Low-carbon Heating And The Heat Networks (Scotland) Act

• Published date: 14 July 2021
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Oil, Gas & Electricity
• Law Firm: Shepherd and Wedderburn LLP
• Author: Ms Judith Stephenson

The built environment contributes 20% of the nation's greenhouse gas emissions, making it a key player in tackling the ambitious challenges we face on the journey to a low or net zero society.

How we heat (and cool) our buildings is a crucial element in reducing carbon emissions. But there is no single answer that will deliver the required emissions reductions to achieve government targets. Location, along with available stock and infrastructure, will determine the best combination of solutions in different areas, and a variety of distribution, generation and resource options are available. District heating and heat networks have a big part to play in cutting carbon emissions, but we are still far from a fully joined-up strategy that provides a clear path for individuals and organisations to follow.

Regulating heat networks

The Scottish Government has taken a step towards a comprehensive strategy, with the passing of the Heat Networks (Scotland) Act 2021. The Act (still to be brought into force) sets up a regulatory and licensing system for district and communal heating, with the aim of accelerating its use in Scotland.The Scottish Government's aim is that low carbon technologies such as heat networks will supply heat to 35% of domestic and 70% of non-domestic buildings by 2032.

What are heat networks?

Instead of providing individual systems within buildings to heat water and provide space heating, heat networks are centralised sources of energy that deliver heat to buildings, in the form of hot water or steam, through an infrastructure of insulated pipes. Heat networks can use a variety of heat sources such as combined heat and power (CHP), gas boiler, renewables and recovered waste, and are often more efficient than individual fossil fuel heating systems. Heat sources can be changed at the centralised energy centre to better align with climate change targets, without having to disrupt the heat users. This is in contrast to the disruption it would cause a property owner if, for example, they wished to change the heating system in their property from gas to a biomass or geothermal system.

Duties of operators under the Heat Networks (Scotland) Act 2021

There are already more than 830 heat networks in Scotland, but so far the sector has been unregulated. The regime set up by the Act will provide greater consumer protection, by requiring operators to:

• have a licence before they can set up a heat network;
• apply for consent to develop a new heat network or...