Non-domestic buildings - heating systems: research report

1. Background

a. Policy context

A major challenge that must be addressed in order to meet Scotland’s target of net zero greenhouse gas emissions by 2045 is the decarbonisation of heat in buildings. Until its closure in 2021, the main incentive for heat decarbonisation across the UK was the Renewable Heat Incentive (RHI), which provided payments for renewable heat generation in buildings. In Scotland, renewable heat has also been incentivised by the Zero Waste Scotland (ZWS) SME Loan Scheme, with further initiatives available for domestic properties.

As set out in the Scottish Government’s Heat in Building Strategy[1], the incoming New Build Heat Standard (NBHS) will mandate the use of Zero Direct Emissions Heat (ZDEH) technologies in all new buildings applying for a building warrant from 2024. The policy definition of ZDEH is understood to include any technology which provides heat (or cooling) with zero direct emissions (within the curtilage of the building) under normal operation. Technologies included in this scope are direct electric systems, heat pumps, heat network connections, and potentially hydrogen. Biomass combustion is not classed as ZDEH, but it is an established source of renewable heat in Scotland. Due to concerns around the air quality impacts of biomass combustion and priorities over the use of our biomass resource, the Scottish Government is currently deciding under what circumstances, if any, biomass combustion will be allowable under NBHS and other regulations.

In the Strategy the Scottish Government has also committed to regulations to decarbonise heat in existing non-domestic buildings from 2025. Aside from new builds (and domestic buildings, which are not within the scope of this research), the approximately 220,000 existing non-domestic buildings in Scotland must be decarbonised. Although a complete dataset of this stock is not currently available, the Scottish Government estimates that approximately half of these buildings are already heated by traditional direct electric (which until recently has not been considered as a ZDEH technology) or to a lesser extent other ZDEH technologies. The majority of these buildings use electrical heating, either in the form of direct electric, reversible air conditioning or Variable Refrigerant Flow (VRF) systems. Only a very small proportion currently use heat pumps and heat network heating systems that potentially offer the lowest operational cost for ZDEH systems. Therefore, it is anticipated that insight can be obtained from early-movers of new ZDEH systems as to how the rest of Scotland’s buildings can successfully implement ZDEH by the Government’s 2045 target.

b. Research aims

Locogen were appointed by the Scottish Government to undertake a research project investigating best-practise installations of ZDEH systems in non-domestic buildings to inform the regulatory approach for the non-domestic buildings. The three goals of the research are:

• To produce at least 14 case studies for new-build, non-domestic buildings with best-practice ZDEH technology installations.
• To produce at least 6 case studies for existing non-domestic buildings with best practice ZDEH technology installations.
• To identify any barriers to installation (including reasons why ZDEH are not being installed in certain classes of new builds, if found to be true),
• To understand the impact that switching to ZDEH technologies will have on the operation of existing non-domestic buildings.

This report provides a summary of the findings from the case studies, namely the barriers and drivers to installation and the impact of retrofitting ZDEH technologies.