The recovery of heat from power generation in Scotland: study

8 Review of the Planning Position

8.1 Introduction

Planning policy is of singular importance for heat recovery. There are several reasons for this:

• The financial importance of the cost of the heat network. If heat loads and heat sources can be co-located, the costs of heat supply falls significantly. The financial modelling shows that high capital costs are a key barrier.
• Local planning for new developments can encourage or even require that new or existing developments connect to existing or future heat networks.
• Development planning and development management for large power stations can influence:
  • The selection of locations, and hence proximity to suitable heat loads.
  • The design of the station to included heat recovery.
  • The funding of district heating networks.
• A number of stakeholders commented that planning was a barrier to district heating; however this may be a perception as limited evidence was provided.
• International experience suggests that planning is a key component in the successful development of district heating.

This section of the report:

• Reviews the relevant parts of current planning policy in Scotland.
• Surveys planners on the inclusion of heat recovery in the new strategic and local development plans.
• Develops conclusions on the impact of current and future planning policies.

8.2 Current Planning Policy

Current planning policy includes:

• National Planning Framework, which sets long term strategic policy.
• Scottish Planning Policy, which sets out the requirements for large scale and small scale developments.

Both of these documents are relevant, as they set out key issues that should be considered in planning level applications and in larger scale developments.

Additional advice is provided for:

• Power stations over 50 MW power output, these are significant sources of heat and a specific consent under Section 36 of the Electricity Act 1998 is required.
• Renewable energy.

8.2.1 National Planning Framework 2

The National Planning Framework has a key role in co-ordinating policies with a spatial dimension and aligning strategic investment priorities. It provides the strategic spatial policy context for decisions and actions by the Scottish Government and its agencies.

The Framework can designate certain developments as national developments. National Planning Framework 2 ( NPF2) ^[22] identifies a number of major transport, energy and environmental infrastructure projects. These include the sites of major power stations.

The NFP2 includes climate change and energy as key issues and recognises the low carbon sources of heat have an important role to play, including heat recovery from power stations and local heat and power schemes.

The Framework requires that local authorities: "should take account of the potential for developing heat networks when preparing development plans and considering major development proposals."

NFP2 also includes "heat utilisation" as an issue to be considered in the consents for the power stations designated as national developments.

Hence there is support for heat recovery in the current NFP2. However the details are very broad and are focused on the heat supply side - not heat demand. Hence there is potential for future documents to contain more specific policy and to address the need to co-locate large heat consumers next to large sources of heat.

8.2.2 Scottish Planning Policy

Scottish Government's advice on all planning matters to local authorities was significantly revised when Scottish Planning Policy Guidance ( SPP) was issued in February 2010 ^[23] . This replaced previous advice on specific topics e.g. SPP6 on Renewable Energy.

The new SPP encourages spatial planning to bring about co-location. There are several specific references that are relevant to heat recovery:

• Para 43 "… When designating land for new residential, commercial and industrial development, planning authorities should consider the energy and heat requirements of these new developments. New development should be planned to make use of opportunities for decentralised and local renewable or low carbon sources of heat and power wherever possible."
• Para 60 "…consider the potential to reduce impacts on the environment, for example using …combined heat and power systems."
• Para 128 "Production of heat and electricity from renewable sources will also make an important contribution both at a domestic scale and through decentralised energy and heat supply systems including district heating and biomass heating plants for businesses, public buildings and community/housing schemes."
• Para 184 "Development plans should support all scales of development associated with the generation of energy and heat from renewable sources."
• Para 255 "The planning system has a significant role in promoting a pattern of development which helps to reduce Scotland's carbon footprint and facilitates adaptation to climate change, in facilitating the generation of power and heat from low carbon sources.

Local authorities are currently revising their plans in the light of this, hence the impact of the new SPP will depend on:

• How broad advice in the SPP is built into the detailed development plans.
• How developers and local planners interpret and act on the advice and plans.

Hence, the impact of the new advice cannot be judged for several years. In conducting this study, a questionnaire was sent to planning authorities. This asked for details of how heat recovery is covered in existing and future development plans (see section 6.3.2 for details).

8.2.3 Section 36 Consent

All power stations over 50 MW of power output require consent from the Scottish Government under Section 36, of the Electricity Act 1998. This power is executively developed to the Scottish Government and local authorities, SEPA, SNH are statutory consultees in this process. NPF2 and SPP are material for Section 36 applications, but additional guidance is also used for these power station applications.

