Heat and energy efficiency strategies: second consultation analysis

Local Heat and Energy Efficiency Strategies

Local Heat and Energy Efficiency Strategies

68. The consultation document explained the Scottish Government considers that it would be appropriate to place a statutory duty upon local authorities to work with relevant stakeholders to produce a Local Heat & Energy Efficiency Strategy (LHEES), aimed at improving the energy efficiency and decarbonising the heat supply of their area under SEEP. They would also have a duty to report on progress.

69. Prior to commencement of a duty, local authorities would be offered capacity and support to develop LHEES.

70. The consultation also explained that strategies would cover a 15-20 year period and that development of a LHEES will include the following stages:

• Stage 1: An assessment of existing local and national strategies and data availability.
• Stage 2: Authority-wide assessment of existing building stock’s energy performance and heat supply.
• Stage 3: 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 SEEP.
• Stage 4: Conduct a socio-economic assessment of potential energy efficiency and heat decarbonisation solutions.
• Stage 5: Selection of areas/prioritisation of opportunities for energy efficiency and/or heat decarbonisation, leading to the designation of zones.
• Stage 6: Costing & phasing of delivery programmes that consider:
  • Requirement to prioritise delivery programmes in time-limited phases.
  • Designation of area-based energy efficiency and heat decarbonisation delivery programmes using zoning powers if needed.
  • Designation of other energy efficiency and heat decarbonisation.

71. Respondents were asked:

Q1 Do you agree with our proposed overall approach to LHEES?

72. As shown in the following table, most of those who answered this question agreed with the proposed approach (45). Eleven disagreed, while seven did not specify their agreement or disagreement but made other comments.

Question 1

	Yes	No	Other comment	No reply
Business & Industry (16)	10	5	-	1
Network, Professional or Trade body (14)	9	1	3	1
Local government (20)	17	1	2	-
Third sector & Community (9)	7	1	-	1
Public sector (5)	3	-	1	1
Academic (3)	1	1	1	-
Other organisation (1)	-	1	-	-
Total organisations (68)	47	10	7	4
Individuals (3)	2	1	-	-
Total (71)	49	11	7	4

73. Sixty-six respondents provided additional comments in support of their view. These views are summarised in the following paragraphs.

74. The 45 respondents who agreed that local authorities should have a duty to produce and implement a Local Heat & Energy Efficiency Strategy (LHEES) all provided supporting comments. In addition, three of those who did not select a tick box answer but did supply comments said that they agreed in principle with some or all of the proposed approach.

75. Several of those who agreed simply made general positive comments welcoming the proposed approach while others gave very detailed and individual comments.

76. One of the key themes to emerge, in around a quarter of responses, mainly from the local government group but also from some others, related to the need for support for local authorities in terms of finances, capacity building, experience and expertise.

77. Respondents wanted to see more information or greater clarity as to what would be available to local authorities (LAs), including the level of support, when funding would start and how long this would last.

78. A small number felt that the Scottish Government (SG) should provide or arrange the training that will be needed, for example one respondent from the local government group suggested:

“There are a range of new and additional skills that are required for the execution of the LHEES and it should be considered that the SG develop and arrange for training to all practitioners in the LAs to provide the skills and knowledge required.”

79. Many of these respondents, along with some others, stressed the need for local authorities to work together to share resources and skills or welcomed “the proposal to allow local authorities to discharge jointly their duty to produce an LHEES, as a means to share knowledge and expertise across different geographic areas”. (3rd sector & community)

80. There were one or two requests for clarification over what powers of enforcement LAs would have.

81. While a small number felt that there should be a standard approach to LHEES to ensure consistency, others commented on the need for local flexibility.

82. In addition to working with other local authorities, a small number commented on the need to involve others such as CPPs and, in particular, the private sector. There were also a small number of calls for clarity as to the role of the private sector in both LHEES and SEEP.

83. Consumers were also mentioned, with a small number of respondents commenting that buy-in from consumers would be vital to the success of LHEES and a suggestion that plans would need to consider any impact on consumers.

84. Another theme related to the need for central development of a range of tools and support, for example data management, spatial modelling, costing, profiling and projecting demand, engagement and other LHEES requirements. Central, rather than development by each local authority, was favoured as it would mean cost savings. There was also a suggestion that the SG could provide guidance on the preparation of a socio-economic model and a request for usable cost models to compare against LHEES proposals.

85. Several respondents commented on the staged approach, with most of these respondents welcoming the idea. Most commented on the 15-20 year period with many stressing the need for regular reviews or interim or milestone targets.

86. A small number asked for clarification as to what happens after the 15-20 year period as: “Many of the investments required to realise the strategy will have an investment life cycle longer than the life of the strategy” (business & industry). There was a suggestion that the period be extended to 25-30 years.

87. Several stressed the need for LHEES targets to be aligned with national targets while others commented on the need to be able to align LHEES targets with local targets, plans and priorities.

