Chamber and committees

Our Heat Network Support Unit (HNSU) offers advice and grant funding for the pre-capital stages development including for feasibility studies, Outline Business Cases and strategic heat network support for local authorities to build on their Local Heat and Energy Efficiency Strategies (LHEES). To date, the HNSU has formally supported 55 pre-capital projects in 18 local authority areas, with the Scottish Government committing approximately £3.2 million of financial support. The HNSU also hosts a District Heating Mentoring Programme in collaboration with the Danish Board of District Heating and the Royal Danish Embassy to link Scottish local authorities directly with district heating experience from Denmark to build the capacity and skills required to deliver district heating.

Scotland’s Heat Network Fund (SHNF) provides capital grant funding to public and private sector organisations to support the rollout of zero-emission heat networks across Scotland which meet key criteria including to provide low carbon and affordable heat to end users. In total, through the SHNF and its predecessor, the Low Carbon Infrastructure Transition Programme, Scottish Government has committed approximately £62.6 million to 19 heat network projects, 11 of which are local authority led.

The Scottish Government recognises the important role that community organisations play in identifying and developing local energy solutions and encourage local authorities to undertake community engagement as part of their development of heat networks. As heat networks are inherently local assets, local authority involvement can help to align projects with LHEES and other local plans, and secure third party, private investment where needed. We are currently considering options for community heat network support.

Consumer protection including the price of heat is a reserved matter. We are working with the UK Government and Ofgem to support the introduction of GB-wide heat network authorisations under the UK Energy Act 2023. Authorisations came into effect in January 2026 and will introduce rules around fair pricing, clear and transparent billing and other protections for heat network customers for the first time.

Both the Cabinet Secretary for Climate Action & Energy and I have recently written to the UK Government to ask what action it plans to take to address the cost of electricity for heat networks. We await a response on this.

Meanwhile, we are developing further Scottish regulation under the Heat Networks (Scotland) Act 2021 and the future Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill which will, in time, allow scrutiny of the expected outcomes and impacts on end users before projects begin construction. In March 2026 we will launch a public consultation on heat network licence proposals which will also set out our future plans in this area, in line with my statement to Parliament on 18 November 2026.

The Scottish Government provides core funding to Consumer Scotland to advocate on behalf of Scottish consumers and consider Scottish specific issues, such as those highlighted in this report. My officials will continue to meet regularly with Consumer Scotland to discuss, and provide support, to address the issues raised.

We also see a key role for Local Heat and Energy Efficiency Strategies (LHEES), which are developed and delivered by local authorities, to help aid public awareness of the likely future heating solutions in their area.

Heat network consumer advice is provided by Advice Direct Scotland, funded by Consumer Scotland.

Following the GB wide authorisations which came into force on 27 January 2026 and included consumer protections, Consumer Scotland, Advice Direct Scotland, and Citizen’s Advice Extra Help Unit will advocate for Scottish consumers and escalate key issues. Consumer Scotland are creating content to raise awareness of this with Scottish consumers.

Heat network consumers are able to access direct support through Advice Direct Scotland either via Energy Advice | Energy Advice | energyadvice.scot or through the helpline (0808 196 8660).

The Heat Networks Delivery Plan (HNDP), published in March 2022, and the first Review Report, published March 2024, outlines how the Scottish Government will contribute to increasing the use of heat networks in Scotland and meeting the statutory targets. The reporting period for the subsequent HNDP Review Reports is every 2 years from the date on which the last review report was laid in parliament.

On 18 November 2025. I announced to Parliament that the future Buildings (Heating and Energy Performance) and Heat Networks (Scotland) Bill would include provisions relating to heat networks including:

• a regulation-making power to require qualifying buildings in a heat network zone to connect to a heat network or decarbonise their heating system;
• a regulation-making power for heat network installation and maintenance licences; and
• changes to the Heat Networks (Scotland) Act 2021 to streamline its regulatory regime.

The Scottish Government is absolutely committed to supporting a just transition to net zero for workers, communities and businesses. Through initiatives such as the Just Transition Fund and the Energy Transition Fund, we have invested £120m in the North East and helped leverage in tens of millions in extra investment, create green jobs, support innovation, and secure the highly skilled workforce of the future.

Budget positions reflect the challenging overall fiscal context. Despite this, the Scottish Government has maintained support for key Energy Transitions initiatives such as the Grangemouth Just Transition Fund, the Oil and Gas Transition Training Fund and Carbon Capture Utilisation and Storage. The Just Transition Fund for the North East and Moray is crucial in realising our just transition ambitions and is just one part of a wider package of support for the region. The Just Transition Fund’s multi-year settlement, set out in the Spending Review, underlines the Scottish Government’s commitment to the Fund.

Following our commitment in 2024 to invest up to £500m over five years in offshore wind infrastructure and supply chain, the Scottish Budget has allocated up to £93m for investment in 2026-27. We are working closely with industry and public sector delivery partners to identify and deliver projects at pace, with a continued focus on leveraging significant wider investment. Over the past two years, we have made £200 million of capital funding available and allocated £100 million, leveraging up to £370 million of private investment, with the potential to support over 2,000 jobs.

And overall to date, our investment of almost £150 million is crowding in a further £70m from UK public finance institutions and leveraging up to £670 million in private investment into projects with the potential to support up to 5,000 jobs.

The impact of global offshore wind market conditions, and delays to progress on key UK-level policy and system enablers – including Contracts for Difference, transmission charging, electricity grid connections, and the Strategic Spatial Energy Plan – have affected short-term investor confidence. It is now more important than ever that the UK Government takes decisive action to ensure the Scottish project pipeline can be deployed quickly in order to deliver the thousands of offshore wind sector jobs that can support a just transition.

Ministers and COSLA Leaders have agreed that £42m from the General Capital Grant will be distributed for flood resilience in 2026-27. The Draft Budget also includes £20m of capital funding for the Climate Emergency, and £15.5 for Inter Island Connectivity.

The Scottish Government’s policy on spending is to allow local authorities the financial freedom to operate independently. It is then the responsibility of local authorities to manage budgets and to allocate their financial resources, including on flood protection, on the basis of local needs and priorities, having first fulfilled their statutory obligations and the jointly agreed set of national and local priorities.

The Scottish Government’s Community and Renewable Energy Scheme (CARES), continues to play a central role in supporting communities to engage with, participate in, and benefit from Scotland’s transition to net zero emissions.

In 2024-25, CARES Recovery funding delivered or supported 154 projects across all of its funding calls.

In 2025-26 to date, CARES Recovery funding has so far delivered or supported an estimated 264 projects through its funding calls. The Community Energy Generation Growth Fund and the Community Solar Fund were both supported by a combination of Scottish Government and Great British Energy funding. As this financial year is ongoing, the final number of projects delivered is subject to change.