We support the UK and Scottish Governments in setting an am- bitious policy and regulatory framework. Critically important in that will be the customer protections and licensing systems that govern how DH network operators Act - Warren Buffen famously reflected that "it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." February 2021 was a significant milestone for heat networks when the Act was passed. We were, and are, strong supporters of the enabling legislation – the Heat Net- works (Scotland) Act – and worked closely with the Scottish Government in developing its principles. Regulation will play a crucial role in establishing the right investment environment for DH. The Act is essentially a piece of enabling or framework legislation. Much of what's needed to bring it to life will be con- tained in secondary legislation or supporting regulations – So the hard work in getting it right for DH is far from over: O n consumer protection, this is, of course missing from the Act for the simple reason that it's outside the scope of the Scottish Parliament. But we recognize the importance of protecting consumer rights and need to find a way around its absence to establish consumer confidence. O n-demand assurance, we can bring DH to custom- ers' front door, but we can't make them connect. We need a balance of mandate and incentives to turn customers into heat consumers. T he Scottish government is, of course, looking at this and at the prospect of using business rates as a level for commercial buildings. And it's perhaps relatively easy to mandate connection for new build, which leaves the entrenched problem of what we do about existing buildings/retrofit. For statutory undertaker rights and wayleaves, we simply ask that the kind of automated access to third party land, to lay pipes, etc., which is already enjoyed by 'traditional' utilities, should be extended to DH. Also, finance and funding from the government need to support an area-based approach to DH. Why, for example, would you make a grant available to individ ual householders to install ASPS when a DH scheme is on its way? Also relevant to mention building regulations - These currently often discriminate against DH or don't ac- commodate our specific needs, and we'd like to see that changed The Act will introduce a welcome new licensing scheme along with permits and concession areas. We're keen to learn in more detail about how these will work alongside each other like vital parts of the same puzzle And of course, there's the question about whether we have the right skills in our supply chain to develop dis- trict heating at scale.
We see a role for the government working with the sector to address this.
To meet the climate targets set by governments, we must de- centralize and democratize . That means ambitious decar- bonization at scale to create a framework for infrastructure investors to have the confidence to invest in DH. A more decentralized solution means no longer transferring the system’s operating costs out of the local economy but keeping it more local by buying and trading energy in a local context, using resources already there. We are, however, not proposing complete decentralization but intelligent systems to get better control within communities and local economies. There is a paradox - in the heat sector because people are currently used to complete control of their heating system via their boiler. Still, they receive their energy through the central- ized national gas network. With DH, we are proposing moving to a locally centralized system. However, we see this as decen- tralizing from the national level and using local heat resources. At the same time, we propose to democratize. DH will see some disruption and a change in how users interact with their heating system. We need strong engagement with communi- ties to participate - as customers and as drivers of economic development and skilled jobs. We need to see society and con- sumer groups lobbying for these changes because they see the benefits of sustainable decarbonization. We also need more suppliers to create jobs through training, apprenticeships, and growing supply chains. Whether we are consumers, businesses, or community groups, there are now many more organizations actively par- ticipating and choosing to decide how they generate and con- sume their energy. Rather than the traditional ‘top-down’ sys- tem, controlled by a relatively small number of actors, it moves to a more consumer-led and participatory environment. Renewables are one of the key reasons for that – whether micro-renewables or small, community-scale projects. There is no reason why cooperative community projects cannot become larger city-scale projects where a contribution to the investment, and consequently control and benefits, is held by residents and institutions within towns and cities. There will still be a crucial role for central generation and dis- tribution of power. Still, local generation and storage can play a more significant role in supplying and balancing the power system. That role will inevitably be less so for heat, which can become more localized. Finally, it seems the door is slowly creaking open, and peo- ple are starting to see the whole picture rather than just local achievements in best practice. During the last 25 years there has always been a local aspect, other than the power grid. Therefore local empowerment is necessary in order to contrib- ute to the bigger strategic way of thinking.
For further information please contact: Paul Steen, paul1.steen@vattenfall.com
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