Local energy policy statement: consultation

Chapter 2: Places

The development of innovative and integrated local energy systems, designed to meet local needs, can be transformational

Principles

• Local energy projects should reflect local characteristics. The distinctive local resources, ambitions and priorities of particular places should be at the heart of future energy considerations.
• Collaborative approaches and partnership working on local energy plans will ensure all stakeholder groups are represented, and can participate, in the transition to local, low carbon energy systems.

2.1 Recognising local difference

This chapter outlines how a co-ordinated and planned approach to meeting all energy needs within defined local area could support people living and working ther

First and foremost, each local area is different – for example, each area will have different challenges as well as physical geography, building stock, and existing energy infrastructure.

Equally, each place will have its own ambitions and priorities, such as reducing fuel poverty, increasing life expectancy, improving employability, creating new employment opportunities, and/ or reducing declining populations. It is important that these are recognised as part of future energy considerations.

Energy is considered a service that facilitates the development and mobility of a place and its people.

Only by recognising the individual characteristics of an area, can proper consideration be given to the decarbonisation of the energy requirements of said area.

The high-level differences between certain types of location for local energy systems deployment is also reflected in the approach being taken by the enterprise agencies. Differences have now been characterised in a 'typology framework'. This is explained further in Chapter 5.

2.2 Scotland's Islands

The implementation of the National Islands Plan will build on and align, where possible, with Scotland's wider climate change commitments, policies and strategies, as well as with existing energy related schemes.

Scotland's Islands

Our islands can be at the forefront of the transition to low carbon energy.

The introduction of climate change adaptation and mitigation measures, whether increased revenue for island communities through renewable energy projects or the protection, recovery, restoration or enhancement of natural carbon stores (on land or in the sea) or the introduction of solutions to combat coastal erosion, can have a direct, positive effect on the local economy and environment.

2.3 More change and choices

Scotland has a strong track record of delivering renewable electricity, predominately in rural and island areas. For example, by 2018, Scotland had seen renewable electricity generation increase to 73.9%^[13] of that consumed. The change from fossil fuel generation to renewable generation has, for the majority of consumers, not had an impact on how they interact with the energy system where they live or work as the energy generated has gone directly into the grid. However, as part of the transition towards sustainable, localised sources of energy (including for heat and transport), it is likely that individuals and consumers will be exposed to greater system changes and choices.

Case Study: Heat Smart Orkney

The Heat Smart Orkney project was set up to establish and show how smart controls and local rebating can be used as a way of both mitigating the effects of curtailment on the Rousay, Egilsay & Wyre ( REW) community wind turbine while also addressing the issue of fuel poverty in Orkney.

Supported with £1.25 million from the Scottish Government's Local Energy Challenge Fund, the project works by diverting unused renewable energy into affordable heating, and is activated when the REW turbine is curtailed.

Smart storage heaters, flow boilers, hot water cylinders and immersion heaters are installed into participating homes as secondary heating devices, and these are switched on when a signal is sent from the turbine, via a cloud based platform to control equipment attached to each device – saving costs for individual householders.

Rather than watching the community turbine be turned off when the wind picks up, the community will be able to watch it continue to turn, knowing that local people are receiving cheap, green heat.

To reach our commitment to net zero by 2045^[14], it will be crucial that we all take ownership and actively consider how to decarbonise our whole energy system (electricity, heat and transport). Alongside this, there will continue to be a responsibility on energy providers to ensure they are providing reliable, resilient, and affordable energy for people who live and work here.

2.4 Strategic Approaches

The Scottish Government is committed to developing strategic approaches, based on locally distinctive needs, opportunity and priorities. However, it is also important to recognise that a local area's own natural resource may also be able to contribute on a larger scale i.e. nationally. Some of these are not directly linked to energy but do share similar values, such as, collaboration, integration and community involvement.

Place Principle

The Scottish Government, in collaboration with the Convention of Scottish Local Authorities (CoSLA), have agreed to adopt the "Place Principle"^[15]. The Place Principle provides a shared understanding of place, it helps overcome organisational and sectoral boundaries, encourages better collaboration and community involvement, and improves the impact of our combined resources and investment.

It is a common sense approach, providing a collective focus to support inclusive and sustainable economic growth, while creating places which are both successful and sustainable.

Implementation of the Place Principle requires a more joined up, integrated, collaborative and participative approach to decisions about services, land and buildings. It understands that, to maximise the positive impact of combined resources, each party involved must work better together, so that the whole is greater than the sum of its parts.

2.5 Local Heat and Energy Efficiency Strategies

The Scottish Government's energy specific approaches are focused on where we have powers: heat and energy efficiency. Using our devolved powers, we are proposing to legislate for statutory minimum requirements through Local Heat & Energy Efficiency Strategies (LHEES).

These strategies will set out the long-term strategic plan for each local authority area for heat decarbonisation and energy efficiency. These plans will be tailored to local circumstances, will guide delivery through Energy Efficient Scotland, and act as an investment prospectus - guiding and helping to attract inward private sector investment.

For example, a Heat Network Zone may be designated through LHEES, leading to targeted policies or funding to deliver large-scale district heating projects therein.

LHEES will form the basis of planning and delivering local energy systems in Scotland, helping to identify what technologies are needed where. They will support engagement across multiple stakeholders including individuals, business owners, community groups, and energy network operators.