88. One respondent, from the academic group, suggested that “LHEES should broadly have a three-part structure:
1. Long-range vision of energy efficiency and heat supply for each local authority area. I.e. articulation of what the strategy aims to achieve over the long-run (at least 20 years) and where.
2. Transition plan, setting out what needs to happen and (broadly) when in order to fulfil the long-range vision.
3. Delivery priorities, setting out the near term actions that can be taken in each area to take steps along the transition”.

89. Other comments on targets or priorities included:

• The need for targets for the proportion of heat to be delivered from low-carbon sources.
• The need for targets for reducing energy demand and decarbonising heat.
• The need to ensure all buildings comply with Building Standards as this contributes to tackling fuel poverty.
• The need to emphasise cutting fuel poverty, providing affordable warmth and increasing energy efficiency.
• “That district heating will not be the most appropriate route to energy efficiency or decarbonising heat supplies, particularly in areas where housing is predominantly low and medium density”. (local government).
• The need for area-specific targets.

90. Some other comments on the stages, each from one or two respondents, included:

• Stage 2: the need for more information on the assessment of existing building stock’s energy performance.
• That stages 3, 4 and 5 will impact each other and so should be undertaken at the same time.
• The need for clarification as to what ‘short-term strategy period’ refers to in stage 3.
• That stage 5 would be more appropriate for target setting; as these could be set after the socio-economic assessment.
• That a stage 7 should be added relating to the method and frequency of monitoring and reporting on LHEES; several respondents asked for clarification or detail on reporting, monitoring and measurement.

91. Data collection was a smaller theme mentioned by respondents, with some concern that voluntary data collection may not provide the robust data required and that this may need to be statutory.

92. Other, smaller, themes included:

• The need to ensure that plans include decarbonisation of transport, electricity, energy generation and energy storage; that electricity and transport systems must be included or considered.
• The need to involve Distribution Network Operators early in respect of electricity and heat decarbonisation.

93. The 11 respondents who disagreed that local authorities should have a duty to produce and implement a Local Heat & Energy Efficiency Strategy (LHEES) did so for a variety of reasons. The main concern related to a lack of resources available within local authorities to deliver LHEES.

94. Others included:

• That new developments should be excluded as these already focus on improving energy-efficiency and reducing carbon emissions.
• The need to place a duty on other public sector organisations such as SEPA.
• That the proposals have been made without undertaking resource impact assessments and gap analyses.
• Concerns over flaws in SEEP (particularly relating to fuel poverty) and therefore linking LHEES with SEEP.
• That tackling fuel poverty should be the priority.
• That the focus should be on reducing energy demand.
• That the 15-20 year time frame is too short.
• The need for a national strategy to decarbonise heat.

95. Comments from the seven respondents who replied without giving a yes/no answer (although three said they agree ‘in principle’) again included concerns over the resources available to local authorities, as well as concern over funding as a whole.

96. Other comments included:

• The need for a clearer evidence base (for example on low carbon heating supply technologies or the cost and benefits of local energy systems) before any plans and strategies are developed.
• The need to prioritise energy efficiency and demand reduction measures.
• The need for guidance as to how LHEES “will be developed and implemented at a local level given that the majority of the existing policy framework within local authorities do not extend beyond 3-5 year cycles” (local government).
• Concern over the ability to collect relevant data.
• Concern over how to achieve buy-in from developers and others in the private sector, and home owners.
• The need to consider the historic environment.

Statutory Duty to Report on Tackling Fuel Poverty and Climate Change

97. The consultation paper stated that there is a statutory duty for local authorities to report on tackling fuel poverty and climate change. The duty to report is postulated to align closely with local authorities’ plans for improving the energy efficiency of buildings and decarbonising the heat supply, and therefore it is proposed that this duty should be moved from the Local Housing Strategy (LHS) to the LHEES.

98. Question 2 asked:

Q2 What are your views on asking local authorities to report on tackling fuel poverty and climate change in the LHEES rather than the LHS?

99. Fifty-three respondents provided comments in response to this question, and a significant minority were broadly supportive of reporting about climate change and, to a lesser extent, fuel poverty, in the LHEES rather than the LHS.

100. Several of these respondents simply stated that the LHEES seemed the logical or sensible place for these reports given LHEES’s remit as stated in the consultation. Other reasons cited by respondents included:

• Aligning the duty to report with the strategy that is focused on delivering the energy efficiency, fuel poverty and decarbonisation objectives.
• The strong links between energy efficiency, carbon reductions and fuel poverty.
• The likelihood of giving fuel poverty a greater focus and a more joined up approach to tackling the issue.
• Ensuring that local authorities consider emissions from all the buildings in their areas.
• The LHEES would provide a central point to collate and monitor on elements that go beyond the scope of the LHS.

101. A small number of respondents favoured retaining reporting in the LHS. Smaller numbers were unsure and very small numbers thought reporting should not be done through either channel or should be carried out as a standalone document instead. Alternative suggestions for reporting structures were made as follows:

• Via local authorities directly.
• Leaving Councils and community planning partners to work out where they set out and report on their climate change and fuel poverty strategies.
• Through the Fuel Poverty Advisory panel.

