Hansard

I again apologise, as this will be one of my lengthier contributions today.

At stage 2, the bill was amended by Mark Ruskell and Maurice Golden to include new provisions relating to heat network supply targets. Maurice Golden also inserted provision requiring the Scottish ministers to produce a heat networks delivery plan that will relate to the increased deployment and use of heat networks. In essence, those stage 2 amendments aimed to provide clear signalling to the market that is due to develop further following the establishment of a regulatory framework under the bill, and to make the Scottish ministers more accountable for the delivery of the overall aim of the bill, which is to achieve greater deployment of heat networks in Scotland.

Although I had some reservations about the evidence that was used to produce some of the targets, having discussed the matter with members, I am happy to embrace the challenge that statutory targets on heat network deployment bring. Of course, we have always had the ambition for heat networks to be deployed more significantly in Scotland, and I believe that targets will make that more certain.

To ensure that the bill is clear on that matter, it is necessary to reconcile the provisions on heat network supply targets and the heat networks delivery plan, which is why I have lodged a number of amendments that will help to achieve that.

Amendment 27 is consequential on various amendments in the group and adjusts a reference in section 39 to the heat network targets.

Amendments 37 to 39 and 42 relate to reporting requirements in the heat networks delivery plan in section 76A. Amendment 37 ties the reporting requirements in relation to heat network supply targets with the heat networks delivery plan by providing that the plan will set out how the Scottish ministers propose to meet the targets that are specified in section 76C(1). We feel that alignment of the reporting requirements, both sets of which have two-yearly reporting cycles and require reports to be laid before Parliament, will optimise the use of parliamentary time and provide a fuller picture to Parliament of the state of heat networks.

Amendment 38 provides that any report that is laid before the Scottish Parliament by the Scottish ministers following a review of the heat networks delivery plan must consider what progress has been made in meeting the targets that are specified in section 76C(1).

Amendment 42 removes subsections (2) to (4) of section 76C, which relate to the delivery plan and the reporting requirements regarding targets, as those will now be covered in section 76A.

Amendment 39 moves section 76A so that it follows section 76C, which relates to the heat network supply targets.

Amendments 40 and 41 combine existing sections 76B and 76C, which both relate to the targets, into a single section, but with some modifications. Amendment 40 leaves out section 76B and amendment 41 inserts two regulation-making powers into section 76C that are akin to the powers in section 76B. The first power allows the Scottish ministers to specify by regulations

“an additional target relating to the ... supply of thermal energy by heat networks in Scotland”,

and to

“modify any target for the time being specified”

in section 76C(1). The second power allows the Scottish ministers by regulation to make provision about targets that are specified or modified under that power.

Amendment 45 provides that regulations that specify additional targets, or which modify existing targets, will be subject to the affirmative procedure.

Amendment 49 is technical and makes a change to the long title to properly reflect the fact that the bill also sets targets relating to the supply of thermal energy by heat networks and makes provision about the delivery plan relating to the increased use of heat networks.

We feel that those changes are necessary to tidy up provisions of the bill following stage 2.

In addition, the Scottish ministers taking the power to amend the targets that are set out in the bill will ensure that, once better evidence is obtained through the upcoming national comprehensive assessment and the designation of heat network zones, future Administrations will be able to update those targets by regulation, if required, with that process being subject to the full scrutiny of Parliament. We have good reasons to believe that the potential for heat networks in Scotland is substantial and that the proposed powers will be used to ensure that we are ambitious.

Other amendments in the group have been lodged by Maurice Golden and Mark Ruskell, who engaged constructively with me and my officials prior to stage 3. Without pre-empting their input to this discussion, I would like to thank them for those contributions and offer a few comments.

Maurice Golden’s amendment 52 seeks to adjust the target for the combined supply of thermal energy by heat networks in Scotland to reach 2 terawatt hours of output by 2025 so that the target is, instead, to reach 2.6 terawatt hours of output by 2027. The regulatory system that the bill will put in place provides the structure for growth of the market to ensure that heat networks are developed in appropriate places to a high standard, and that they will provide low and zero-carbon heat to end users, and high levels of service. We anticipate that that system will be operational from 2023. Therefore, having a target that must be achieved by 2025 could carry a risk that the rapid deployment of heat networks that would be needed to meet it would result in heat networks being developed to poor standards, in inappropriate places and with no controls in place to ensure that they are low or zero carbon.

Maurice Golden’s proposed target of 2.6 terawatt hours of output by 2027, which has arisen from discussions that we have had with him and Mr Ruskell, will allow more time for the regulatory system to bed in and will ensure that the supply chain is able to develop to deliver on an important challenge. I stress that it is by no means a less ambitious target. In fact, Scotland currently has approximately 34,000 homes connected to heat networks. Alongside non-domestic connections, that amounts to 1.2 terawatt hours of existing supply. To demonstrate the scale of the challenge, we estimate that, if the deployment is linear, the equivalent of 20,000 homes will need to be connected to a heat network every year from 2021 to achieve the 2027 target that is set out in amendment 52.

To put the scale of the challenge into further context, the Queens Quay heat network in Clydebank, which currently supplies a health centre and a care home with heat that is generated from the River Clyde, hopes in time to expand to connect approximately 1,000 homes and 500,000 square feet of commercial space. The heat network at Queens Quay, which is one of the most ambitious in Scotland, has taken five years to move from concept to operation.

Heat networks are large-scale infrastructure projects and, as such, they take time to plan, develop and commission, and amendment 52 will provide more time and space to identify and develop appropriately sited low or zero-carbon heat networks. It is therefore very welcome.

Mark Ruskell’s amendments 53 and 55 make other welcome additions to the bill that will further strengthen it as we seek to achieve our 2045 net zero target. Amendment 53 seeks to place a duty on the Scottish ministers to lay, by October 2023, regulations that set an additional target relating to the output from the combined supply of thermal energy by heat networks in Scotland that must be reached by 2035. Such regulations will be subject to the affirmative procedure.

As well as enabling the Scottish ministers to take account of the best evidence that is provided by initial heat network zoning, that will provide a clear pathway to the future that will give longer-term certainty to local supply chains and drive innovation to identify and deliver further opportunities in the sector. Together with a strengthened heat network zone framework, the long-term target for which amendment 53 provides will provide a strong signal to investors and the supply chain that Scotland is a good place for their business.

To sum up, I encourage members to vote for all the amendments in the group, as they provide an ambitious but balanced commitment and signal that Scotland is serious about its commitment to provide low and zero-carbon heating to our buildings.

I move amendment 27.