Heat pump proposals blasted by top ministerial advisors

Professor Griggs, chair of the Regulatory Review Group (RRG), a body re-established by the Scottish Government in October last year as part of the New Deal for Business to advise ministers on legislation.

It followed major criticisms from industry groups that the Scottish Government under former first minister Nicola Sturgeon did not take sufficient account of business interests when developing laws.

Independent advisors to government have written to Cabinet Secretary Mairi McAllan with a long list of concerns about proposals by the government to have all buildings in Scotland run by green energy by 2045.   Photo PA.

Clashes between ministers and the private sector had erupted over a range of policies including the deposit return scheme, measures to extend fishing restrictions and curbs on alcohol advertising. Ms Sturgeon's successor Humza Yousaf shelved all three.

His hard-hitting letter to Ms McAllan, sent on February 28 and published on Tuesday last week, was copied to the First Minister Humza Yousaf and his deputy Shona Robison and three junior ministers including zero carbon buildings minister Patrick Harvie.

READ MORE:  Will heat pumps plans be scaled back after concerns?

Professor Griggs pointed out that the prospective bill along with the review of energy performance certification (EPC) "have the potential to be the most significant pieces of regulatory intervention since devolution affecting every individual and business in Scotland".

And he added: "While focused on helping Scotland reach its net zero by 2045 target, the proposals contained within a Heat in Buildings Bill will have to be well developed, tested and communicated to ensure they can be successfully implemented. There are also clear economic opportunities for the Scottish economy if sequencing is clear and support for upskilling is provided."

READ MORE: Analysis: Is an SNP rebellion brewing over Harvie's heat pumps plans?

However, in a detailed letter he set out the advisors' range of major concerns.

"The RRG has significant concerns that the proposed dates for delivering a Heat in Buildings Standard across domestic and non-domestic buildings are unrealistic given that there is limited understanding of market preparedness and no formal identification of a suitable regulator," he wrote.

"The RRG requests further information on how the proposed dates have been reached and the Scottish Government’s ongoing engagement and assessment of market readiness in terms of the consumer and supply chain. 

First Minister Humza Yousaf re-established the Regulatory Review Group as part of the New Deal for Business.  Photo PA.

"For this policy to be effectively implemented, the supply chain will need to be able to satisfy consumer demand created by legislative intervention and it is unclear whether this will be the case. 

"Consumers will be vulnerable to rogue traders if there is not sufficient capacity in the market to install any new products, repair or adapt existing ones."

The Scottish Government want all buildings to be heated by green energy devices such as heat pumps by 2045.  Photo PA.

Professor Griggs went on to ask Ms McAllan for "further detail" on how the heat in buildings policy will be implemented and enforced "particularly as no regulator has yet been identified".

He also asked for details of the scale of the legislation - seeking the type, number and complexity of the properties - that will come under the prospective new law.

"Monitoring compliance of retrofitted properties will require significant regulatory resource," he warned.

Professor Griggs also told Ms McAllan that more details were needed on properties that would not be required to remove fossil fuel boilers.

READ MORE: Ministers to delay plan for heat pumps to replace boilers from 2025

He said properties exemptions would be "a public focal point and an area of potential misunderstanding and consumer confusion".

Amid concerns over costs to households and businesses, he warned that the "impact on consumers and business should be considered ahead of any proposals being finalised".

He said: "Other Scottish Government policies in development may land simultaneously and could generate high costs for consumers and businesses. 

"Small businesses that are scaling up may be penalised through the process and incur unnecessary duplicate costs."

He added that an assessment on the effect of the policy on businesses needs to take account of "the skills supply within the current market and whether it can cope with the proposed changes."

He said minsters should be engaging with landlords now given the 2028 deadline for the minimum energy standard. 

"The private rented sector who will be the first affected and required to meet a minimum energy efficiency standard by 2028 should be engaged with now to support effective implementation of this aspect," he warned.

And he called for ministers to put a plan in place to build a workforce with the skills necessary to install and repair green energy devices.

"Detail will need to be set out around how the Scottish Government will support and fund education to upskill the workforce for installation and repair of alternate heat sources, he added.