New advice on Section 36, consents for thermal power stations in Scotland was published in March 2010, following a consultation process ^[24] . This includes two key paragraphs in a separate section on heat recovery (Paras 3.6 to 3.14):

• "3.10 Article 6 of the LCPD requires that new or substantially expanded thermal installations undertake a CHP feasibility study. The Scottish Government directed SEPA in the Pollution Prevention and Control (Combustion Plant) (Scotland) Directions 2007 to give effect to relevant provisions of the LCPD (including Article 6) in any permit granted to any such installation."

• "3.13 The application would also need to demonstrate that discussions with planning authorities have been held. This should include a CHP feasibility study which should be undertaken in a manner reflecting SEPA's Heat and Power Plan SEPA's Thermal Treatment of Waste Guidelines 2009."

The SEPA advice requires developers of energy from waste schemes to develop and submit a Heat and Power Plan. This recognises that the level of heat recovery during the period of initial operation may be low. Hence the Heat and Power Plan allows a period of time (typically five to seven years) for heat loads to be connected.

At the end of this period the performance of the scheme is tested under the Combined Heat and Power Quality Assurance scheme ( CHPQA). CHPQA is used to assess a range of benefits including ROC eligibility and is aligned with the requirements of the EU Cogeneration Directive.

CHP Feasibility studies have been published by:

• Ayrshire Power - Hunterston.
• Forth Energy - Dundee, Rosyth, Grangemouth and Leith.

AEA understands that more detailed design and analysis work is taking place on a number of these projects and that local authorities are being approach to discuss the potential connection of their buildings to the potential heat network.

These investigations and discussions would not have taken place if the new advice had not been in force. So a material change has taken place in the development process. However no power station has been consented under the new system and even if it had, the timetable for power station construction, including a heat network, would take place over several years. Hence, it is too early to judge if this policy will deliver heat recovery from these other sites.

The Forth Energy sites could potentially supply anchor heat loads that are within the catchment areas for the four large conventional stations.

8.2.4 Renewable Energy Planning Advice

Web-based planning advice on renewable energy is now produced by Scottish Government ^[25] . This has separate sections on a number of different technologies including; Energy from Waste, Anaerobic Digestion etc. A number of these include recovery and use of heat.

This web guidance will be regularly updated and replaces; PAN 45 Renewable Energy Technologies, and Annex 2 Spatial Frameworks and Supplementary Planning Guidance for Wind Farms.

8.3 Survey of Planners

As a result of the introduction of the new SPP councils are revising their plans ^[26] . Hence a questionnaire was developed to assess how current and future plans support the recovery of heat. This is relevant as:

• This insight helps establish the status quo, in terms of policy and examples of schemes developed using current guidance and plans.
• The policy recommendations from this study should complement the existing policy frameworks. Hence establishing how existing policy is being interpreted and used is important to ensure that the recommendations do not duplicate initiatives that are already underway.

Accordingly, AEA developed a letter with 3 questions - one of these related to future development sites, the second and third question covered the planning issues - see box below:

Question 2

The planning system can support the decarbonisation of electricity generation in Scotland, the uptake of local district heating schemes and the use of recovered heat in other potential uses.

What action is your authority undertaking to support this?

This typically might include:

• The preparation of a heat demand assessment / heat mapping resource to inform the MIR / development plan? (if you have a heat map, is this published / could you provide a web link)
• Coverage of heat recovery / district heating under an 'energy efficiency' main issue in the Main Issues Report?
• Policy support for using heat recovery and /or district heating in development plans?
• Specific proposals for use of heat recovery / district heating?
• Supplementary planning guidance on heat recovery and /or district heating?

Question 3

If there is any other information which you think would assist the Scottish Government in carrying out the study, please provide detail below:

The Scottish Government would be particularly keen to hear your views on any technical, economic or planning barriers to bringing forward the use of waste heat, heat demand assessments, heat mapping and district heating in your area, and if any Scottish Government policy interventions might assist in these areas.

This letter was issued by Jim McKinnon, Chief Planner in the Scottish Government, to the planning authorities within the relevant power station catchment areas.

8.3.1 Survey Results

Question 2: …what action is your authority undertaking….?

The responses to the letter included a wide range of useful information and insight. In general the responses showed that:

• There was a high level of awareness of this aspect of planning policy.
• Some existing plans already have relevant sections on heat.
• The relevant plans are still in development - hence there is an opportunity to influence these.
• The Main Issues Reports ( MIR) highlighted heating options as a key issue.
• There were some examples of heat maps and exemplar projects.

