are currently on site at Imeraval, Port Ellen on Islay with 8 affordable homes comprising 6 for social rent and 2 for new supply shared equity.

All the units will have high efficiency air source heat pumps which are much more efficient than electric storage

heating which should help reduce tenants fuel bills. The Energy Savings Trust estimate that using an air source heat pump could reduce tenants energy costs by £695- £815 when comparing to a modern electric storage heating.

2.6 Compliance methodology

The purpose of this Scoping Consultation is to lay the groundwork and set a high-level vision for what the Scottish Government is looking to achieve in 2024.

Therefore, no definitive compliance methodology will be specified within this document. The Technical Consultation (to be launched in 2021) will contain proposals for a compliance methodology, taking into account input provided through this Scoping Consultation.

There are a number of potential options which the Scottish Government could use to define compliance with this Standard, such as:

a) Continuing with an existing methodology and – potentially – changing the emissions factors to reflect a ‘direct emissions’9 rating for different technologies.

b) Creating an easily understood and enforceable stipulation about the types of heating systems that would be permissible under the new Standard (i.e. those which, if used, would not generate greenhouse gases at point of use).

However, this list is not exhaustive, and we are seeking stakeholder views as part of this consultation process, including allowing for a review over time as new ways of ensuring zero direct emissions from heating become available.

2.7 ‘Zero-rating’ of emissions from certain heat sources

By limiting the Standard to direct point of use emissions only, any indirect or upstream greenhouse gas emissions that are produced during the generation or distribution of purchased thermal or electrical energy - which is delivered via a heat network or heat produced from grid electricity - would be considered out of scope.

We propose that electricity and thermal energy from heat networks would, therefore, be considered ‘zero-rated’ (i.e. considered to produce zero direct emissions at the point of heat consumption).

With regards to energy which is supplied to new buildings via grid electricity, our proposed approach is to consider this to be zero-rated emissions as:

a) Any emissions would occur upstream; and

b) These would be regarded as being the responsibility of electricity system actors - not the building owner/ user.

Furthermore, in each of the scenarios outlined within the National Grid’s Future Energy Scenarios (July 2020)10, power sector carbon emissions are forecast to fall in each scenario. In particular, within the ‘Leading the Way’ scenario, power sector carbon intensity is predicted to reach net negative emissions by 2030 - with the remaining two net zero scenarios envisaged to achieve this by the mid-2030s.

As new ways of ensuring zero direct emissions from heating become available, these could also be considered to be ‘zero-rated’ and reviewed over time. The Scottish Government welcomes evidence submitted to this consultation on other ways of ensuring zero direct emissions from heating. For example, a great deal of work is now underway to develop and test hydrogen for heating. There may be other ways to capture or prevent greenhouse gas emissions – however, the heat produced would need to release zero greenhouse gas emissions at point of use to comply with the Standard.

Our rationale for this is to ensure that any heating technology, for which there exists a regulatory requirement to decarbonise to zero in line with wider-climate change legislation, and which does not directly emit greenhouse gases at the point of use, would be considered to meet the requirements of this Standard.

2.8 Connections to heat networks

As noted earlier in this chapter, the Scottish Government proposes that developers should retain as much flexibility as possible to meet the Standard.

However, unlike other zero direct emissions heating systems that could be used to meet the Standard, and that are installed on an individual basis, heat networks require a critical mass of buildings to use the infrastructure in order for them to be viable.

Where heat networks are most viable, it has been found that they can offer fuel savings of up to 36%11. As such, there is an interdependence between the number of buildings using the heat networks, and the ability for heat networks to offer a cost-effective heat supply. That is why we propose that new buildings be required to be designed and constructed so as to connect to an existing heat network, where that development takes place within a Heat Network Zone^[12].

The expectation that ‘proposals should seek to connect to existing or planned networks’ has been in place in London^[13] for a number of years, and members of the Heat Networks Working Group^[14] have advised that this has been a key policy in accelerating the deployment of heat networks in the city^[15].

The London Model is implemented through planning policy. Currently, Scottish Planning Policy (SPP)^[16] sets out that Planning should support the development of heat networks and should help to reduce emissions and energy use in new buildings and from new infrastructure.

Work is underway to prepare National Planning Framework 4 (NPF4), which will incorporate SPP and will form part of the development plan for planning purposes.

The Scottish Government sought early views on NPF4 in January to April 2020, including on whether planning policies should say more about co-location and requirements for connections to heat networks. Further information on this Call for Ideas, including on the responses received, is available online^[17] and we have published an interim Position Statement in Autumn 2020 ahead of a draft NPF4 in Autumn 2021. However, at this stage, the Scottish Government is minded to believe that this Standard offers the most robust route as – unlike the Planning system in which Planning Authorities make their decisions having balanced all considerations – it is anticipated that this Standard would be underpinned by secondary legislation.

In circumstances where the location of a proposed new building is within a Heat Network Zone, to meet this Standard, we are proposing that the building would have to be designed and constructed to connect to an existing heat network, or otherwise demonstrate that it was not an effective solution – for the building owner or for the wider community¹⁸. An alternative zero direct emissions heating system would then be permissible in complying with the Standard.

