Local Heat and Energy Efficiency Strategy

August 2024

www.orkney.gov.uk

IMAGE: The cover shows the Orkney Islands Council crest above an aerial view of an Orkney settlement, harbour and surrounding landscape. The title “Local Heat and Energy Efficiency Strategy” and the date “August 2024” appear over the photograph, with “www.orkney.gov.uk” at the bottom.

Table of contents

1. Executive summary
2. What is a Local Heat and Energy Efficiency Strategy?
3. Policies and progress to net zero
4. Stakeholder engagement
5. Baselining: Heat and energy efficiency in the Council
6. Priority A: Making Orkney’s homes energy efficient
7. Priority B: Alleviating fuel poverty
8. Priority C: Improving carbon efficiency in council buildings
9. Priority D: Exploring heat networks for Council buildings
10. Challenges
11. Opportunities for Orkney Islands Council
12. Next steps
13. Glossary
14. Appendix
15. Appendix A: Additional national policy drivers
16. Appendix B: Datasets used in the development of this LHEES
17. Appendix C: Datasets and Limitations of the LHEES approach
18. Appendix D: LHEES stage descriptions
19. Appendix E: Deviations from standard LHEES methodology
20. Appendix F: Detailed methodology for the identification of potential heat network zones

Executive summary

Orkney Islands Council’s Local Heat and Energy Efficiency Strategy (LHEES) sets out how to tackle greenhouse gas emissions from buildings, whilst also improving residents’ quality of life by minimising poor energy efficiency as a driver of fuel poverty. Orkney Islands Council, and Scotland as a whole, will be net zero by 2045. This is a challenging target and the LHEES is a key step in planning our approach to achieving this goal.

What is a Local Heat and Energy Efficiency Strategy?

The LHEES is made of two documents: the LHEES Strategy and the LHEES Delivery Plan. The LHEES Strategy is a long-term strategic framework for decarbonising heat in buildings and improving energy efficiency across Orkney. It is published alongside the LHEES Delivery Plan, which sets out how Orkney Islands Council will implement the Strategy over the next five years.

Orkney Islands Council’s LHEES will support the delivery of the Council’s goals of improving energy efficiency, reducing fuel poverty, and decreasing carbon emissions through zero direct emissions heating systems. The Council will use the LHEES to coordinate and focus energy efficiency and heat decarbonisation work, including heat networks, across Orkney.

The LHEES has been developed in accordance with the Scottish Government’s methodology. This consists of 8 stages which bring together:

• The Council’s existing goals and strategies
• Data analysis of the building stock
• Input from different stakeholder groups

Overall, the content of Orkney Islands Council’s LHEES has been informed primarily through a data-driven approach, using a number of datasets and proxy indicators.

Local authority’s LHEES priorities

The Council has identified four priorities for the LHEES:

• Priority A: Making Orkney’s homes energy efficient
• Priority B: Removing energy efficiency as a driver of fuel poverty
• Priority C: Improving carbon efficiency of non-domestic Council buildings
• Priority D: Exploring heat networks for non-domestic Council buildings

Heat and energy efficiency in Scotland

In 2018 the Intergovernmental Panel on Climate Change (IPCC) advised that in order to reach the 1.5°C target set in the Paris Climate Accord, the world needs to reach net zero carbon emissions by 2050. The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 then set an ambitious target for Scotland to reach net zero by 2045. Achieving net zero is crucial to mitigating the worst impacts of climate change and stabilising global temperatures.

The way we heat our homes, workplaces and other buildings is changing. Some improvements have been carried out to homes already under programmes such as Area Based Schemes and the Energy Company Obligation (ECO). The LHEES will support the Council and its community planning partners to scale up and align existing programmes, and to increase the scale and pace of retrofit and heat network development that is needed to meet the national target of net zero by 2045.

The Sustainable Development and Climate Change Strategy covers the actions the Council will take to tackle climate change. The Council’s Corporate Plan, Connect, highlights the work required to develop local solutions to protect nature and to take action on climate change. The Local Housing Strategy outlines actions to make housing in Orkney more sustainable and improve energy efficiency, while ensuring that more of the energy used comes from low carbon and renewable sources.

Orkney housing stock

A baselining exercise has been carried out to highlight key characteristics within the housing stock across Orkney. This will facilitate benchmarking in future iterations of LHEES and enable the evaluation of progress towards targets, including the ultimate target of net zero by 2045. It also highlights some of the opportunities for how and where the Council can target interventions to achieve the greatest impact.

Domestic properties

• Domestic properties in Orkney have a wide range of construction types, with no single dominating archetype. 37% are solid brick or stone, 32% are timber frame, and 27% are cavity wall construction.
• Fuel poverty rates in Orkney are very high, at 31% according to the 2017-19 Scottish House Condition Survey, compared to the national average of 24% in the same period.
• Most homes are heated with electricity or oil.
• The Council owns only 7% of properties. To reach net zero, the Council will need to work with Orkney Housing Association Limited (OHAL), owner occupiers and private rent landlords.

