Chamber and committees

Once again, I would say that we have consulted widely on a range of evidence-based targets. The target that we are setting was widely supported in the consultation. It sets out strong growth in the heat network sector, which we believe not only sends a signal about what we intend to achieve and builds confidence among investors but represents an achievable target that will help to decarbonise Scotland. I genuinely hope that, as we develop policy and the wider heat in buildings approach, members across the chamber will recognise not only the opportunity but the necessity of decarbonising Scotland’s heat.

The heat networks that exist at the moment—some are district networks that serve multiple buildings and others are communal networks that serve multiple customers in a single building—are found in a range of urban and rural settings, including in some island communities. It is clear that there will be a high level of potential in dense urban environments such as Glasgow, but that should in no way inhibit the development of networks in other parts of Scotland where they represent the most suitable approach to decarbonisation. That is why we are asking all local authorities to lead on the development of the LHEES. It would be wrong for central Government to say, “We’re going to decide what is appropriate in each local area.” Local leadership is necessary if we are to achieve this.

As I mentioned in my opening remarks, we already have the heat network support unit and the heat network fund. The unit is providing pre-capital support and the fund is providing capital support.

On the question about when this will happen, it is already happening. Local authorities are producing their LHEES and we completed the first national assessment report some time ago. Local work is being done to develop the LHEES and they are coming in local authority by local authority. I think that they are all expected and due in by the end of the year. Is that correct, James?

The aspiration is always to work together on issues that sit between devolved and reserved powers. Sometimes we are more successful at achieving that co-operation than at other times. As I mentioned, some of the changes that were recently made to the Energy Act 2016 at Westminster were agreeable, and we made good progress on some of those issues, although not necessarily all of them. We will continue to try to work together.

Of course my preference would be that we are able to make those regulatory changes here in Scotland. We have to work with the situation that we are in as we continue to—as the member knows—make the case for Scotland at some point taking those powers to itself. However, that certainly should not prevent us from rolling out heat networks urgently, because they are one of the most obvious ways to decarbonise Scotland, and particularly urban Scotland.

Yes, and the appointment of the Office of Gas and Electricity Markets as the regulator is one example of that. We need to ensure that there is consumer protection, and the appointment of Ofgem in that capacity will help to achieve that.

That question is relevant to the whole heat in buildings agenda. We know that we need to scale up and skill up. I have been working closely with Graeme Dey on the skills and education side of things. Work on the supply chain delivery plan is also including voices from industry who see the agenda as an opportunity.

I genuinely think that there is huge potential for us to see the heat in buildings agenda as an economic opportunity for Scotland. There is work to be had in decarbonising, and high-quality careers to be had from doing that work, not just between now and 2045 but beyond that, in maintaining and operating those systems.

James Hemphill wants to come in on your previous point.

The act allows us to continue to review the target. I think that it is at least a fair possibility that we will review the target upwards rather than downwards but, if a future Government decides that heat networks have not been the success that I believe that they will be, it would be for it to come back to committee and Parliament and ask to review the target in the other direction. However, I think that there is a stronger likelihood that we will see greater progress. We should be throwing our weight behind the development of heat networks as one of the most effective ways to decarbonise Scotland.

I would encourage the member and others in the committee, if they have not yet taken the chance, to visit some of the heat networks that are already in operation, including some that are being expanded or redeveloped.

In essence, the networks are made up of highly insulated pipes that go under the ground and come from a central heat source. They might involve the deliberate generation of heat for the network, or they might use a waste heat source. At the moment, we are letting valuable warmth from some waste heat sources go to waste, and heat networks can bring that heat to the consumer.

With heat networks, individual businesses or households would not need to have their own boilers, except, potentially, as an emergency back-up. They might choose to have something in reserve, but their main heating needs—and, in some circumstances, cooling needs—would be met via the network.

That is correct. That is what generates a revenue stream for the network, which is what makes it an attractive proposition for investors. The experience with heat networks in this country—and, I think, in Denmark, where they are used the most extensively of any European country—is that they tend to be affordable and attractive for that reason, compared with individual consumption of gas or other fuels.

Heat networks are particularly viable and effective when they have a range of different heat consumers—not all domestic but some commercial, some industrial, and large public buildings, for example—and a range of heat sources. Some networks will have a heavy reliance on a single heat source or small number of heat sources. Existing networks will be under a duty to bring forward a plan to decarbonise if they have a polluting heat source.

However, over time, as we see the extensive development of heat networks, we are likely to see that viability become an incentive for any operator to diversify its heat sources. That might be by using banks of heat pumps. In the Glasgow area, it might be using the River Clyde as a heat source, as Queen’s Quay does. It could also include industrial sources of heat, such as waste heat and other options. The diversification of heat producers and heat consumers is one of the things that will make the networks more viable for the long term.