HOT|COOL NO.1/2021 - "Fuel, Flexibility & Green Transition"

AMBITIOUS FIRST LEGISLATION ON DISTRICT HEATING A unanimous Scottish Parliament recently passed the Heat Networks (Scotland) Bill - the first legislative framework for district heating in the United Kingdom.

By: Jacob Byskov Kristensen, Energy Counsellor, Embassy of Denmark, London Mathias Grydehøj Mikkelsen, Advisor, Global Cooperation, Danish Energy Agency Rune Nielsen, Advisor, Global Cooperation, Danish Energy Agency

The framework aims at expanding the current use of district heating - referred to as heat networks - by a factor of 20 in less than 10 years. Success and experiences from the widespread deployment of district heating in Denmark served as amajor source of inspiration for the bill and its amendments. Great Scottish climate ambitions Scottish climate policy ambitions are amongst the highest in the world. The aim is to reach 75% reductions in climate emissions by 2030 compared to 1990-levels. By 2017, emission reductions were down to 51%, but two-thirds of this achievement came from reductions within the power sector. To reach the 2030 goal, Scotland, therefore, has a herculean task in front of them, especially when it comes to the heating sector. Heating homes and office spaces currently account for roughly 21% of all emissions, with around 87% of homes heated by gas, oil and coal. Ambitions, therefore, include converting more than 1 million homes and an estimated 50,000 non-domestic buildings to using zero or low emission heating systems by 2030. To make this happen, many changes will have to take place in regard to policy drivers and investments – as well as current supply chain skills and capacity.

The Bill sets in place ambitious targets and some of the regulatory measures needed to meet them. Today, Scottish district and communal networks provide heat for roughly 32,000 homes (1% of Scotland's total heat consumption). With the new Bill, the aim is to have 650,000 homes connected to district heating by 2030 – roughly a 20-fold increase in less than 10 years. To concretize these ambitions, the Scottish Ministers must ensure that the combined supply of thermal energy from heat networks in Scotland reaches 2.6 TWh by 2027 and 6 TWh by 2030. A huge task that will require significant commitment and expansion of the current supply chain and local government planning capacity. The Bill in itself, however, only provides the direction and skeleton of the regulatory framework that is to deliver on these promises. Over the coming months and years, so-called secondary legislation is to be developed and implemented. This will be equally important in ensuring the success and possibility of meeting the ambitious targets now passed by parliament. The Bill and the subsequent process around secondary legislation are not the only elements that play into developing an attractive and ambitious district heatingmarket in Scotland. Financial support will indeed also be needed to help drive deployment. Some schemes are already in operation including a low-rate District Heating Loan Fund, development support through a Low Carbon Infrastructure Transition Programme (LCITP) as well as a few other smaller initiatives. Furthermore, the Scottish Government has recently released a consultation on a new Heat in Buildings Strategy. According to this document, the total investment required for transforming homes and buildings in Scotland is likely to be more than £33 billion. The current Government also states its intention to invest £1.6 billion of capital funding in heat and energy efficiency over the next parliamentary term (4 years), if re-elected. It is not specified howmuch of this figure relates to district heating networks. Still, the document does state ambitions to further incentivize anchor load buildings to district heating and financial relief for renewable district heating schemes.


“1 million homes and non-domestic buildings to using zero or low emission heating systems by 2030” *

Legislating for ambitious deployment of district heating

After years of consultation and development, the Heat Networks (Scotland) Bill was unanimously voted through the Scottish Parliament on the 23rd of February 2021. The Bill is a landmark not only for Scottish climate ambitions but also for the United Kingdom as a whole, as it is the first of its kind. However, the central Government in London is also working towards introducing legislation to the sectorin the United Kingdom.

* Draft Heat in Buildings Strategy

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