Hansard

I take this opportunity to acknowledge the hard work that has gone into the bill from our clerks and researchers, and from the external stakeholders, who have contributed to strengthening it. I also thank the minister for his collaborative approach to the bill. Although it was, fortunately, never going to be politically contentious, I believe that it has demonstrated how the Parliament is, on occasion, able to show a more positive side of politics.

I also refer members to my entry in the register of members’ interests. As I stated in the stage 1 debate, I started developing heat networks back in 2004, so it has—I assure members—been a long wait for legislative recognition of the sector. The cynicism of experience has replaced my naivety at the time in thinking that successive Scottish Governments since then would move quickly to match their rhetoric with action.

However, the principle of the bill, which is to encourage greater use of heat networks, is welcome. I hope that the bill will encourage their development when it is passed, because Scotland’s performance has been woeful, with Scotland having hit only half the target for the amount of heat that is produced by renewables.

We also welcome the provisions in the bill that address consumer protection and the wish of both the committee and the minister to use Ofgem, which is seen as the Rolls-Royce of regulation in the emerging market.

We also have no issue with the many technical definitions. Even now, however, with the bill due to be passed, I am afraid that there are still reservations—many of which are understandable, given the physical complexity of heat networks.

There will be even more responsibility on ministers to get it right, given that most enactment of the bill’s provisions will occur through the route of secondary legislation. I agree with Ombudsman Services, which flags up that consideration needs to be given to heat network customers during drafting of regulations, and of the guidance that will be needed to enact the bill. Like Ombudsman Services, we look forward to playing our part in that process.

The main area of concern, which was raised previously, is existing schemes to which the legislation will not apply. They could account for between 20,000 and 30,000 consumers. As an aside, I note that the failure to be able to identify the number accurately is also a concern that I have raised several times. That still seems to be a large discrepancy and a large number for any bill to overlook.

The minister said previously, and we accept, that proposed UK legislation will cover existing schemes. However, there is concern about whether they will be covered in the same way as the bill will cover them, and about what will happen until such UK legislation is passed.

Furthermore, many schemes continue to modify and expand. It remains unclear when such modifications or expansions will be considered to be significant enough to fall under the new licensing regime. That could give rise to a situation in which existing parts of the scheme that the bill does not cover would have to interact with parts of the scheme that future UK legislation, which is as yet unpassed, will now cover. I do not see that being resolved in the bill.

There are a couple of other points to make. The minister has heard my concerns on the supplier of last resort, and has pointed me to various parts of the bill. We will have to accept that we do not know how the provision will work in practice until it is required—which, I suggest, is not an ideal way of operating.

I have also raised specifically the problems of designating heat zones, both for operators’ sizing of equipment and building users who are forced to join a monopoly supplier, irrespective of their heat demands.

We have also raised previously the significant issues of how local authorities will resource their new heat zoning obligations with funding, and the specialist skills that are needed. Only a couple of companies with mechanical service skills carry out that work in Scotland, yet local authorities will be expected to acquire that knowledge almost overnight. The resource that is needed to create heat zones and to decide where buildings can be realistically connected is incredibly complex, so I hope that the amendments to address that issue will work in practice.

Similarly, we previously raised questions around revocation or refusal of a licence, the transfer of assets process, the valuation and compensation mechanisms and the lack of an appeals process. The concern unfortunately remains that there is not the appropriate technical and practical knowledge in the Scottish Government. That is far from satisfactory, although we will have to accept that that detail will come through secondary legislation. We hope to see the knowledge base improving.

In conclusion, I say that we welcome the bill and will support it at decision time. Whether it will achieve

“increased use of heat networks”

as set out in the minister’s final amendment today remains in doubt. I sincerely hope that the Parliament will not, in another 15 years, be debating why there has not been growth in the heat networks sector.