102. A few respondents, particularly those in local government, were adamant that at least some elements of fuel poverty reporting needed to be in the LHS, though most of these were happy for climate change to be reported within the LHEES. Reasons for this mainly centred around the lack of correlation between climate change and fuel poverty, or between energy efficiency and fuel poverty. As one local government respondent put it:

“Fuel poverty … is not the consequence of a lack of investment on energy efficiency improvements. The main reason for fuel poverty increasing.. is low income levels and the year on year increases to fuel prices.”

103. However, very small numbers of respondents thought the opposite: climate change reporting should be retained in the LHS, and fuel poverty reporting moved within the LHEES.

104. A significant number of respondents commented on the need
for reporting to be tied in or have a joined-up approach with other mandates or plans in order to be effective. For instance, according to
an academic respondent:

“There are a range of developments across Scottish heat policy with which LHEES should be coordinated. These include minimum energy performance standards for existing buildings (currently being developed for the private rented sector) and the new fuel poverty strategy.”

105. Examples of other mandates, plans and bodies which needed to be taken account of, informed or coordinated with when reporting on fuel poverty and climate change were given as follows:

• The National Fuel Poverty Strategy.
• Local Outcome Improvement Plans (LOIPs).
• Warm Homes Bill.
• Climate Change Public Bodies Duties Reporting (several respondents).
• The Scottish Government and its duties around monitoring, evaluation and reporting of fuel poverty.

106. Particularly among local government and business & industry, concerns were raised about the lack of resources available, or the extra resources, funding and support needed, in order to carry out the LHEES reporting requirements. Very small numbers of respondents were also concerned about the additional reporting responsibilities imposed upon local authority planning and building control departments.

District Heating Zones

107. Within the consultation document, the Scottish Government proposed that LHEES would designate zones for energy efficiency and heat decarbonisation. These zones would help to phase the operation of area-based SEEP delivery programmes for energy efficiency. The zones would also set out the most appropriate heat decarbonisation options for specific areas.

108. The Scottish Government are proposing that zones would be indicative. This would not prevent other forms of heating from being used in those zones through legislative means, but would instead help local authorities to communicate their strategic approach to energy efficiency and heat decarbonisation through SEEP. In particular, zoning will signal to investors both where energy efficiency delivery programmes under SEEP will take place, and the most appropriate areas for future development of district heating, and if appropriate, communal heating. Question 3 asked:

Q3 Do you agree with our proposed overall approach to zoning?

109. As shown in the following table, there was majority support, across all sub-groups, for the proposed approach to zoning. Smaller numbers (around one in six) respondents disagreed with the approach, with around one in four not answering this part of the question.

Question 3

	Yes	No	Other comment	No reply
Business & Industry (16)	8	3	-	5
Network, Professional or Trade body (14)	3	3	-	8
Local government (20)	15	3	-	2
Third sector & Community (9)	6	1	-	2
Public sector (5)	3	-	-	2
Academic (3)	2	1	-	-
Other organisation (1)	1	-	-	-
Total organisations (68)	38	11	-	19
Individuals (3)	2	1	-	-
Total (71)	40	12	-	19

110. Fifty-eight respondents provided additional commentary in support of this question. Within the broad support for the zoning approach, however, there was little consensus; a wide variety of discussion points were raised by respondents. Small numbers of respondents stated general favourable impacts of zoning such as their help in focusing resources, and their usefulness for identifying priority areas. A few respondents were positive about zoning being indicative rather than mandatory (though a very small number queried whether indicative-only zones would have value in terms of getting energy efficient schemes running), while a few others supported the non-geographical approach to zoning.

111. A significant minority of respondents chose to focus on what they thought was needed to help the push for adoption of programmes for energy efficiency. In particular, some respondees pinpointed commercial attractiveness and conditions for investment as being crucial to getting take up and funding for energy efficient schemes, with most of these respondents expressing doubt about whether the zones will provide sufficient certainty to enable providers to commit to investment. Other small numbers of respondents saw community engagement (in particular householders and owners of property) as being essential to support take up of the schemes. Similar numbers saw affordability and price (e.g. cheaper existing gas connections) as being a stumbling block to community take up.

112. Significant numbers of respondents pointed out that in order for zoning to work effectively, collaborative working between a variety of stakeholders would be essential to avoid conflicts, often at a regional or national level. Examples of necessary joint working and potential conflicts were given including:

• Formal cooperation between local authorities during the zoning process (or where a zone crosses local authority boundaries).
• Investment decisions in upgrading buildings not being aligned with planning of district heating.
• Clarity required as to how the zoning process for LHEES’s would be reflected in Local Development Plans (LDPs) / how LDPs should be aligned with LHEES’s.
• The current review of the planning system provides an opportunity to ensure as much linkage as possible between the LHEES and planning processes.
• Local authorities need to be supported in the overall approach to zoning at a national level in engaging with potential operators of zone consents.

