Current status: Answered by Patrick Harvie on 2 December 2021
To ask the Scottish Government what assessment it has made of any implications of the ending of the Renewable Heat Incentive (RHI), due to take place in March 2022, for the development and expansion of district heating schemes in Scotland.
The Non-Domestic Renewable Heat Incentive (NDRHI), which supported district heating development, closed to new applicants on 31 March 2021. However provisions were made to allow some applicants to commission up to 31 March 2022, in response to disruptions caused by the Covid-19 pandemic.
Through the Low Carbon Infrastructure Transition Programme (LCITP) we have awarded over £20 million of capital grant funding to help unlock seven heat network projects, all of which intended to apply for the NDRHI. Since the closure of the NDRHI to new applications the LCITP has provided grant support for the development of Investment Grade Business cases for zero emission heat networks being taken forward without RHI support.
A Non-Domestic Rates Relief of 90% for new heat networks run by renewable sources was introduced in April 2021, around the same time that the Non-Domestic RHI closed to new applicants. This relief will remain in place until 31 March 2024. This is in addition to the existing 50% relief for all heat networks which has been extended to remain in place until 2032.
As set out in our Draft Heat Networks Delivery Plan, we are committed to providing capital support to heat networks. The successor to the LCITP will launch this year, and we have committed to investing at least £400 million through this programme for large-scale heat infrastructure including heat networks.