2.9 Improving and optimising levels of fabric energy efficiency

Regardless of which system supplies a building’s heating requirements, it is important that action is taken to limit the amount of energy that needs to be delivered to a new building to meet the heating demand to the best levels practicable. This is seen as a parallel and complementary action to support the development of this Standard. This is most critical in our existing stock - also contributing towards removing poor energy efficiency as a driver of fuel poverty, making homes more affordable to heat.

Already, new homes and buildings are built with high standards of energy efficiency, but there is a need to take further action. For new builds, this will mean buildings will be required to achieve higher levels of building fabric performance from the outset.

The Committee on Climate Change (CCC) has made recommendations that new homes must achieve ‘ultra-high’ levels of energy efficiency. Whilst, there is no one agreed definition of what this would look like in practice, the CCC view is that this should ‘be consistent with a space heat demand of 15-20 kWh/m²/yr’^[19]. This figure is similar to the space heating demand of a Passivhaus building – which is ≤15 kWh/m²/yr^[20].

Advice from the Committee on Climate Change

Our approach attempts to be consistent with the advice and recommendations from the Committee on Climate Change (CCC), which has made clear (within the Reducing emissions in Scotland – 2019 Progress Report to Parliament) its expectations that, by 2025 at the latest, new homes should:

• Not be connected to the gas grid;
• Be heated through low carbon sources; and
• Have ultra-high levels of energy efficiency.

The CCC’s Letter: Future Homes Standard and proposals for tightening Part L in 2020²¹, to the UK Government also reiterated that:

• By 2025, or earlier, ultra-energy efficient homes (which are the equivalent to or close to Passivhaus standards), are achievable and desired.
• The continued use of fossil fuel (including any measures to offset this) in any future standard would not be credible.

The Scottish Government’s 2021 Building Regulations Energy Review will consider measures to improve targets to reduce heat demand, and associated carbon emissions, in new buildings.

This will inform discussions on this topic for 2024, where a further review of energy standards in building regulations will be carried out in parallel to the development of this Standard to be introduced for new buildings consented from 2024.

2.10 Additional considerations

2.10.1 Cooking

As it is proposed that this Standard would be limited to direct emissions from space and water heating and cooling only, it is envisaged that this would not cover emissions associated with cooking.

Scotland’s greenhouse gas emissions targets mean greenhouse gas emissions from cooking appliances must also be reduced. Whilst we propose that cooking emissions are out of scope for this Standard, we will keep this under review.

2.10.2 Process heating

It is proposed that this Standard would not cover process or industrial heating.

While these are direct emissions produced within a building’s curtilage, they do not specifically relate to a building’s space and water heating (and cooling) demand.

2.11 Summary of Standard

In order to comply with the Scottish Government’s New Build Heat Standard, it is proposed that, new homes and buildings consented from 2024 onwards in Scotland must:

√ Meet their space and hot water heating (and cooling) demand by producing no direct greenhouse gas emissions at point of use.

Additionally, we will further reduce the heat demand in new homes from 2024 through a review of existing provisions set under Scottish Building regulations.

2.12 Action by the UK Government

We recognise that the UK Government is in parallel consulting on its proposed Future Homes Standard for 2025, and the Scottish Government will continue to engage with the UK Government to ensure that any action that would be needed in reserved areas to complement our 2024 New Build Heat Standard is taken forward by the UK Government – as advised by the Committee on Climate Change in its Net Zero advice of May 2019, where it made clear that the UK Government would need to take action in reserved areas to support Scotland meeting its net zero target.

As made clear throughout this document, we propose that our New Build Heat Standard is introduced in 2024. However, the Scottish Government recognises that the CCC continue to stress the need for accelerated action to be taken.

Indeed, within the CCC's response to the UK Government's Future Homes Standard 2019 consultation^[22] - the CCC recommended that the UK Government follows Scotland's example and brings forward the date of the Future Homes Standard to earlier than 2025.

Therefore, as part of this Scoping Consultation process, we are seeking stakeholder views on the proposed implementation date for this Standard.

2.13 Questions

3. Do you agree with limiting this Standard to ‘new buildings’ as defined within section 2.2?

4. Do you agree with: (a) our approach taken to require future installed heating systems to be zero direct emissions only, and (b) our approach taken to focus on direct/ point of use emissions that a building owner has responsibility over only?

5. What evidence can you offer on ways of ensuring zero direct emissions from heating that could be compliant with this Standard?

6. What are your views on section 2.6, specifically regarding what mechanism the Scottish Government could use to ensure compliance with the Standard?

7. What steps can the Scottish Government take to support industry to deliver this Standard, and how could we make compliance with this Standard easier?

8. How do we ensure that consumers are protected from increased energy bills, while giving developers flexibility to comply with the Standard?

9. What are your views on new buildings connecting to an existing heat network, where development takes place within a heat network zone? Do you envisage any unintended consequences as a result of this proposal?

10. Do you agree with the Scottish Government’s proposal to introduce this Standard in 2024? What are your views on this Standard being brought into force for new buildings consented earlier than 2024?