However, as mentioned previously, the Scottish Government is limited in its ability to legislate in some areas (for example, around electricity generation and distribution). That is why our focus, to date, has been on the aspects of local energy planning that could be placed on a statutory basis – heat and energy efficiency.

2.6 Local area energy plans

There is, however, scope to go beyond this - if there is appetite to do so - to consider the whole energy system including energy generation, distribution and storage, as well as transport.

One approach would be to build on LHEES to produce a more granular local area energy plan – one that encompasses all of the local energy system. The main characteristics of these plans are: (predominately) local authority led, with wider stakeholder engagement, and focus on a specific area. This approach aligns with one of the Scottish Government's core principles as set out in Scotland's Energy Strategy: a whole-system view.

Some local authorities are already looking to produce energy plans along these lines. However, the decision on whether to develop a local area energy plan, alongside the potential statutory minimum requirement under LHEES, is one for local stakeholders to take.

As for LHEES, such a plan could be seen as an "energy prospectus", providing a shared purpose around decarbonisation to drive forward the necessary step change to galvanise a whole range of stakeholders to deliver transformation to the local energy system over a longer time frame. In summary: an enabler for transformational change.

Key steps that support strong local energy plans (LHEES and other models)

These can be adapted to meet individual circumstances, but offer a strong foundation on which to build an integrated and co-ordinated local energy plan:

• Stage 1: An assessment of existing local and national strategies and data availability.
• Stage 2: Area-wide assessment of existing energy resource through stakeholder engagement, including appraisals of: building stock (domestic and non-domestic) demand for heat and transport; opportunities and constraints; energy storage potential; assessment of different energy consumers and their needs.
• Stage 3: Area-wide setting of future local energy targets, including (but not limited to): energy demand reduction and decarbonisation; energy supply diversification and storage; local and community ownership; fuel poverty eradication.
• Stage 4: Conduct a socio-economic assessment of the solutions identified.
• Stage 5: Engage with local stakeholders to present findings and then use this engagement to inform selection of areas/ prioritisation of opportunities for future evolution of the local energy system, leading to the identification of programme priorities.
• Stage 6: Costing and phasing of delivery programmes in partnership with local stakeholders, including creation of new collaborative delivery mechanisms.

2.7 Community-led local energy plans

Another approach is community-led local energy plans. The main characteristics of these are: developed by local people who have an interest in the community and are in collaboration with other stakeholders.

These plans tend to focus on smaller geographical areas, but can benefit, and indeed support, other local, regional, and national strategies.

The Scottish Government, through CARES, matched funded an EU funded project (COBEN^[16]), which piloted community-led local energy plans.

A brief case study, highlighting the progress undertaken in the development of the local energy plan for Barra and Vatersay as part of the COBEN project, has been included below:

Case Study: Barra and Vatersay

• The development of Barra and Vatersay's Local Energy Plan was led by a local steering group, which encompassed representatives from the two community councils, Voluntary Action Barra and Vatersay, the Hebridean Housing Association and Barratlantic (a local business).
• This plan provides a community-led approach to considering the community's existing and future energy needs. Community priorities focussed on tackling fuel poverty, reducing energy use in the home, promoting the uptake of electric vehicles, more walking and cycling paths, and the development of opportunities to use local renewable generation and hydrogen.
• The plan identified 17 actions to take forward, which community organisations and businesses have worked closely together on while also developing new streams of investment to address the identified priorities.
• To progress these actions, stakeholders have considered initiatives which could have a significant influence on the local energy system. This includes how new community-owned renewable generation could supply energy demand in the north of Barra, and hydrogen to support the development of a hydrogen-powered ferry service between Barra and Eriskay.

There are a number of different strategic approaches available to local energy planning. While LHEES may be the statutory minimum requirement in future, which local authorities may have to comply with, other complementary approaches will be at the discretion of stakeholders within a specific area.

2.8 Local energy planning and wider climate change ambitions

The Scottish Government has supported a number of local energy systems demonstrator projects. However, these have tended to be done in isolation and did not take into account the wider energy systems in which the project was based. This needs to change.

We need to see a step change in our approach to decarbonisation, one that takes a more strategic overview, covering larger geographical areas, and involving partnership arrangements at delivery level between local communities, energy network companies, local authorities, the public, and private sector.

Local energy planning, both LHEES and wider local area energy plans covering all energy, will be a key building block to achieving that aim - and, strategically, individual local area plans should interact with other plans in neighbouring/ nearby areas.

As the development and deployment of local energy systems becomes mainstream across Scotland, these solutions need to be expanded into more densely populated urban areas – as decarbonising our energy system can be a catalyst in the revival of local town centres - and identify sustainable replicable models. This is reflected in the focus on strategic energy planning in a number of growth deals currently in development, including the Borderlands^[17] and Tay Cities^[18] deals.

For example, this could mean encouraging greater collaboration between local communities, local authorities, and housing developers/ builders to ensure new developments are created with long-term energy planning in mind that delivers for the net zero ambition.

2.9 Questions

7. What do you think the wider benefits of developing local area energy plans might be?

8. How can we encourage greater collaboration between the key parties involved in the development of local energy plans?

9. How do we ensure that whoever is leading a local energy plan is fully integrated into the LHEES process?