by Linda Bertelsen
Scotland, by Duncan Smith

Since 1990, greenhouse gas emissions in Scotland have fallen by almost 50%, driven by the power sector. And this was just the beginning. ‘The Climate Change Act 2019′ introduced a net-zero target for all greenhouse gases in Scotland – only possible if district heating networks are being rolled out at scale now.

By Guy Milligan, Principal Consultant in Ramboll’s UK energy division. Guy leads on energy strategy and planning, guiding clients’ ambitious future energy systems and infrastructure to meet net-zero carbon targets.

District heating is a proven way of delivering efficient, low-carbon heat on a large scale, which makes it a potentially valuable contributor to Scotland’s 2045 ‘net zero’ target. As such, there has been growing interest and support in district heating from the Scottish Government. Public/private partnerships have increased, enabling the reach and scale of networks to be more ambitious and thereby increasing the level of carbon savings. This article examines policies supporting district heating in Scotland, describes the current market for district heating and the opportunity for growth, and presents some examples of pioneering low-carbon district heating projects in Scotland

Main energy source in current heat networks

Main energy source in current heat networks

10,000 homes

will be connected to heat networks – this year!

Ambitious targets require improved Scottish Government policies and strong governance to drive a rapid, sustained transformation across all sectors of the economy – not least to ensure progress for the district heating industry. Approximately 30,000 homes are connected to district or communal heating in Scotland today. Scotland has set an ambitious target to connect 10,000 more this year reaching 40,000 homes to heat networks by 2020.[1]

The road to Net-Zero is under construction

The potential for District Heating is large as penetration of DH in the UK is only 2%, and Government research suggests that 14-20% of UK heat demand could be cost-effectively met by heat networks by 2030 and 43% by 2050.

The main energy source used in UK heat networks today is gas, and it will have to shift towards zero-carbon energy sources, notably biomass, heat pumps, and industrial surplus heat recovery.

Room for Improvement

The Committee on Climate Change’s ‘Central Scenario’ suggests that heat networks can deliver up to 5.7MtCO2
emissions reduction in buildings by 2030, which represents around a six-fold increase on today’s heat networks carbon emissions savings level [2].

[1] Market Report: heat networks in the UK.  ADE (2018).
[2] Next steps for UK heat policy. Committee on Climate Change (2016).


Scottish Government policies to support Transition to Net Zero

The Energy Efficient Scotland Program, launched in 2018, aims to address heat decarbonisation under one long-term program to transform Scotland’s buildings by 2040. Included is a Heat Networks Bill and secondary legislation setting minimum energy efficiency standards for homes in the private rented sector, revised energy efficiency standards for non-domestic properties, and steps to place Local Heat and Energy Efficiency Strategies on a statutory footing. It is hoped that a combination of licensing and zoning will help to accelerate the deployment of heat networks.

Financial support to district heating under the District Heating Loan Fund since 2011 and the Low Carbon Infrastructure Transition Programme (LCITP) since 2015.

£50 million Heat Networks Early Adopter Challenge Fund for local authorities is included in the government’s 2020/21 budget.

Heat Networks (Scotland) Bill, laid before Parliament in March, aims to encourage greater deployment of heat networks.  The Bill includes requirements for operators to hold a license, which will be subject to standard conditions, including consumer protections.  License holders will have the power of compulsory land purchase and network wayleave rights, including ‘necessary wayleaves,’ allowing license holders to install and maintain heat network apparatus on any land.  Also included are powers for local authorities and the Scottish Government to designate ‘heat network zones’ where only holders of zone permits can operate.  The zones could protect license holders from the competition and thereby incentivise long-term investment decisions.

Delivery models for District Heating in practice

There is no ‘one size fits all’ delivery model for heat networks.  Their makeup and scale are influenced by local circumstances, particularly the availability of heat sources, buildings density, and composition, whilst the delivery model depends particularly on the objectives for the project, as well as the degree of control and risk appetite of the lead organisation.

Projects whose objectives involve higher levels of social benefits (i.e., fuel poverty alleviation, carbon savings, economic development) generally have stronger public leadership and control.  However, with the rapidly growing decarbonisation agenda affecting all organisations, delivery models increasingly involve public/private partnerships.  Their combined resources can greatly enhance the benefits and reach of district heating.

The following examples show differing approaches by public bodies to deliver low-carbon heat networks.

Aberdeen City Council

Council-owned energy supply company

Aberdeen Heat and Power (AH&P) was established by Aberdeen City Council in 2002 as an independent not-for-profit energy services company to deliver affordable heat and thereby help alleviate fuel poverty and reduce the Council’s carbon emissions.  Under a 50-year Framework Agreement guided by a strategic plan for district heating, the Council specifies buildings to which heat is to be delivered and appoints AH&P to procure, install, operate, and maintain district heating schemes.

