Hansard

I am delighted to have the opportunity to address members on the Heat Networks (Scotland) Bill. I am also delighted that we have reached this stage, after many years of preparation and extensive stakeholder engagement.

Before I talk about the bill itself, I think that it is important to place in context the work that we are doing here. The bill, complex though it is, is crucial to Scotland’s response to the global climate emergency. The way in which we heat our buildings currently accounts for around 21 per cent of Scotland’s total greenhouse gas emissions; it is the third largest source of emissions across the economy. However, it is a particularly challenging area to address. As the committee recognised at stage 1, public awareness is key in the transition to renewable heating. Indeed, recent research found that many members of the public simply do not associate the incumbent fossil-fuel heating systems with climate change.

The scourge of fuel poverty notwithstanding, the natural gas that serves the great majority of our buildings is relatively low cost in comparison with the costs of renewable heating. However, we cannot tolerate the status quo any longer: we urgently need transformational change. In the draft heat in buildings strategy that the Scottish Government published earlier this month, we set out our ambition to move 1 million homes to renewable and low-carbon heating by 2030. Heat networks will have a strong role—perhaps the predominant role—to play in achieving that.

As was mentioned earlier, only an estimated 34,000 homes are currently connected to heat networks, so we know that growth in the sector will have to accelerate significantly over the next few years. That, in essence, is why we need the bill.

In simple terms, a heat network is a distribution system of insulated pipes that carry hot water or steam from a central source and deliver it to our homes and businesses. Heat networks are generally more efficient than individual gas boilers, and they can be run from a wide range of renewable and low-carbon sources. That includes large-scale heat pumps, which extract heat from our rivers, or even waste heat recovered from industrial processes. In the right circumstances, heat networks provide households with average fuel savings of 17 per cent.

Heat networks have health and safety benefits, as there is no need for any combustion, with its consequential carbon monoxide risk, to take place inside the building. As heat networks are long-lived assets, they create long-term local jobs in maintenance and administration.

The overall aim of the bill is to accelerate the development of heat networks in Scotland, which will in turn drive down emissions and tackle fuel poverty.

The bill seeks, first, to increase public confidence in heat networks by creating a new licensing regime to ensure that operators are solvent and fit and proper, as well as driving up standards across the sector. The bill introduces a new consenting system to ensure that new networks are developed where they will have the most benefit and that they are tailored to the needs of an area. The bill will put in place arrangements to protect network users by enabling a transfer of operational rights to ensure sustained supply.

Secondly, the bill supports the commercial case for new heat networks by reducing the costs of construction and levelling the playing field with other utilities through the creation of new rights for heat network developers and operators and by identifying the most optimal zones for heat networks and awarding them for development through a competitive process.

I emphasise the positive and constructive role that members of the Economy, Energy and Fair Work Committee and other members have played in the process of strengthening the bill. I believe that, because of that input, the bill is stronger and better than it would otherwise have been. That input is responsible for new provisions that were introduced at stage 2, such as having clear targets for the supply of heat via heat networks, which provides a clear signal to investors and supply chains about Scotland’s intent in the sector, regardless of the composition of future Administrations. There are also new provisions on the publication of a heat networks delivery plan, which will set out how the Scottish Government intends to meet the targets and which will be subject to the scrutiny of Parliament. I welcome those additions and have supported them, as well as the new provisions that allow responsibility for the award of heat network consents to be transferred to local authorities in the future. I am grateful to the members who lodged those amendments for their pragmatism and flexibility, particularly on the setting of targets.

I also acknowledge the constructive discussions that I have had with members on ensuring connections of buildings. I particularly acknowledge Teach the Future’s input on the connection of educational buildings to heat networks—a point that Liam McArthur raised at stage 2. I agree that that could unlock even more investment. Although we have not made specific provision in the bill to that end, our heat in buildings strategy contains a commitment to detailed consultation on the matter for a wide range of non-domestic buildings, not only those in the educational estate.

Fuel poverty has rightly been raised by several members during the bill’s journey. I reiterate that ensuring that the bill contributes to the eradication of fuel poverty has been, and continues to be, an absolute priority for the Scottish Government. For that reason, and following feedback from the committee at stage 1, I have ensured that consideration of fuel poverty is embedded throughout the regulatory framework. Should the bill pass today, as I hope it will, we will continue to engage with fuel poverty stakeholders to ensure that we reflect their priorities as we move to implement the necessary regulations. The stronger provisions that are now included on community engagement will help in that regard, and I reiterate that we envisage working with Citizens Advice Scotland in developing the regulations, should the bill pass.

I emphasise that the Heat Networks (Scotland) Bill as it now stands is the product of a significant team effort across Government and Parliament. I look forward to hearing members’ views in the debate. I am particularly grateful to my bill team, who have done an exceptional job throughout, as has been acknowledged by members across the chamber. Many colleagues will not know that this has been the first bill for many of the bill team, so I congratulate them on an exceptional effort. I am also very grateful to all colleagues, parliamentary staff and stakeholders for helping us to put the bill together, and I believe that the bill is stronger for their contribution. I hope that they are proud that we have reached this stage today.

I believe that the bill is a very important step in providing Scotland with the warmer, greener and more efficient buildings that we need in order to combat climate change, tackle fuel poverty and live healthier and more comfortable lives.

I move,

That the Parliament agrees that the Heat Networks (Scotland) Bill be passed.