113. A few respondents saw a need for more or improved data and analysis requirements as necessary in order to make zoning effective. Types of accurate data mentioned included demography, geography, ground conditions, fuel poverty levels, socio-economic analyses, and analysis to identify key heat anchor loads (to connect onto the network). Smaller numbers of respondents detailed technical issues related to heat networks and heat mapping.

114. A minority of respondents made specific comments about district heating. These included more needing to be done to make funding of district heating affordable, the lack of enforcement in place to persuade building owners to connect to it, and economies of scale being necessary to ensure carbon savings from the network technology. Mentions were also made of the possibility of the revised National Planning Framework (NPF) having an important role in identifying where large-scale district heating might be deliverable, and an opportunity to establish pipeline corridors where there is the potential for connection to low or zero carbon energy sources that exist outside urban areas (in addition to establishing zones in urban high load density areas).

115. A few respondents were of the opinion that there should be a requirement to consider a variety of low carbon technology options regarding heating and efficiency measures as part of the zoning process, as opposed to prioritising the development of local heat solutions and heat networks. A small number of respondents also suggested identifying zones in such a way as to prohibit use of conventional fossil fuelled heating systems.

116. Small numbers of respondents made points about rural and semi-rural energy efficiency conditions being very different to those for urban areas. Most of these respondents opined that rural and remote areas may be at a disadvantage for zoning and therefore funding and investment relative to urban areas, as they are unlikely to be viable for heat network development.

117. Other points, each raised by small numbers of respondents, included the following:

• Concerns about the exclusion of other opportunities caused by zoning, or alternatively the need for exempted areas from the zoning policy (e.g. new developments, developments with low energy demands, developments which already provide heat via decentralised low carbon means).
• Possible clashes in terms of the choices between district heating and low carbon solutions, or low carbon vs energy efficiency generally.
• The need to learn from other countries’ experiences (Denmark, Netherlands, England), with the proviso that replication may be difficult due to local factors (e.g. higher rates of public ownership in Denmark than in Scotland).
• The requirement to retrofit older buildings to a high standard to accommodate heating and energy efficiency improvements.
• The possibility of using publicly owned buildings (e.g. local government buildings) as an initial ‘hook’ for developing district heating schemes.

District Heating Consenting

118. The consultation paper noted that the Scottish Government wants to support local authorities to ensure district heating develops in a strategic manner in their area through the proposal for statutory LHEES. The SG also proposes to introduce a new district heating consent system, which would be managed and enforced by the local authority; this system would be subject to a similar consenting regime as that for other energy utilities although it would have different requirements and thresholds.

119. The Scottish Ministers would develop national guidance for applicants seeking district heating consent and for local authorities who would be responsible for assessing applications and issuing consents. In a situation where district heating consent has been awarded, but the district heating developer is not able to complete construction of the development as specified in the conditions of consent, the SG is seeking views on the appropriateness of any potential options for a relevant body to act as the ‘developer of last resort’ to ensure completion of development.

120. Question 4a asked:

Q4a What are your views on the proposed district heating consent process? In particular, what are your views on the appropriateness of any potential options for a relevant body to act as ‘the developer of last resort’ to ensure completion of development?

121. Overall, 52 respondents opted to provide commentary in response to this question.

122. A majority of respondents noted their approval of the proposed district heating consent process or specific elements of what was being proposed. Local authorities in particular were supportive of the development of national guidance and support and noted that this would offer consistency across Scotland. There was no outright disagreement with the proposed district heating consent process or specific elements of what was being proposed, although some respondents noted caveats or concerns that would need to be addressed. These included the resources needed to implement the proposed district heating consent process.

123. In terms of who the developer of last resort (DoLR) should be, the preference from a majority of respondents who commented at this question, was for a national body to be the DoLR. A number of local authorities felt that they should not take on the role of DoLR; furthermore, a number of respondents noted that local authorities do not have the resources to be able to take on this role. There were also a small number of cautionary comments including the need for the DoLR to be adequately resourced, that there may be procurement issues and the need to protect the investment that industrial suppliers of heat may have made.

124. Suggestions as to which organisations could adopt this role included:

• A Scottish Energy Company.
• A publicly owned national provider.
• An independent body appointed by Scottish Ministers.
• The Scottish Government.
• A similar model to that adopted by Warmer Homes Scotland.
• An existing regulatory body.
• A not-for-profit local energy company.

125. A significant minority of respondents noted that local authorities do not have the necessary resources to be able to manage the consents process (noted primarily by those in the business & industry and trade body sectors). Allied to this point, a number of local authorities noted that they need support through the development of national guidance and support or that they need robust systems, staffing levels and the skills to oversee the consents process. There were some suggestions that a central body could issue and manage consents or that there is a need to pool experience and expertise on a national basis and target effectively support where it is needed by local authorities.

