The Heat Networks (Scotland) Act 2021 defines a heat network as either i) a district heat network, which is “a network by which thermal energy is distributed from one or more sources of production to more than one building”; or ii) a communal heating system, which is “a system by which thermal energy is distributed from one or more sources of production to one building comprising more than one building unit”.
Scotland’s Heat Network Support Unit (HNSU) will focus support on the development of new low or zero emission heat network projects. Communal heating systems or the decarbonisation of existing fossil fuelled heat networks are excluded. Support for expansion of existing heat networks will be considered on a case-by-case basis.
Proposals are welcome from new low or zero emission heat network projects. They must be able to evidence:
- a lead organisation identified, with an identified lead officer(s), and evidence of organisational commitment to developing the opportunity;
- project location, i.e. a project layout; and
- heat off-taker(s) and potential anchor loads identified.
It is anticipated that eligible projects will demonstrate the following qualities:
- ability to demonstrate compatibility with Scotland’s Heat in Buildings Strategy and the relevant local authority’s Local Heat and Energy Efficiency Strategy (LHEES);
- ability to demonstrate a contribution to delivery of ambitions to decarbonise Scotland’s heat demand;
- the potential to have a positive and significant social and economic impact on Scotland;
- ability to demonstrate additionality and the need for grant support from the Heat Network Support Unit, including clear evidence of the funding gap to develop the project to the relevant next stage;
- ability to demonstrate organisational commitment to the project at senior level
- ability to demonstrate organisational commitment to the Fair Work criteria.
- the potential to have a positive and significant impact on skills and supply chain in Scotland; and
- has a high-level plan for dissemination of learning points to support standardisation / replication and other project development proposals.
Desirable criteria that may have the potential to be demonstrated by eligible projects:
- ability to provide confirmation of other sources of funding/finance that will contribute towards the final delivery costs of the project;
- demonstrate clear plans for community and consumer engagement; and
- demonstrate a potential for replication and an intended route to commercialisation [should demonstration prove successful or a plan for integration into business as usual].
Stage Specific Criteria
- Alignment with the relevant local authority’s LHEES (if applicable) and/or the local authority’s heat network ambitions
- The project is a designated heat network zone, as stipulated in Part 3 of the Heat Networks (Scotland) Act (if applicable)
- Alignment with any areas that have been subject to review (in accordance with Section 47 of the Heat Networks (Scotland) Act) and that were considered particularly suitable for the construction and operation of a heat network, but were not taken forward by the local authority for designation (if applicable)
- Provision of completed appraisal form
- Funding for detailed feasibility study can be up to 100% of project costs up to a maximum of £50,000.
Outline Business Case (DPD)
- evidence of the ability to secure other sources of funding/finance that make a minimum of 50% contribution towards the project’s initial capital costs;
- provision of feasibility study with recommended option that the project is financially viable and technically feasible; and
- ability to demonstrate that the project will provide heat at an affordable cost to consumers and support the alleviation of fuel poverty (if applicable)