Chamber and committees

Of the £49.1 million allocated toward the Climate Action and Just Transition Fund, £20 million has been allocated toward the Just Transition Fund for the North East and Moray. The remaining £29.1 million is split across a wide range of policies and programmes as detailed in the level 4 budget spreadsheet. The exact allocation between these policies and programmes will be confirmed once the Budget Bill has completed its passage through Parliament.

The Scottish Government published an analysis of the suitability of low and zero emissions heating systems across the whole housing stock, including off-gas-grid homes. The report can be found at https://www.gov.scot/publications/technical-feasibility-low-carbon-heating-domestic-buildings-report-scottish-governments-directorate-energy-climate-change/

Chapter 2 of the Heat in Buildings Strategy sets out further considerations, uncertainties and evidence pertaining to the suitability of different technologies in different contexts. https://www.gov.scot/publications/heat-buildings-strategy-achieving-net-zero-emissions-scotlands-buildings/pages/3/

The Scottish Government has previously commissioned research which considered the capital and operational costs associated with zero direct emissions heating (ZDEH) technologies within new homes, which encompassed various types of air source heat pumps and direct electric heating. The report, however, did not specifically consider infrared heating panels. A copy of this research is available here: Costs of zero emissions heating in new buildings (climatexchange.org.uk)

As set out in the Scottish Government’s Heat in Buildings Strategy, we are developing regulations to ensure that new homes, applying for a building warrant from 2024, must use ZDEH systems. We consulted on initial proposals for these regulations during 2020-21, and have published an analysis of the consultation responses, which will inform the final design of the regulations. It is our intention for these regulations to be technology-neutral, to ensure developers have flexibility in achieving compliance. At the introduction of these regulations, a full Business and Regulatory Impact Assessment (BRIA) will be published – which will set out the costs and benefits of the policy options considered. We will also undertake a range of impact assessments, including a BRIA, on our proposals to regulate heating systems in existing homes (including off-gas grid homes) when we separately introduce the necessary legislation to achieve this.

Home Energy Scotland (HES) deliver the Home Energy Scotland Loan Schemes on behalf of Scottish Government. Home Energy Scotland does not recommend measures to customers, but instead offers funding for measures recommended on an EPC or renewables report.

A number of zero carbon space and water heating technologies are available for funding through Home Energy Scotland:

Water Heating Systems

Heat Pumps (either air source to water, ground source to water, water source to water or hybrid air source to water)

Biomass boilers or stoves (non-automated, non-pellet stoves or room heaters are not eligible)

All the above measures attract cashback under the HES Renewables Loan Scheme.

The Scottish Government has previously commissioned research which considered the capital and operational costs associated with zero direct emissions heating (ZDEH) technologies within new homes, which encompassed various types of air source heat pumps and direct electric heating. The report, however, did not make a distinction between ducted or ductless heat pumps. A copy of this research is available here: Costs of zero emissions heating in new buildings (climatexchange.org.uk)

As set out in the Scottish Government’s Heat in Buildings Strategy, we are developing regulations to ensure that new homes, applying for a building warrant from 2024, must use ZDEH systems. We consulted on initial proposals for these regulations during 2020-21, and have published an analysis of the consultation responses, which will inform the final design of the regulations. It is our intention for these regulations to be technology-neutral, to ensure developers have flexibility in achieving compliance. At the introduction of these regulations, a full Business and Regulatory Impact Assessment (BRIA) will be published – which will set out the costs and benefits of the policy options considered. We will also undertake a range of impact assessments, including a BRIA, on our proposals to regulate heating systems in existing homes (including off-gas grid homes) when we separately introduce the necessary legislation to achieve this.