The full returns are detailed in Appendix 3: Responses from Planners, the following table sets out a sample of the points raised in the responses, grouped under the headings listed above:

Table 33 Sample plans

Plans detailing heat recovery
Falkirk Council	In current Falkirk Council Local Plan policy EQ6 supports combined heat and power and community heating schemes as part of new development. Policy ST20 offers general support to utilisation of renewable energy sources in new development. A current proposal, being determined by Sc Govt, for a biomass plant in Grangemouth Docks has a district heating component option to it.
Aberdeen City and Shire Structure Plan	Developers will need to examine the scope for including energy efficient technology, such as combined heat and power schemes when preparing development proposals.
Joint Ayrshire Structure Plan	The Structure Plan identifies a search area in the key diagram and an opportunity to develop a co-fired power plan based on clean coal technology. The coalfield area of East Ayrshire is recognised as having particular opportunities for this type of energy production. Refer Policy ECON 8-Biomass.
The relevant plans are still in development - hence there is an opportunity to influence these.
SES Plan (South East Scotland)	The MIR recognises that decisions on the location of strategic development sites can assist in contributing to a reduction in the demand for energy through the need to travel and the delivery of options for decentralised energy production, including opportunities for local heat and power schemes energy from waste and micro - generation. The Preferred Approach as outlined by the MIR recognises that at the Strategic Growth Area level, consideration of alternative heating options for developments such as district heating and combined heat and power, and sustainable construction and development will also contribute towards ensuring the best use of resources.

The Main Issues Reports ( MIR) highlighted heating options as a key issue.
SES Plan (South East Scotland)	The preferred approach as outlined by the MIR recognises that at the Strategic Growth Area level, consideration of alternative heating options for developments such as district heating and combined heat and power, and sustainable construction and development will also contribute towards ensuring the best use of resources.
Clac kmannanshire	The MIR consultation ended in March 2011. This placed a strong emphasis on climate change mitigation and one of the main issues identified, and consulted upon, was "How can we reduce our greenhouse gas emissions and adapt to the consequences of climate change". The MIR contained a range of options related to Decentralised Energy, Decarbonised Energy Generation and Low Carbon Development. These can be viewed on the Clac kmannanshire Council website. The potential of re-use of heat to significantly reduce energy waste, increase efficiency, reduce costs for energy users and contribute to climate change mitigation is acknowledged in paragraph 4.12 of the MIR. Following recent discussion with Kristen Anderson and Rosie Leven it has been agreed that the Local Development Plan should contain specific proposals relating to waste heat. We also intend to investigate the scope for specific proposals on district heating.
There were some examples of heat maps and exemplar projects.
Joint Ayrshire Structure Plan	A GIS Heat Map and briefing paper has been produced.
Fife Council	Cited several projects under development that could have potential to supply public buildings and housing: 1. Tullis Russell biomass plant, Glenrothes 2. Lochhead landfill waste treatment scheme 3. Ore Valley Housing Association

Several examples of existing guidance documents ( e.g. on renewable energy or general development guidelines) were cited in the responses. Generally these made a broad reference to heat issues.

A key finding is that:

There were no specific targets or tests that a developer would need to meet. Hence there is an opportunity to make plans and guidance more specific and more quantified to strengthen the requirements for development plans to only allocate significant sites where there are available heat loads and to require certain developments to connect to heat sources where these are available.

Question 3: Barriers as identified by the planners

The barriers detailed by planners are detailed in full in the table below. This feedback from the planners was fundamental to the development of section 9 (Identification of Barriers) of this report.

Table 34 the most significant barriers to the recovery of heat from large scale energy generation capacity in Scotland, as identified by planners

