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Chamber and committees

Net Zero, Energy and Transport Committee

Publication of the Heat in Buildings Strategy

Letter from the Minister for Minister for Zero Carbon Buildings, Active Travel, and Tenants' Rights to the Convener, 7 October 2021

Dear Convener,

I am pleased to inform you that we have today published the final Heat in Buildings Strategy. The Strategy updates the 2018 Energy Efficient Scotland Route Map and the 2015 Heat Policy Statement and aligns with our updated Climate Change Plan, and sets out the steps required to reduce greenhouse gas emissions from Scotland’s homes and non-domestic buildings to zero by 2045, and to eliminate poor energy efficiency as a driver of fuel poverty.

This Strategy builds on the draft Heat in Buildings Strategy which was published for consultation in February 2021. Through the consultation we received an invaluable resource to support our ongoing policy development from a broad range of respondent types across all sectors. It was encouraging to receive wide support for the vision and actions we set out in the draft Strategy. We would echo the consultation’s overall key message that the heat transition will be immensely challenging and that we need to collectively take immediate action to accelerate delivery and reduce carbon emissions from our buildings to zero by 2045.

Our updated Climate Change Plan requires emissions from homes and non-domestic buildings to fall by a combined 68% by 2030 as compared to 2020. This will mean converting over 1 million homes and the equivalent of 50,000 non-domestic buildings to low or zero emission heating systems by 2030, and ensuring that a rapidly increasing proportion of Scotland’s homes and buildings achieve a good level of energy efficiency.

Over the period to 2030 the key technologies we to be deployed are energy efficiency measures and zero carbon primary heating systems, such as heat pumps and connection to heat networks, alongside secondary enabling measures such as thermal storage and micro renewables. We will continue to support the demonstration of other technologies such as hydrogen as a replacement for natural gas, which may become available at scale in the longer term, and other technologies that may have a more limited role in decarbonising our buildings such as bioenergy.

The Heat in Buildings Strategy sets out proposals for how the Scottish Government will allocate at least £1.8 billion during the next Parliament to catalyse action and accelerate the deployment of energy efficiency and low and zero emissions heating systems, protect those in fuel poverty, grow and develop our supply chains, create jobs and maximise local and national economic benefits.

The 2018 Energy Efficient Scotland Route Map set out our intention to use regulation to support the transformation of our buildings. Requirements on building owners to upgrade energy efficiency and install zero-emissions heating systems will be an essential underpinning for driving deployment. The Strategy sets out our proposal to build on our existing commitments to extend regulation for minimum energy efficiency standards to include requirements, where possible within our legal competence, to install and use zero-emissions heating systems. This will ensure that all buildings meet an energy efficient standard equivalent to at least EPC C by 2033, with the majority of buildings meeting this standard by 2030, and use zero-emissions heating and cooling systems by 2045.

We remain committed to working with the social housing sector and encourage the sector to take full advantage of the support available including through our Social Housing Net Zero Fund through which we are committed to investing £200 million of capital funding to support decarbonisation of social housing over the course of this parliamentary term.

Over this Parliament, we will also invest £200 million in the Scottish public sector estate to improve and reduce energy use and install zero emissions heating systems.

In the short term we will expand and scale up our existing delivery mechanisms. To help identify new financing models and routes to market for energy efficiency and low zero emissions heating systems, we are establishing a new Green Heat Finance Task Force.

It is important that we secure the economic benefits of this transition locally. We will develop a new Supply Chain Delivery Plan which specifically focussed on strengthening the broad supply chains needed to deliver energy efficiency and zero emissions heat in buildings at the pace and scale we need.

Over the next year, we will work to establish a virtual National Public Energy Agency to accelerate the transformational change in how we heat and use energy in homes and buildings - with a dedicated physical agency established by September 2025. This Agency will have a remit to provide information for the public on the steps they will need to take to decarbonise heat, as well providing advice and co-ordinating delivery programmes.

As we decarbonise Scotland’s homes it will be important that our actions continue to meet our statutory commitments to eradicate fuel poverty and the Strategy acknowledges the tensions we face in the challenge ahead to net zero by 2045. We will continue to target support to households in fuel poverty helping to ensure their homes achieve an energy efficiency rating equivalent to EPC C by 2030, and EPC B, by 2040, within limits affordable to the public purse. We remain committed to phasing out funding for fossil fuel heating systems by 2024, where it is not detrimental to our fuel poverty objectives and we will take a “low and zero emission heating system first” approach, taking steps to increase the number of zero emissions heating systems installed through Warmer Homes Scotland and our Area Based Schemes, with delivery targeted at those households who can benefit most from installing a heat pump or connecting to a heat network.

The powers needed to decarbonise Scotland’s homes and buildings span reserved and devolved areas. While we are maximising efforts in devolved areas, there are limits to what we can achieve on our own and we need to see urgent action by the UK Government in reserved areas. The Strategy sets out areas where UK Government decisions or actions are critical to unlocking a fair and just heat transition, including on gas regulation and energy market reform, if we are to support the pace of change needed, tackle fuel poverty and protect consumers in Scotland.

Earlier in the year, we also published a call for evidence on the future development of the Low Carbon Infrastructure Transition Programme. Following our consultation on the successor programme to the LCITP we are developing a replacement programme for deploying heat at scale, co-ordinating our support for the roll-out of heat networks and heat infrastructure. To achieve this, we will invest £400 million over the next five years in large scale heat decarbonisation infrastructure. We also consulted on Scottish skills requirements for heat and energy efficiency. We plan to publish our response to this consultation in a separate policy statement in late 2021. This will also include our proposals for quality assurance including quality marks and consumer protection. We are currently consulting on proposals for a reform to the domestic Energy Performance Certificate system.

We look forward to working with Parliament to take forward key aspects of this Strategy in order to reduce emissions from Scotland’s homes and buildings and to remove poor energy efficiency as a driver of fuel poverty.

Patrick Harvie