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Between 2021 and 2024, expenditure under the Heat in Buildings Programme totalled £493m. The annual spend is as follows:

The Green Heat Finance Taskforce is currently finalising its Part 2 report and will publish it in early 2025.

Our progress report highlighted gaps in data that made reporting on some areas challenging, particularly heat networks and non-domestic properties.

The Scottish Climate Survey is gathering data on public awareness and understanding of a variety of climate-related topics, including the heat transition. Data collection began in October 2024 and is continuing until January 2025. A report of findings is expected to be published by April 2025.

With the introduction of a new heat network authorisation and consumer protection regime being developed under the Energy Act 2023, my officials have focused their efforts on engaging with the UK Department for Energy Security and Net Zero and Ofgem regarding the data that will be collected as part of this new regime and the system that will be used to collect it. Ofgem has recently published the Heat networks regulation: authorisation and regulatory oversight consultation which provides details on the registration and monitoring. Both processes will provide valuable data on heat networks.

We expect that the quality of data from the new regime will be significantly better than that submitted as Heat Networks Metering and Billing Regulations 2014 (HNMBR) notifications, for a number of reasons, including that Ofgem is developing a dedicated digital platform so that regulated entities can engage with Ofgem supporting the processes of Registration, Authorisation Application and reporting for monitoring.

The date for heat networks regulation taking effect has been confirmed as 1 April 2025 in the Heat Networks (Market Framework) (Great Britain) Regulations 2025 Statutory Instrument (SI) 2025, laid in the UK Parliament on 28 November 2024, with later commencement dates for some of the regulations within the SI.

The Heat networks regulation: authorisation and regulatory oversight consultation can be accessed at the following address: Heat networks regulation: authorisation and regulatory oversight.

The Scottish Government has allocated £1.3 billion through its Heat in Building Programmes in this Parliamentary Session, investment it is committed to continuing in 2025-26 with over £300 million capital funding allocated in the draft budget. However, the Scottish Government cannot finance the transition alone and established the independent Green Heat Finance Taskforce with a remit to explore how to attract greater private finance to support the clean heat transition.

The Scottish Government is engaging with lenders and the wider finance sector as it considers the Taskforce’s Part 1 report and, following its Part 2 report, will formally respond identifying which recommendations across both Taskforce reports will be prioritised and how we will take forward action in partnership with others.

Work is underway to review and allocate the budget across the schemes funded through the Heat in Buildings programme. The allocations will be submitted for review to the Cabinet Secretary for Net Zero and Energy early in the new year.

With the draft 25-26 budget allocation, the total allocation for Heat in Buildings within this parliamentary session is £1.7bn.

The Green Heat Finance Taskforce met on 16 July 2024 and 9 October 2024. The Taskforce’s next meeting is scheduled for 15 January 2025 when it will seek to finalise its Part 2 report.

The Green Heat Finance Taskforce’s Part 1 report identified a range of finance mechanisms that could be expanded or developed to support individual property owners finance the upfront costs of installing clean heat and energy efficiency measures. These included approaches to encourage greater secured lending, developing equity release products focused on retrofit and exploring the potential to offer property linked finance in Scotland.

Its Part 2 report will cover financing place-based and social housing retrofit programmes as well as financing of heat networks. The report will focus on how to attract private investment at scale to unlock blended finance opportunities, combining public and private contributions, to deliver coordinated activity across multiple properties.