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Energy Saving Trust: supporting district heating in Scotland

District heating pipes laid in a trench

Scotland aims to decarbonise its heating system by 2050. District heating, where heat is supplied from low-carbon sources via energy centres and a system of insulated pipes to homes, businesses and organisations over a local area, can play  a significant part in achieving this. Indeed, the Scottish Government’s Heat Policy Statement contains the ambition to get 40,000 homes connected to district or communal heating systems by 2020.

The potential benefits of district heat networks are varied, from reducing greenhouse gas emissions to supporting the local economy, reducing costs for businesses and tackling fuel poverty. But to get a scheme off the ground requires a lot of  support, including both development and capital funding.

Loans can help get projects off the ground

Energy Saving Trust has been running the District Heating Loan Fund on behalf of Scottish  Government since 2011, which offers low-interest unsecured loans with repayment terms of 10-15 years. Since the fund’s inception, 50 different projects across Scotland have been awarded  £15million in funding.

A range of different kinds of organisations can apply, including local authorities, housing associations, SMEs and community groups, with up to £1M+available per scheme. In addition to capital funding the District Heating team can also provide technical advice and support – always useful in tackling the project challenges which  may arise both pre-and post-commissioning.

After eight years running, it’s no surprise that a number of case studies around Scotland have come out of the scheme which highlight the kind of projects that are possible. This includes a biomass heating scheme in Wick, which incorporates 200 local people’s homes, a council building, local businesses and Caithness General Hospital. It brings an estimated £200 saving per household and plenty of reports of increased home comforts. At the side of Loch Ness, a local campsite has established itself through the installation of dual water-source heat pump and solar water heating system, which has helped revitalise the local  community.

Bigger objectives in the pipeline

There’s still a long way to go before heat networks are providing for a sizeable amount of Scotland’s heat demand, and Scottish Renewables has laid out some pointers as to possible next steps. These include an increase in ambition from small-scale to city-wide networks through a greater number of ‘anchor’ networks that can be scaled up and connected to each other. This can be done by offering exclusive concessions to developers and operators, available through tender, which would motivate long-term planning.

At a basic level, a network requires the pumping delivery of hot water through one pipe system, and the return of cold water to the energy source through another, which means there’s almost unlimited potential to scale up with additional  sources of energy generation. Aberdeen Heat and Power is a great example of just how district heating networks can increase in scope over time. There are plans to join up multiple  energy centres in the city to create a much larger heat network connecting many more customers along the way - including householders, local businesses and public buildings.

The loan scheme is not the only show in town when it comes to supporting district heat in Scotland. There’s also the Heat Network Partnership, which aims to stimulate investment in capacity-building schemes through collaboration between different agencies, as well as the Low-Carbon Infrastructure Transition Programme, which has offered support for large-scale projects which in turn help to meet government decarbonisation objectives.

Those developing a scheme in Scotland that could benefit from District Heating Loan funding can make an expression of interest online, or for more information email districtheatingloans@est.org.uk

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Gary Hartley's picture
Gary Hartley is Energy Saving Trust's expert blogger. He has extensive experience researching and writing on a number of topics, with particular expertise in sustainable energy, policy, literature and sport. As well as providing regular blog content, Gary has also been published in numerous magazines and journals.