126. There were also some suggestions that the consent process should be subject to the normal planning consent process although there were a small number of comments that this should be separate from the planning process.

127. A small number of respondents, mostly from within local government, suggested a requirement for a development bond as part of the consenting process; or having a bond at the consenting stage to address the financial implications of another party completing the development, so the default position does not fall to the taxpayer.

128. There were also a small number of calls for a robust system for monitoring schemes and reference to the need for accountability and transparency from district heating operators.

129. Other comments made by very small numbers of respondents included:

• The need to consider the most suitable heating option and the potential to offer a range of approaches for delivery of low carbon options in conjunction with energy efficiency measures.
• The need to introduce performance standards through license conditions to help ensure there are clear and consistent rules within the sector.
• Developers should not be allowed to cherry-pick the most commercially advantageous developments; this could inhibit progress towards a reduction in fuel poverty.
• There needs to be sufficient evidence available to a network operator within a predefined zone to encourage investment in delivery of the network and the assets that will be owned, operated and maintained by them. Additionally, that any intervention stemming from the development of a LHEES is justified and supported by robust evidence (cited by those within business & industry and network, professional and trade body).
• A need to refer to research that has been or is currently being undertaken; for example, by the Heat Delivery Network Unit.

130. A small number of respondents requested clarity or further detail on some aspects of what was being proposed. This included:

• The requirements that would be set out by Scottish Ministers, for example, on timescales or what evidence would be required on customer engagement in instances where there are no direct customers.
• The circumstances and conditions in which a DoLR would be appointed.
• Information on how customer engagement could be demonstrated and how this would link with the socio-economic assessment process.
• How district heating consents would require progress towards renewable and climate change targets.

Question 4b then went on to ask:

Q4b What are your views on the proposed district heating consent process? In particular, what are your views on options for ensuring that district heating operators have similar or the same rights as other statutory undertakers for permitted development and wayleaves?

131. Forty-six respondents provided comments in relation to this.

132. Most of these respondents noted their agreement with the proposals laid out in the consultation paper. Once again, there were some references to the need for local authorities to have sufficient expertise and resourcing to be able to undertake this role. Once again, there were a small number of requests for further detail such as what compensation would be available for the use of land and for other wider issues in relation to property rights.

133. A small number of respondents in the business & industry sector and network, professional and trade bodies commented that heat networks should be treated in a similar manner to other utilities and benefit from reduced business rates and other taxation breaks.

134. A very small number of respondents in local government and the 3^rd sector / community commented on the need for a strategy-driven approach rather than a speculative approach, with the organisation in the third sector / community feeling that a speculative approach has not served the onshore wind industry well.

Socio-Economic Assessment

135. The consultation paper set out a proposal for socio-economic assessment to be a statutory requirement at three levels: of LHEES (strategy level), of district heating developments (project level) and for use during mediation for connecting individual buildings (building level). The Scottish Government would provide statutory guidance for socio-economic assessment in the form of a detailed methodology, laying out the overarching process and standard assumptions.

Q5 What are your views on the proposals for socio-economic assessment?

136. Overall, there was broad agreement from a majority of respondents, across all respondent sub-groups, for socio-economic assessment to be included as part of LHEES, with some of these respondents noting that this would help to bring about health benefits such as improved air quality or reduced emissions as well as social benefits such as targeted action to reduce fuel poverty.

137. There were also a small number of references to the need for a whole systems approach that aligns with the Scottish Government’s overall objective of reducing fuel poverty as well as aligning with other policy areas including climate change. There were also a small number of references to the need for LHEES to align with Scotland’s Energy Efficiency Programme (SEEP). As noted by a network, professional or trade body;

“Socio-economic assessments should be robust. As such we suggest that factors such as social benefits, emissions reduction, health benefits, air quality improvements and other externalities that may not already be factored into some assessments are considered when developing the methodology. A whole system approach is needed to help ensure any investments made will not be subsequently detrimental to other policy areas or to achieving targets.”

138. That said, a small number of respondents in the business & industry sector and within network, professional and trade organisations noted that consideration should also be given to market demand and the commercial viability of each proposal so as not impact negatively on local development plans. These respondents also suggested the Scottish Government should conduct an additional assessment prior to the ones already identified in order to scope and identify suitable areas of consideration for LHEES and exemptions to the policy, prior to placing a duty on a local authority.

139. A significant minority of respondents, across all respondent sub-groups, welcomed the commitment to provide statutory guidance for socio-economic assessment in the form of a detailed methodology, laying out an overarching process and providing standard assumptions. Key benefits to this were that it would ensure consistency within and between local authority regions and that it would allow for consistent application across all stakeholders. A few of these respondents also noted that local authority staff will need training and support to ensure they have adequate capacity because of the additional requirements placed upon local authorities to assess the assessments as part of the zoning and consent process. There was also reference from a small number of respondents to take note of the current pilots that are underway.

