Renewable Heat Action Plan for Scotland: a plan for the promotion of the use of heat from renewable sources

Listen

SECTION 2: PURPOSE AND STRATEGIC CONTEXT

This section sets out:

  • Purpose
  • Strategic Context
  • Related Energy Policy
  • Environmental Impacts
  • UK Context

Purpose

2.1 This Action Plan seeks to promote the growth of the sector in advance of the main market mechanism, the UK wide Renewable Heat Incentive ( RHI) which is due to launch in April 2011. It sets out a framework for activity, across a wide range of areas, which will contribute to meeting our 2020 heat target. Specifically it will:

  • Give an overview of current position and where we need to get too
  • Identify what needs to happen and by when to achieve targets
  • Identify indicative milestone ambitions to 2020
  • Focus on actions needed in the short-term (over the next 24 months)

2.2 Renewable heat is rightly in the spotlight and will play a key role in helping to address both climate change and renewable energy ambitions. Scotland is starting from a very low base, currently around 1.4% of our heat usage is from renewable sources. We cannot shy away from the scale of the challenge ahead and must make significant progress over the next few years.

2.3 A refreshed Steering Group has been established, chaired by an industry representative to oversee implementation of the Action Plan.

Strategic Context

Climate Change

2.4 The imperative for action to address climate change is driving policy development across a number of fronts. The Climate Change (Scotland) Act 20091 sets a target to reduce greenhouse gas emissions by at least 80% by 2050. The Act also sets an interim target of a reduction of at least 42% by 2020 and requires the Scottish Ministers to seek expert advice on what the highest achievable 2020 target is. The country is set for decades of unprecedented activity in this sphere.

2.5 The Climate Change Delivery Plan2 sets out strategic options for delivering future emissions cuts. It identifies 4 transformational outcomes which will need to be substantially delivered by 2030 to put Scotland on the correct pathway to meet the 2050 target. One of these outcomes relates to renewable heat:

  • A largely de-carbonised heat sector by 2050 with significant progress by 2030 through a combination of reduced demand and energy efficiency, together with a massive increase in the use of renewable or low carbon heating.

2.6 A Report on Proposals and Policies, as required by the Climate Change (Scotland) Act, will set out what we are going to do to achieve a series of annual emissions reduction targets up to 2022. The report must be published as soon as reasonably practicable after the annual targets are set (which must be done by 1 June 2010), and will be informed by this Action Plan.

2.7 The Climate Change (Scotland) Act also requires Scottish Ministers to report annually to the Scottish Parliament on Scotland's emissions and on the progress being made towards the emissions reductions. The first report on the 2010 target will be published in 2012. The emissions reductions which this Action Plan will contribute towards will be reflected in those reports.

Energy Pledges

2.8 Alongside the ambitious emissions reduction targets, Scottish Ministers have made a commitment to delivering 10 Energy Pledges which will be a key driver to meeting Scotland's target of 20% of total energy use from renewable sources by 2020. To assist in reaching this target, it is proposed that 11% of heat use will be from renewable sources. Section 4 will consider in more detail how the target will be achieved.

Energy Pledge 2 states:

  • We will aim to build a commercially viable, diverse renewable heat sector in Scotland to deliver benefits to the wider public, through the implementation of our Renewable Heat Action Plan. This commitment is reflected in the Climate Change (Scotland) Act which requires the Scottish Ministers to produce and publish a plan for the promotion of the use of heat from renewable sources.

Related Energy Policy

2.9 This Action Plan should not be viewed in isolation. It continues and builds on previous Scottish Government funding and support to the sector. In particular:

Funding

  • 6.6 million of grants awarded under the Scottish Biomass Support Scheme (2007/08) to support the transformation of the woodfuel sector in Scotland
  • Launched a new scheme in December 2008 to support biomass heat only projects worth £3.3 million.
  • RSA support of £8.1 million to Tullis Russell, Glenrothes towards a CHP biomass plant.
  • RSA support of £10 million to UPM, Irvine towards CHP biomass plant

2.10 The earlier work undertaken by FREDS Renewable Heat Group which reported to Scottish Ministers in February 2008. The report made 23 recommendations ranging from setting a target to a review of financial incentives. The Scottish Government responded to that report in October 2008 as part of the consultation on a Framework for the development and deployment of renewables in Scotland3.

Progress to date includes:

  • Scottish Ministers have agreed formally with UK Ministers that they are to be consulted on the introduction of the RHI,
  • Banded Renewables Obligation (Scotland) came into force as from April 2009,
  • Scottish Government has a secondee from EU skills working as part of the Renewables team to ensure, and
  • Air source heat pumps now eligible under the Energy Assistance Package in off-gas grid areas.

2.11 A full summary of progress is at Annex A. This work will be taken forward as part of this Action Plan.

2.12 In addition, it complements other related energy work currently being taken forward to put Scotland at the heart of Europe's low carbon energy revolution, including:

  • TheRenewables Action Plan4 which identifies collective actions by Government, its agencies and partners, to ensure at least 20% of Scotland's energy comes from renewables by 2020. the routemaps for renewable heat and bioenergy in the RAP together can be read as a summary of this Action Plan.
  • The Energy Efficiency Action Plan which is due to be published spring 2010 will identify indicative energy savings, activities and actions needed from different sectors to contribute towards green house gas reductions. It will consider the role and place of low carbon equipment in the built environment for both heat and electricity generation and waste heat from non renewable sources for district heating. 'Conserve and Save: Consultation on the Energy Efficiency Action Plan for Scotland'5 was published on 8 October 2009 and will form the basis of the Action Plan.

Environmental Impacts

2.13 An Environmental Report was published alongside the Renewables Action Plan ( RAP) as part of the Strategic Environmental Assessment ( SEA)6 process. Initial assessment of the RAP concluded that the Environmental Report should focus on renewable heat due to the shift in policy in this area and the introduction of a renewable heat target. The recommendations in the report, coupled with the responses from the subsequent consultation process, were taken into consideration when designing our mitigation and monitoring framework as part of the environmental impacts detailed in Section 6 of this Action Plan.

UK context

2.14 The Scottish Government is working with the UK Government to play its part in meeting the EU Renewable Energy Directive which has recently been adopted. The directive requires the UK to achieve 15% of energy use from renewable sources by 2020. Scotland, in setting a 20% target, has aimed proportionally higher than the required contribution for the UK as a whole.

2.15 The UK Government are taking steps to introduce a UK wide financial mechanism to help support the take-up of renewable heat. The UK Energy Act includes enabling powers to design such a mechanism. Renewable heat is a mixture of devolved and reserved provisions (while Scottish Ministers have powers to promote renewable heat, any regulatory incentive administered by Ofgem will cut across reserved functions). Scottish Ministers have agreed with the UK Government that Westminster can legislate on their behalf in terms of the renewable heat incentive ( RHI) but that Scottish Ministers will be consulted on its introduction to ensure specific Scottish interests are taken into account in the design of the scheme. The initial consultation on this incentive will take place towards the end of 2009.

2.16 This Action Plan will focus on those areas where Scottish Ministers have devolved powers, such as, skills needs, consumer information and heat mapping at a local authority level, all of which will complement the RHI to be introduced across the UK. The RHI is seen as the main mechanism to accelerate the rapid growth needed to reach the Scottish, UK and EU renewable energy targets.