Over the past 20 years, AH&P has converted 33 of 59 multi-storey residential buildings from electric to district heating.  In supplying affordable heat, tenants’ heating bills have been reduced between 20-50%, and gas-fired CHP reduced carbon by 40%.[1]  Flats are also warmer and healthier, and consequently, there are fewer tenant complaints and lower levels of turnover.  AH&P has also connected 15 public buildings and, through a for-profit subsidiary, is supplying heat and private wire electricity to non-council and non-domestic customers.

The Council’s strategic plan for district heating is to create a city-wide network where the ‘island’ network’s generation plants can supply the single network, providing greater flexibility, resilience, and operating efficiencies.  In line with the national net zero targets, the Council will introduce its first low-carbon heat source in 2022 by connecting to an energy-from-waste plant currently being constructed by Aberdeen City, Aberdeenshire, and Moray Councils in the south of the city.[2]

Fife Council

Council-owned heat network, privately owned heat generation

Fife Council has progressed heat networks under its direct ownership, with the operation contracted to third parties.  This approach has allowed the Council to progress its ambitions for decarbonisation, with two significant projects operating in Dunfermline and Glenrothes.

The Glenrothes District Heating Scheme is a partnership between Fife Council and RWE.  The Council built the heat network, supported by LCITP funds, and supplies heat to end customers.  The heat is provided by RWE’s 65MWe biomass CHP plant at Markinch, the largest of its kind in the country.

The first phase of the heat network was completed in 2019 and is focused on the area around the town centre close to the biomass plant which provides high-density building demand and anchor loads.  The intention is to expand the network in the future, with the potential to supply 24GWh/yr. of low-carbon heat to Glenrothes.

Stirling Council

Council ownership of heat network, private ownership of heat generation

Stirling Council partnered with Scottish Water Horizons (SWH) to build the first large-scale district heating project in the UK utilising low-grade heat from waste-water treatment.

The Council built the low-temperature heat network, supported by LCITP funds, and supplies heat to end customers.  Heat is provided from a newly constructed energy centre built by SWH.

The scheme was commissioned in 2019 and supplies low-carbon heat to several large public buildings including a leisure centre, a secondary school and offices, and has the capacity to expand to other areas.                                                                          


Public/private joint venture

Midlothian Council intends to build a low-carbon district heating network to supply heat to the new Shawfair town on the outskirts of Edinburgh, with heat supplied from the recently built Millerhill Recycling and Energy Recovery Centre (ERC).  The ERC is a joint project between the City of Edinburgh and Midlothian Councils. [3]

The project forms part of a wide range of projects that the Council is planning to deliver through their energy partnership with Vattenfall, announced on 11 February.[4]  The joint venture will establish an energy services company (ESCo) to deliver the projects, combining private sector expertise and capital investment with the Council playing a key role in enabling projects to come forward.  The ESCo will operate across Midlothian to deliver not only district heating but other renewable energy generation, transport and energy efficiency projects.

University campus projects

University ownership and operation, no third-party sales

Heat networks exist on many of the large university campuses in Scotland, including Edinburgh, Glasgow, St Andrews, and Strathclyde.  They have generally been developed to supply heat to their own properties and are owned and operated by in-house engineering and technical teams.

The University of St Andrews aims to become the UK’s first energy-carbon-neutral university.  The Eden Campus Biomass District Heating Scheme at Guardbridge includes a 6.5MW biomass boiler that delivers low carbon heat via 6km of district heating pipework to 17 building complexes.  Not only did the project aim to achieve carbon emissions savings, it also aimed to establish a green supply chain with local economic benefits and act as a low-carbon exemplar. 

University campuses are major heat anchors and have the potential to catalyse wider heat network expansion if they can overcome commercial, legal and technical barriers to sharing energy resources.


[1] Carbon savings from gas CHP are no longer achievable versus displaced grid electricity due to the lower carbon intensity of the grid compared with when the earlier Aberdeen gas CHP networks were installed.

[2] The NESS Energy Project.  http://www.nessenergy.co.uk/

[3] https://millerhill.fccenvironment.co.uk/

[4] http://www.midlothianview.com/news/midlothian-councils-joint-venture-with-swedish-energy-firm-vattenfall/

District heating is a key pathway for securing net zero, recognised by the Scottish Government in its Energy Strategy.  While some structural challenges remain, notably the future of the UK gas grid, the Scottish Government is implementing policies to support the expansion of district heating.  Local authorities have been pioneering low carbon networks that demonstrate alternatives to gas and gas CHP are technically viable.  With more private sector involvement in the delivery of such projects, low-carbon district heating in Scotland presents a fantastic opportunity to move into deeper decarbonisation.

For further information, please contact: Guy Milligan at guy.milligan@ramboll.co.uk.

Meet the author

Guy Milligan
Head of Department, District Energy, Ramboll
Transition to Net Zero – District Heating in Scotland” was published in Hot Cool, edition no. 1/2020. You can download the article here: