Hansard

We are very supportive of Ofgem providing the role. Obviously, it is not within our gift to appoint a body that is constituted under a UK statute. We are seeking to work with UK ministers to get the powers so that the Scottish Parliament is able to appoint Ofgem to that role. We have had early discussions with Ofgem, and we believe that it is supportive of performing the role.

I had hoped to have a response by today, in time for the debate, but I do not, for which I apologise. I am waiting for Mr Kwarteng’s response, but I do not read anything into that—it is perhaps just a bandwidth issue. We will continue to keep the committee and Parliament updated as we progress. Meanwhile, I hope that members agree that the bill will improve the current situation by regulating the market for the first time and enabling conditions of licence and consent to be placed on operators and on individual sites.

I turn to the important issue of fuel poverty, which has rightly been raised in the committee’s report. Heat networks have an important role to play in helping to eradicate fuel poverty. The business and regulatory impact assessment that accompanies the bill notes that heat networks can provide average fuel savings of 17 per cent for households and, in the right circumstances, savings of up to 36 per cent.

I recognise that the bill does not make explicit reference to fuel poverty, but I assure members that contributing to the eradication of fuel poverty has been an absolute priority for the Scottish Government as we have developed the bill. To put that beyond all doubt, I propose to lodge amendments at stage 2 to parts 1, 2 and 3 of the bill to ensure that consideration of fuel poverty is embedded explicitly throughout the bill. My officials and I are liaising with the chair of the Scottish fuel poverty partnership forum and with Energy Action Scotland to inform those amendments. Should the bill pass, I will continue to work with fuel poverty stakeholders to ensure that the regulatory framework, as it is further developed and implemented, helps to tackle fuel poverty.

The committee has recommended that the bill include stronger provision for community engagement. I have reflected on that, and I recognise that the bill could be strengthened to ensure that the views and needs of local communities are accounted for. To ensure that local views are considered from the inception of a potential project, I will lodge an amendment at stage 2 that will require developers to provide real evidence of their engagement with local communities alongside their application for a heat network consent. As we develop subsequent regulations in that area, it will be important for us to draw on the expertise and insight of communities and organisations such as Citizens Advice Scotland, and I commit to working with them as we progress work in that area.

I note the committee’s recommendation for the balance of powers between the Scottish ministers and local government to be modified over time. As introduced, the bill makes the Scottish ministers responsible for approving new heat network developments through the consenting system. I want to be clear that that will not undermine the role of local authorities. Rather, the intention is to ensure proportionality by not requiring local authorities to take on that function at this time, while the heat network sector is still developing and when such systems will not have equal distribution across the country. The intention is also to make use of the Scottish Government’s existing capacity within the energy consents unit, which already performs a similar function in approving new renewable generation and electricity transmission projects. That will enable us to realise economies of scale and to proceed as quickly as possible in approving new schemes, in view of the global climate emergency.

The committee’s recommendation on that issue is very sensible and practical. I agree that local authorities should be empowered as far as possible, particularly in the case of heat networks, which are local assets by their nature. I will therefore lodge a Government amendment at stage 2 to enable responsibility for the award of heat network consents to be transferred to local authorities in future. However, the amendment will also allow local authorities to choose to leave the responsibility with the Scottish ministers, if that suits their circumstances.

Of course, the bill is only one part of our work to tackle fuel poverty and reduce emissions from Scotland’s homes and buildings. We have the most ambitious and comprehensive fuel poverty legislation and retrofit programmes in the UK, and we are committed to investing £1.6 billion during the next parliamentary session to expand and accelerate our heat and energy efficiency programmes as part of a green recovery.

We have already launched a £50 million green recovery low-carbon infrastructure transition programme call, and we will invest £25 million in heat networks as part of the Clyde mission. This year, we are also providing funding of £20 million to social landlords so that they can improve their properties by making them warmer and greener. Last month, in addition to opening a £4 million renewable heat cashback scheme for small and medium-sized enterprises, I announced a new £4.5 million cashback incentive to help people install renewable and energy efficiency measures in their homes.

We will shortly publish a consultation on our 2024 standard for new buildings, requiring them to use only zero-emission heat. That will open up a new market opportunity for the renewable heating sector, and will be an important step forward in encouraging the connection of new buildings to heat networks.

We will also shortly publish our heat in buildings strategy for Scotland, which will set out a vision for the roll-out of energy efficiency and heat decarbonisation in Scotland. The strategy will set out an ambitious set of new actions that will accelerate the decarbonisation of our building stock, including new commitments to support the deployment of heat networks. I encourage all members to consider that important document closely when it is published.

I hope that I have demonstrated to colleagues that the Heat Networks (Scotland) Bill will play a crucial role in our package of programmes as we take steps to ensure that Scotland’s buildings are warmer, greener and more efficient. The bill is an important step in supporting the deployment of heat networks at the scale that is needed to help us reach our net zero carbon targets. The bill will provide confidence for consumers, investors and the supply chain, creating a sustainable market for district heating, and I commend it to Parliament.

I move,

That the Parliament agrees to the general principles of the Heat Networks (Scotland) Bill.