Proximity to heat demand
1	Proximity of heat demand (for existing energy plants)
2	Larger scale power generation facilities which are often located at sites isolated from the major built up areas
3	Proximity to power station of suitable building stock
4	Land use planning difficulties in allowing integration of heat users and heat generators
5	Planning - location of energy plants away from heat demands
6	Existing building plant in suitable buildings may not be inefficient enough to warrant this
7	The distance between the fossil fuel plants and main settlements, which would require an extensive new pipeline network to be created
Financing
1	Limited financial incentive and uncertainty in appropriate business models for the construction and ongoing maintenance of facilities
2	Financing of heat infrastructure - banks not willing to debt fund
3	Financial considerations/lack of clarity over investment against returns
4	Long term pay back periods are a significant constraint
Fragmentation of ownership
1	Discontinuity between supplier and customers, fragmentation of ownership - probably works best with large single social housing estates or similar
2	Disparate ownership of land, property, generation, transmission, maintenance responsibilities
3	Responsibility for maintaining infrastructure
Lack of exemplars
1	Lack of current projects that have undertaken heat recovery schemes from power stations
2	A mindset and culture not tuned to this form of heat source Limited skills and understanding of the technology
3	Mindset and culture not tuned to this form of heat source
Inertia: resistance to change
1	Inertia: resistance to change
2	Lack of ambition to change tried and tested processes
Lack of community engagement
1	Making local communities aware such schemes are planned/ installed
2	Providing local residents with simple explanations of benefits when installed

Restrict choice of electricity suppliers
1	Decentralisation of heat supply could (allegedly) restrict choice of electricity suppliers for householders (an issue raised by house builders with East Lothian Council)
2	Issues around single user use and spreading of risk amongst multiple users
Perception of being dirty
1	Potential perception of problems of secondary heat and associated industrial processes being "dirty"
Absence of infrastructure
1	Absence of infrastructure
Lack of willingness to act
1	Agreement with power station to do this, including pricing
Fiscal policies
1	Fiscal policies
Risk
1	Risk averseness of businesses requiring reliable heat supply over long timescale
Heat efficiency in both ends of the equation
1	Heat efficiency in both ends of the equation
Opposition to biomass
1	Public opposition to biomass plants
Limited skills and understanding of the technology
1	Limited skills and understanding of the technology
Commercial sensitivity
1	Commercial sensitivity regarding industrial estate & processes
Lack of leadership
1	Lack of lead agency on initiative
Lack of certainly about heat availability
1	Lack of long term certainty about excess heat generation
Difficulties in retro-fitting heating systems
1	Difficulties in retro-fitting heating systems to existing dwellings and business premises, which form the vast bulk of the building stock.

8.3.2 Survey Conclusions

The survey of planners found several examples of new local planning policy ideas that consider heat supply and will encourage the co-location of heat supply and demand.

However these policies are largely under development and have yet to be implemented and tested against real planning applications. Hence it is too early to be certain of their impact.

This said, these policies do not have the wholesale transformation of heat supply as their objective as seen in the case study for Denmark. This was not part of the wider policy framework that informed the development of these planning policies.

Hence it is unlikely that these new strategic and local development plans will deliver a significant and major transformation on the recovery of heat at large scale or in local scale district heating systems. This degree of changes was not a major factor in the development of these new plans, nor is there are significant evidence base to show the location and scale of potential of district heating development. The development and use of heat maps will assist in this, but at present only a small number of planning authorities have this information.

8.4 Planning Conclusions

This section shows that:

• Many of the key planning policy documents have ( NFP2 and SPP) or will have (new strategic and local development plans) support for recovery of heat and co-location of heat supply and heat demand.
• NFP2 and SPP are recent documents, while the new strategic and local development plans are not yet in place.
• So while these planning policies include many elements that encourage heat recovery and district heating, it is not possible to be fully certain of the impact of these new policies on spatial planning and actual development.
• It is likely that there will be incremental progress, as project developers start to understand these planning requirements and adapt proposals and as planners test proposals against these new requirements.
• However, the new planning policies were not conceived, or drafted, with the aim of a delivering a rapid transformation in the uptake of heat recovery and district heating in Scotland.
• Hence the impact of these new policies is not expected to mirror the growth of district heating in countries like Denmark - where mandatory polices on spatial planning and co-location of heat demand and supply are in place over a long period.

Assuming that these conclusions are correct, and that there is a policy requirement to deliver much great uptake of heat recovery and district heating, this suggests that:

• In the short term opportunities for heat recovery and district heating may be missed, as co-location cannot be delivered after heat loads and heat sources have been given consent.
• If a transformation in the uptake of heat recovery and district heating is required, further changes in planning policy under SPP will be required to accelerate uptake.
• This may require more prescriptive policies such as the mandatory requirements in place in Denmark to be considered.
• A review of international planning policies would provide valuable insight into the policy options that have been used and how they could be relevant to the Scottish context.
• Testing the impact of planning policy ideas is an important part of the analytical work of this study.