The Scottish Government has previously commissioned research which considered the capital and operational costs associated with zero direct emissions heating (ZDEH) technologies within new homes, which encompassed various types of air source heat pumps and direct electric heating. The report, however, did not make a distinction between ducted or ductless heat pumps. A copy of this research is available here: Costs of zero emissions heating in new buildings (climatexchange.org.uk)

As set out in the Scottish Government’s Heat in Buildings Strategy, we are developing regulations to ensure that new homes, applying for a building warrant from 2024, must use ZDEH systems. We consulted on initial proposals for these regulations during 2020-21, and have published an analysis of the consultation responses, which will inform the final design of the regulations. It is our intention for these regulations to be technology-neutral, to ensure developers have flexibility in achieving compliance. At the introduction of these regulations, a full Business and Regulatory Impact Assessment (BRIA) will be published – which will set out the costs and benefits of the policy options considered. We will also undertake a range of impact assessments, including a BRIA, on our proposals to regulate heating systems in existing homes (including off-gas grid homes) when we separately introduce the necessary legislation to achieve this.

The Scottish Government is developing an Energy Strategy & Just Transition Plan which will be published in 2022. This document will serve as a plan to transition from today’s energy sector to an new, net-zero sector which meets the 2030 and 2045 climate targets in a fair and just way for all of Scotland.

We do not have modelling explicitly calculating the potential impact of the closures of Hunterston and Torness however we believe that nuclear power represents poor value for consumers. There remains considerable uncertainty around the economics of new nuclear generation, and the long-term storage of nuclear waste remains a difficult issue. The latest Contracts for Difference (CfD) auction delivered offshore wind at £39.65 per megawatt hour – substantially below the £92.50 awarded to Hinkley. Internal analysis tells us that in 2030 alone Hinkley could add almost £40/year to a consumer bill, whilst the equivalent offshore wind farm would reduce consumer bills by £8/year.

The Bioenergy Policy Working Group have met six times since the Bioenergy Update was published in March 2021.

As confirmed on 14 January 2022, the Scottish Government has offered financial backing of up to £80 million from the Emerging Energy Technologies Fund (EETF) to help the Scottish Cluster project accelerate its development.

As set out in our Climate Change Plan Update 2018-2032, £80 million of funding from the EETF will be directed to projects supporting the development of a carbon capture and storage (CCS) transport and storage network that will further enable negative emissions technologies (NETs) projects to develop in Scotland. This is the basis on which the figure of up to £80 million was developed.

The Scottish Government first offered this financial backing to the UK Government in a letter dated 12 October 2021 (i.e., prior to the UK Government’s announcement of Track-1 clusters on 19 October 2021) to the UK Chancellor, Rishi Sunak, and Her Majesty’s Treasury. Our offer was reiterated in a meeting between the Cabinet Secretary for Net Zero, Energy and Transport and the UK Government’s Minister for Energy, Greg Hands, on 13 January 2022.

Our offer of support was made on the basis that the Scottish Cluster is given certainty of its due status within the UK cluster sequencing process.

The Scottish Cluster demonstrated full suitability for Track-1 status based on the competition criteria, but has been designated as a ‘reserve’ cluster. Awarding the Cluster its ‘due status’ would therefore mean ensuring it can continue its development on a Track-1 timeframe.

Despite repeated requests to the UK Government from both the Cluster and Scottish Ministers, the designation of ‘reserve’ status has come with little clarity and no guarantees of future support for the Cluster. As the First Minister stated in her letter to the UK Prime Minister on 04 November 2021, this uncertainty risks delaying the delivery of crucial and strategically important projects including the decarbonisation of Scotland’s largest point industrial emitter at Grangemouth.

The Scottish Government does not hold all the necessary legislative and regulatory powers to allow us to support the Cluster alone; key levers, including access to BEIS business models, are reserved to the UK Government. Further detail on how the financial backing of up to £80 million could best be spent will therefore be determined in due course following further engagement with the UK Government on the Scottish Cluster’s status within the cluster sequencing process.

As detailed above, our offer of support has been made on multiple occasions to the UK Government. Officials also consulted with representatives of the Scottish Cluster.