140. There were a few comments from respondents in the 3^rd sector / community, local government and business & industry on the actual process of socio-economic assessment, with respondents noting that the process needs to be accessible, consistent, comprehensible and transparent, and that is should not be too onerous or time consuming. For example, one local authority noted;

“From a local authority perspective it is hoped this process will be simple and not too data heavy to allow it to be readily applied and interpreted. The pilot LHEES studies taking place across Scotland will be looking at the suitability of existing socioeconomic processes and the learning from these pilots should inform the final decision on the most appropriate method to use.”

141. A small number of respondents noted the need for update and review to take place, with suggestions that the effectiveness of socio-economic assessment should be tested every 2-5 years. This would also help to ensure that best practice is developed as skills develop.

142. There were calls from a few respondents for more detail or clarification of specific issues. These included the scope of social elements of the proposed assessment and how a common basis for measurement of these can be applied across all projects, what opportunities there will be for local communities to be involved in the process of a strategy level socio-economic assessment or in contributing to decision making about zoning and consents for district heating systems, or how this would operate as part of a competitive tendering process.

143. Other issues raised by very small numbers of respondents included:

• A need for a duty on public buildings to connect to a heat network if the socio-economic assessment is positive at a local authority and project level.
• A need to consider the cost of utilities from main suppliers.
• A need for long term costs and benefits to be embedded in a whole systems perspective to account for interactions with changing electrical systems and competing demand for energy resources.
• A need to ensure that fuel and technologies used in heat networks are low carbon.
• Determination of need should also be based on energy performance of buildings.
• There is still a need to bring about reductions in energy and heat demand.
• It could be challenging to access relevant and accurate data, that some data may be subject to commercial confidentiality or that there will need to be co-operation across the sectors in sharing data.

Data for Local Heat & Energy Efficiency Strategies

144. The consultation paper noted in terms of heat demand, that local authorities already have access to some data on energy use and factors that influence heat demand through existing sources such as Scotland’s Heat Map and the Energy Performance Certificate (EPC) register. The consultation proposed that where possible, these data sources should be supplemented with data on gas and electricity consumption, with improved accuracy so that local authorities can develop LHEES. There was recognition that this data would have to be subject to strict data sharing agreements.

145. In relation to surplus heat, the consultation paper laid out a proposal to continue to encourage industry with surplus heat to provide data about potential off-site heat provision on a voluntary basis to local authorities for the development of LHEES. The paper asked for suggestions as to how data on surplus industrial heat could be made available to develop LHEES or as a detailed district heating project. There was recognition that one of the major barriers to industry providing data is its commercial sensitivity and the SG was keen to better understand how these could be overcome.

146. Question 6 asked:

Q6 What are your views on the proposals for data for LHEES?

147. Overall, 54 respondents opted to provide commentary on this question. A small number of respondents noted their support for the proposals outlined in the consultation paper and commented that local authorities need a comprehensive picture of heat demand and surplus heat. Some respondents echoed points made in the consultation paper; for example, that current data sources such as Scotland’s Heat Map are not suitably robust, that data related to energy efficiency measures are not accurately reflected in EPC data or that there are risks around commercial confidentiality and the use of energy data.

148. While a small number of respondents were supportive of data on surplus heat being provided on a voluntary basis to local authorities, a similar proportion noted that voluntary measures are unlikely to obtain the required data for the development of LHEES and, at best, may result in the provision of patchy information, which will serve to undermine the accuracy of LHEES.

149. In terms of accessing data, a number of suggestions were made, each by small numbers of respondents. The key suggestion, from local government and 3^rd sector / community respondents, was for a requirement for industry to provide energy consumption data on a mandatory basis. Conversely, a small number of respondents in the network, professional or trade body sub-group noted that industry should not be mandated as it is commercially sensitive information. That said, a small number of respondents also noted that European research has shown that large industrial heat users can collaborate with local plans for low carbon district heating or that collaboration and identifying synergies between stakeholders is the best way to progress and overcome commercial sensitivity barriers. Other suggestions included:

• Smart meters could be used to obtain data, although a similar proportion noted that this data would be limited as it does not record energy generation from low and zero carbon generation technologies (LZCGT).
• Education of, and engagement with, domestic and non-domestic users to encourage them to allow access to energy data; this would allow for community and business buy-in to the provision of data.
• Utilising a wide range of data sets including those already available. Those mentioned by respondents included the House Condition Survey, data from the Department of Business, Energy and Industrial Strategy (BEIS), data held by the Scottish Environment Protection Agency (SEPA), as well as historic data on consumption and modelled data consumption. A small number of respondents felt that if data was anonymised, this should help overcome issues in relation to data protection. A very small number of respondents in the business & industry sector or network, professional or trade bodies noted that there is a need to consider the benefits and limitations of different data sources and to highlight these when they are used.
• The provision of granular data, ideally at 1 minute intervals or at least half hourly.
• Data sharing agreements that offer all partners confidence in the process and consistency across Scotland would serve to remove concerns over the provision of commercially sensitive data.
• A national agency to collate data and support local authorities, or for the development of a commercial customer comparator tool to help customers understand the case for investment, or the provision of data logging equipment to existing key loads.

