Heat Networks (Scotland) Bill: evidence assessment

2 Introduction

2.1 Background

Scottish Ministers designated energy efficiency as a national priority in 2015, recognising the benefits delivered by improving the energy performance of buildings. Subsequently, the Scottish Government began the Energy Efficient Scotland (EES) programme to deliver these priorities.

Energy Efficient Scotland is a 20 year programme aimed at making Scotland's existing buildings near zero carbon wherever feasible by 2050, in a way that is socially and economically sustainable.

As part of the Energy Efficient Scotland framework, the Scottish Government has explored the potential for the implementation of a regulatory system for heat networks and communal heating, following on from several consultations across 2017 and 2018.

The Scottish Government has consulted on the use of a number of regulatory tools including a potential licencing regime for the development and operation of heat network schemes.^[1] These proposals could include processes such as a multi-tiered licencing regimes, mediation services and consenting processes.

2.2 Aim

As part of the policy development process, the Scottish Government will at some stage complete both a Financial Memorandum and full Business and Regulatory Impact Assessment (BRIA) of these policies as they are introduced.

• The Financial Memorandum^[2] would include an estimate of the administrative, compliance and others costs (and benefits) which could arise from policy implementation. This will allow an assessment of impacts upon any relevant bodies ((a) the Scottish Administration; (b) local authorities; and (c) other bodies, individuals and businesses) arising from proposed legislation.
• The Business and Regulatory Impact Assessments (BRIA)^[3] would be used to assess potential impacts of different available policy options. The BRIA would include an analysis of the cost and benefits to government, businesses and consumers of the proposed regimes, ensuring an objective approach to the delivery of the finalised policy.

The Scottish Government has consulted extensively around heat network regulation, and has begun the early development of the potential evidence base.

The Scottish Government has also sought to undertake a range of specialist evidence gathering activities to supplement the existing evidence around the potential impacts of these policies.

These activities will build on the existing evidence base, supplemented with new information and data as necessary, and allow the Scottish Government to undertake a robust appraisal of policy impacts for the purposes of a Financial Memorandum and BRIA.

This report sets out the findings of these evidence gathering activities and considers their potential viability for later assessment.

• Part 1 (Approach) focuses on - The approach to gathering the underlying evidence base on the potential impacts of policy, who was spoken to, how they were spoken to, when they were spoken to.
• Part 2 (Heat Networks) considers - An assessment and illustration of the potential impacts and evidence around upcoming heat networks policy.

2.3 Structure of this report

1) Part 1 is structured as follows:

• Chapter 3 sets out - The overall approach to this report.

2) Part 2 is structured as follows:

• Chapter 4 sets out - Background to heat networks regulations.
• Chapter 5 sets out - Our initial list of potential impacts of these policies gathered throughout the engagement process.
• Chapter 6 sets out - A further evidence based consideration of these potential impacts.