The advisors' alarm may put pressure on ministers to substantially change the proposals and perhaps push back the target dates which were described as "unrealistic".

The Herald on Sunday reveals their fears just as it emerged that submissions from industry to the consultation have warned that the proposals also risk pushing up mortgage costs, dragging property prices down and making the housing crisis worse.

Representatives of the financial, housebuilding and energy sectors have raised concerns about the plans, and said there would be a “material shock” to the housing market which would have wider economic implications, The Times reported yesterday.

The long-awaited consultation on the bill published in November last year proposed that by 2028 work would be required to be underway to remove gas and oil boilers from all buildings and that none should be heated in this way by 2045 - when Scotland is due to become net zero in law.

The 2021 Heat in Buildings Strategy stated: "We must rapidly scale up deployment of zero emissions heating systems so that by 2030 over 1 million homes...are converted to zero emissions heat."

Mr Harvie dropped this target when he unveiled the draft strategy last November. The Heat in Buildings Strategy in 2021 estimated that undertaking energy efficiency upgrades and installing low carbon heating systems in homes and non domestic buildings could cost around £33 billion over the period to 2045. However it is not clear how it will be paid for.

The consultation published last November, also said private rented homes should meet minimum energy efficiency standards (MEES) by 2028, while owner occupied homes by 2033. It said these should be achieved by improving the insulation of walls, windows, roof, or floor – of a property.

However, it is unclear whether all properties will need to replace their gas and oil boilers with heat pumps or other green energy heating appliances and what the cost to individual households will be.

Several SNP MSPs told Holyrood in November that many people living in Scotland's towns and cities would have their homes heated through district heating systems.

Mr Harvie last year told BBC Scotland that people living in urban areas would have access to district heating systems suggesting that this may be a more likely form of energy supply than individual heat pumps for individual homes.

READ MORE: People in towns and cities will not have to install heat pumps

Speaking on BBC Scotland's Sunday Show he was asked by presenter Martin Geissler, who said he lived in a home off the mains gas supply, whether he should install a heat pump.

Mr Harvie replied: "You should certainly be looking at all the options. And in some parts of Scotland one of the options will [be to] wait for a heat network to be built in your community as well. Particularly if you live in some of the denser urban parts of Scotland, that is going to be a more likely solution than a house by house or flat by flat approach."

The RRG's remit is to examine and identify implementation challenges and appropriate mitigations of regulation. 

Its members include representatives from the Scottish Retail Consortium, the Convention of Scottish Local Authorities, the Association of Chartered Certified Accountants and Consumer Scotland.

The RRG consider upcoming regulatory developments and as part of its work programme identified Heat in Buildings Bill proposals as a scrutiny priority.

The RRG’s say its objectives are to:
1. Work constructively with the Scottish Government to ensure that policy officials and ministers are sighted on implementation challenges early.
2. Deliver written and verbal advice to the Scottish Government, drawing upon extensive expert insight from business and regulators across Scotland.
3. Support the delivery of the New Deal for Business by ensuring that the potential barriers to the success of Scottish Government policies are removed.

Scottish Conservative Shadow Cabinet Secretary for Net Zero, Energy and Transport Douglas Lumsden said: "SNP-Green ministers cannot continue to bury their heads in the sand over their unrealistic heat pump plans.

“The half-baked plans – being pushed by Patrick Harvie – means hard-pressed households are going to have foot the bill as he refuses to listen to concerns over his proposals.

“His colleague Mairi McAllan who has taken on the energy brief cannot take a similar attitude.

“If she does – and ignores the recommendations from independent advisers – then the public will feel that they are implementing these plans to suit their own agenda.”

A Scottish Government spokesperson said: “We are committed to a Heat in Buildings Bill that will dramatically increase how quickly Scotland moves to clean heat, so that we tackle climate change and ensure everyone in Scotland has a warm, affordable home to live in.

“As part of delivering a New Deal for Business, Scottish Ministers asked the Regulatory Review Group to examine the business and regulation impact of our proposals. We welcome the independent views of the Group along with all submissions to the consultation, and we will give a full response as we develop our final proposals.”