150. A few respondents highlighted drawbacks to the datasets, with respondents in the business & industry sector or network, professional or trade bodies commenting that a key concern for the housebuilding sector is that the proposed data sets will largely reflect existing buildings which have poor energy efficiencies and higher carbon emissions when compared to new buildings which have lower energy demand.

151. A small number of respondents, mostly in the business & industry sub-group requested that the collection of data should not be burdensome.

Further Call for Evidence on industry heat data

152. Question 7 then went on to ask:

Q7 What types of data information would industry be willing to provide a local authority or national delivery mechanism to develop LHEES, so that they can identify opportunities (potentially in aggregate) for heat demand reduction and heat recovery, both on and off site?

153. Twenty-seven respondents, across all sub-groups, opted to provide further commentary.

154. Rather than cite what types of data information industry might be willing to provide to a local authority or national delivery mechanism to develop LHEES, some respondents referred to related issues. A small number of respondents noted that SEPA should play a role in obtaining and / or the provision of data and that they already can provide some data.

155. There were a small number of references as to what potential might be available for partnership working or joint ventures in the development of LHEES, although a similar proportion of respondents also noted that data protection may be an issue or that data protection needs to be put in place so that any data published will be anonymised by individual or development. Issues relating to data protection were raised by organisations in the business & industry sector, network, professional and trade bodies and an organisation in the local government sector. There were also a very small number of comments on the need for local authorities to provide reassurances that any data provided will not be shared with other organisations or be subject to Freedom of Information requests. An organisation in the ‘other’ category noted that initiatives under way in European countries have gathered significant data on best practice approaches, and demonstrated willingness for collaboration and the sharing of data.

156. The commercial sensitivity of data was also raised by a small number of respondents, with an organisation in the academic sector noting that:

“some potential partners will be deterred if the data management plans and contractual agreements underpinning LHEES projects are not sufficiently stringent to assuage concerns over commercially sensitive data being used for competitive advantage by LHEES evaluators outside LAs and the Scottish Government”.

157. One network, professional or trade body organisation noted that their data is too commercially sensitive to share. Another noted that some energy suppliers and building owners are unable to share some data because of issues in relation to data protection and commercial sensitivity.

158. A few respondents in the business & industry sector or network, professional and trade bodies group commented that local authorities already have access to a significant amount of data in relation to new build housing including Standard Assessment Procedure (SAP) conditions and EPC data.

159. Some respondents cited specific types of information that might be provided and these included:

• Current heat outputs and anticipated future changes to output.
• Likely usage data / consumption levels.
• EPC data.
• Quantity, temperature, type of heat.
• Availability of heat over a specified time period.
• Generation data.
• Energy sources used for production.

160. There was a suggestion from a third sector / community organisation that heat should be added to annual returns on gas and electricity for larger organisations similar to the reporting under the Carbon Reduction Commitment Energy Efficiency Scheme.¹

161. An organisation in the business & industry sector noted that district heating developments will be most prevalent in inner cities and towns where the majority of potential connections would be domestic, public buildings or commercial spaces, so that the level of industrial enterprise to connect to district heating networks will be limited. Additionally, that industry will have tried all possible measures not to have waste heat to contain costs, so that any end product is likely to be low temperature in the form of heat to atmosphere or wastewater.

162. A number of themes echoed those seen at question 6. These included:

• The need for the Scottish Government to mandate organisations to provide information.
• A need for the Scottish Government or local authorities to engage directly with industry, professional associations and legal professions, and to set out the benefits of providing data.
• That the roll out of smart metering will improve the accuracy of available data on energy consumption.

163. Question 8 then asked:

Q8 What data from industry would be most helpful in developing district heating projects?

164. Thirty-seven respondents opted to provide commentary.

165. Most suggestions came from local government or business & industry organisations.

166. The key data considered to be most helpful in developing district heating projects was:

• Consumption data including duration times (1/2 hourly, daily, seasonal), volume and temperature.
• Cost data.
• Data on waste temperatures, waste volume.
• Amount of available heat.
• Data on surplus heat output.
• Operations information and details of processes that result in waste heat.
• Locations of potential ground source heating (Scottish Heat Map), with a suggestion that this should be updated to show developers, owners, capacity and type of scheme).
• Data covering building characteristics, to include physical characteristics and demand profiles.
• Length of time commitment can be made and likely downtimes.
• Security of supply requirements.
• Smart meter data.
• Likely variations in data provided or plans for changes.
• EPC data, although there were some acknowledgements that this is limited in nature. There were also a very small number of requests for this to be freely available as it is in England (organisations within business & industry or network, professional and trade bodies).

