Scotland will be the first country in the UK to legislate on the development of heat networks to help meet climate change targets and tackle fuel poverty.

The Heat Networks (Scotland) Bill, which was passed unanimously by Parliament on 23 February 2021, will introduce regulation and a licensing system for district and communal heating to accelerate the use of the networks across Scotland. Detailed guidance and regulations required to implement the Bill will be developed over the next two years.

Since the introduction of the Climate Change (Emissions Reduction Targets) (Scotland) Act 2019, we have seen that the Scottish Government are eager to roll out heat network schemes across Scotland. Heat networks can be run from renewable sources and can result in an efficiency in house holder savings.  Heat networks are generally more efficient than individual gas boilers and can also be run wholly from renewable sources, reducing the need for customers to procure and maintain their own boilers. A new consent system will be introduced to make sure that the new networks are developed in areas which will have the most benefit and are tailored to its needs.

It is estimated that heat networks can reduce greenhouse gas emissions by the equivalent of 90,000 cars by 2050 and generate annual fuel savings of around £130 for every household that connects to a heat network. Citizens Advice Scotland have welcomed the passage of the Bill which will protect consumers, and have in particular praised the inclusion of measures which will protect house holders from problems when heat networks fail to work effectively.

Now that the Bill has been passed, what key changes can we expect to see?

Heat Network Licence

All heat network operators will require a licence. A licence will ensure that that the operators are competent, fit and proper persons who are capable of providing an essential service.

Heat Network Consents

Required for construction and/or operation of a heat network. This will enable the regulation of the development and the operation of the networks. Consents will be granted to the operator.

Heat Network Zones

These areas will be designated by the Scottish Ministers or local authorities and will be areas which are particularly suitable for heat networks.

Heat Network Permits

This will give an operator the exclusive right to operate a new heat network within a Zone.

We can see some changes afoot within policy at a national and local level. At a national policy level, NPF4 is expected to focus on net-zero emissions, which will include the facilitation of decarbonised heating generation and distribution.  As part of NPF4’s outcome to create a wellbeing economy, consideration is being given to policy changes which will encourage new buildings to connect to existing heat networks where situated within a Heat Network Zone. In addition, one of the main aims of the long awaited Scottish Government’s Housing to 2040 strategy is to contribute to the tackling of climate change by delivering homes which are warm and affordable to heat.

At a local government level, there is evidence of the introduction of the reduction of emissions of greenhouse gases as becoming a key principle in their future planning.  For example, in approving their Climate Change Plan for 2021 – 2025, Aberdeen City Council have identified the expansion of connections to heat networks as a target by 2025. In addition, the Council’s Proposed Local Development Plan 2020 includes a new policy which will encourage and support the requirement for heat networks in developments across the City. This policy will require developments within the city centre/and or within an identifiable heat network zone to connect to an existing heat network where available, provide within the site an independent network and plant capable of connecting to the wider network in the future, provide heating/cooling system within any building capable of connecting in a future date, or heat and cool the building through a renewable form of energy produced on site. Developers submitting proposals will have to be mindful for this policy requirement in the Proposed Local Development Plan 2020 and it is likely that a similar approach will be adopted across Scotland.

Given the significance of the Scottish Government’s carbon reducing plans and for this to potentially become a key concept in national planning policy, it is likely that we will begin to see more planning policies coming through at a local level.  Whilst the detail of the forthcoming regulations and guidance are not yet known, it is clear that there is meanwhile some movement at a local government level.  It is likely that developers will have to give some consideration to heat networks in future proposals in order to comply with Local Development Plan policies, or at the least, evidence that their proposal shows an awareness of the requirement to tackle fuel policy and meet climate change targets.

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