Scotland’s heat network licencing regime to be streamlined

The Scottish Government has launched a new consultation on plans to introduce new licensing for network operators, allowing them rights and access to land and to carry out roadworks for installing the pipework and apparatus needed for installation.

Holyrood originally passed its Heat Networks (Scotland) Act in 2021, the first such piece of legislation in the UK, with two aspects of it – public sector requirements for building assessment reports, and heat network zone designations – going live in May 2023.

Legislation from the UK government under the 2023 Energy Act has however overtaken implementation of parts of the Scottish rules, in part leading to the Scottish administration launching its consultation over how to streamline the existing regulatory framework, with the introduction of opt-in licences for maintenance and installation in Scotland.

Graham Wallace, an energy infrastructure expert with Pinsent Masons in Glasgow, said the proposals would start to bring the heat network industry onto a level with other utility operators.

“The proposals will undoubtedly be welcomed by heat network operators in particular, who have been disadvantaged in comparison to other utilities for some time,” he said.

“The licences are "opt-in" which should mean that the associated bureaucracy will be proportionate to each case. It is good news that the regime is being fitted around the UK approach, to minimise duplication and reducing barriers to deployment in Scotland, but the issue is that - even with a fair wind - the licensing regime is unlikely to be in place until late 2027.”

Currently, heat network organisations are limited in their statuory rights compared to gas and electricity providers, which has created additional challenges to the growth of the heat sector in Scotland.

Mairi McAllan, the Scottish cabinet secretary for housing, said the consultation was aimed at opening up development opportunities.

“The proposals in this consultation are designed to strike the right balance by targeting rights and powers where they are needed without duplicating regulation,” she said in the consultation’s foreword.