167. A small number of organisations in the business & industry or network, professional and trade body sub-groups requested access to research carried out by the Scottish Government. This included the Regulation of Energy Efficiency in Private Sector Houses (REEPs) in energy profiles of existing building stock, the Scottish Household Survey, feasibility studies that have been conducted and data on schemes which have failed or been successful.

168. Question 9 then asked:

Q9 What data could be provided without compromising competitiveness of these organisations?

169. Overall, 32 respondents opted to provide a response to this question; some of whom reiterated points made at the previous question. Around a quarter of these respondents focused on the data that could be provided without compromising the effectiveness of organisations; this data included:

• Waste heat recovery / generation, to help identify potential clusters of surplus heat.
• Energy / consumption data, with one respondent requesting this at an aggregate monthly level with daily, weekly and seasonal profiles, although they also suggested cost data should remain voluntary.
• Utility bill data.
• EPC data.

170. A small number of organisations in the network, professional and trade body sector and within business & industry noted that data is already within the public domain.

171. A key theme emerging, albeit from a minority of respondents, mostly within the local government sector, was of the need to encourage organisations to engage. Methods suggested included the need to build strong relationships with industry, to set up collaborative approaches or emphasising the benefits to businesses such as the potential for additional revenue generation or opportunities to improve financial value that will add to business efficiencies.

172. Another key theme, again coming primarily from local government organisations, was of the need to provide reassurances to businesses that any information provided will be treated as confidential; or to ensure there are confidential data sharing agreements that will restrict use of data for specific purposes.

173. Other issues raised by a few respondents included a potential role for central management so that data could be provided to a third party – potentially the government or SEPA – to protect the confidentiality of the data. An organisation in the business & industry sector also suggested that some data is already held by trade organisations who administer the climate change agreement on behalf of their members.

174. A small number of organisations commented on how data could be provided, with one suggestion that information could be provided on ranges of data rather than specific data; another that data would need to be provided in a consistent manner, using unique meter references so that this is open and transparent. A respondent in the network, professional and trade body sector commented that some data could not be provided because a low number of schemes will mean that any data provided could be compromising.

175. There was also reference from a small number of respondents of the need for statutory regulation to ensure data is provided. A similar number of respondents in the 3^rd sector / community and academic sector commented that the provision of surplus heat data is not likely to compromise the competitiveness of organisations.

Summary of Findings: Local Heat & Energy Efficiency Strategies

Most of those who replied agreed with the proposed approach to place a statutory duty upon local authorities to work with relevant stakeholders to produce Local Heat & Energy Efficiency Strategies (LHEES).

There were requests for more information on the resources and support that will be made available to local authorities.

Respondents commented on the need for more interim targets or milestones to be set within the 15-20 year period.

There were calls for clarity as to how LHEES will be reported, monitored and measured and suggestions that each LHEES will need regular reviewing or updating.

A significant number of respondents noted the need for reporting to have a joined-up approach with other developments across Scottish heat policy. A key concern was that of resources, funding and support that will be needed to carry out the LHEES reporting requirements.

There was majority support across all respondent sub-groups for the proposed overall approach to zoning. There were some concerns as to whether the zones will provide sufficient certainty to enable providers to commit to investment.

Community engagement was perceived to be a factor that would help with take-up and, alongside this, respondents referred to the need for district heating to be affordable to consumers.

A majority of those answering the question noted their approval of the proposed district heating consent process or specific elements of what was being proposed.

In relation to the developer of last resort, the preference from a majority of respondents was for a national body to adopt this role; primarily due to a lack of resources for local authorities to be able to take on this role. That said, there were also comments that the developer of last resort would need to be adequately resourced.

In terms of the consents process specifically, there were some comments that local authorities do not have the necessary resources to be able to manage this, alongside suggestions for a central body that would issue and manage consents.

Most of those answering agreed that district heating operators should have similar or the same rights as other statutory undertakers for permitted development and wayleaves.

There was broad agreement for socio-economic assessment to be included as part of LHEES.

A significant minority of respondents welcomed the commitment to provide statutory guidance for socio-economic assessment in the form of a detailed methodology, laying out an overarching process and providing standard assumptions.

Reference was made to the need for the process for socio-economic assessment to be accessible, consistent, comprehensible, and transparent.

A small number of respondents noted their support for proposals for data for LHEES, with comments that local authorities need a comprehensive picture of heat demand and surplus heat.

Views were mixed as to whether data on surplus heat should be provided on a voluntary basis, with some noting that voluntary measures are unlikely to obtain the required data for the development of LHEES.

Only small numbers of respondents referred to types of data information that industry might be willing to provide, instead referring to data protection requirements, the need to anonymise data or the commercial sensitivity of data.

The need to engage directly with industry and professional associations was cited by some respondents; along with the need to offer reassurances that data will be treated as confidential or suggestions that confidential data sharing agreements should be used to allay industry concerns.

A few respondents suggested the Scottish Government would need to mandate organisations to provide the required data.

Only a small number of respondents cited any data that could be provided without compromising the effectiveness of organisations.