Non-domestic properties

• Non-domestic properties use 25% of the energy used for heat across Orkney.
• The non-domestic properties with the highest heat demand are retail buildings, hotels, and storage and distribution buildings.
• Like domestic properties, almost all non-domestic properties are heated with either electricity or oil.
• The Council has explored several heat network options but has not yet identified any suitable opportunities. The Council is now exploring heat network options for non-domestic buildings owned by the Council.

Orkney Islands Council’s heat networks

Heat networks have been identified as a low regret¹ decarbonisation option in the Scottish Government’s Heat in Buildings Strategy. The Council has carried out data-driven analysis to highlight potential areas for future heat network development, including new build developments. The Council has identified four areas in which to explore potential heat networks:

• Central Kirkwall
• West Kirkwall
• Stromness
• Dounby

Beyond the page: making the LHEES Strategy a reality

This Strategy outlines a number of challenges which must be overcome in order to decarbonise buildings across Orkney. These include:

• Challenges associated with different tenure types (owner occupied, private rented, social housing, mixed tenure buildings)
• Orkney’s exposed climate and geography
• High upfront capital cost of retrofitting and the high cost of surveying
• Orkney’s unique mixture of bespoke property types
• Issues with funding timelines and requirements
• Skills gap and other local supply chain challenges for retrofit measures
• Poor data on non-domestic buildings
• Challenges for developing heat networks

Not all of these challenges can be addressed in the first iteration of LHEES, or the first Delivery Plan. For this reason, the LHEES will be an iterative Strategy. The regulatory landscape will change quickly over the next few years in order to drive progress in building decarbonisation in Scotland². The LHEES Strategy and Delivery Plan will both be reviewed annually, and if necessary revised to react to legislative and market changes and to benefit from new opportunities that arise.

¹ Low-regret decisions are actions that are cost-effective now and provide options and flexibility in the future, rather than limiting options.

² For example, the Scottish Government’s proposed Heat in Buildings Bill and the Social Housing Net Zero Standard, or the UK Government’s Review of Electricity Market Arrangements.

What is a Local Heat and Energy Efficiency Strategy?

Purpose

Scottish local authorities have a statutory duty to develop a Local Heat and Energy Efficiency Strategy (LHEES) by 31st December 2023. This duty is described in the Local Heat and Energy Efficiency Strategies (Scotland) Order 2022.³

LHEES is the principal mechanism for locally led heat planning across Scotland’s local authorities. The strategies set out the long-term plan for decarbonising heat in buildings and improving energy efficiency across an entire local authority. The focus on locally led planning is to ensure that the decarbonisation of heat in buildings is delivered in a way that is relevant to the local context and tailored to the specific needs of communities.

The purpose of this LHEES is to present the evidence base for identifying the necessary upgrades to buildings and local infrastructure required across Orkney by 2045, to fulfil the Scottish Government’s objectives and local priorities related to heat in buildings. The interventions will occur at the building level and through the use of heat networks.

Orkney Islands Council’s LHEES will support the delivery of the Council’s goals of improving energy efficiency, reducing fuel poverty, and decreasing carbon emissions with zero direct emissions heating systems. The Council will use the LHEES to demonstrate and coordinate the wide variety of energy efficiency and decarbonised heating projects in Orkney and provide a vision for the energy transition across the area.

Structure

LHEES has a two-part structure, consisting of a Strategy and a Delivery Plan:

• The LHEES Strategy is a long-term strategic framework over the next 15-20 years for decarbonising heat in buildings and improving energy efficiency across Orkney, framed around the six LHEES considerations outlined below in Table 1.
• The LHEES Delivery Plan sets out how the Council will implement the Strategy over the next five years. It enables the Council to work towards the delivery of the changes identified in the Strategy and clarifies the role and responsibilities of stakeholders.

This document contains Orkney Islands Council’s LHEES Strategy. The accompanying Delivery Plan can be found on the Council’s website. Both documents will be reviewed and updated periodically to reflect progress towards net zero, new available technologies and funding, and changing priorities in the local authority.

LHEES guidance from Scottish Government

The national LHEES guidance focuses on six considerations relating to heat decarbonisation and energy efficiency. They are used to identify and target interventions in different parts of the building stock. The six considerations are outlined in Table 1.

The considerations for heat decarbonisation are grouped around whether buildings are on- or off- the mains gas grid, and if they are in areas with the potential to develop heat networks. Considerations relating to energy efficiency and other outcomes focus on areas with poor building energy efficiency, such as no or low levels of insulation, and areas where this is likely to contribute to high levels fuel poverty. This focus is to ensure that energy efficiency projects will reduce fuel poverty. Mixed-tenure, mixed-use, and historic buildings are included as separate considerations, as these are likely to require different approaches.

Table 1: Summary of the LHEES considerations

LHEES stages

This LHEES has been developed over eight stages, as outlined in Figure 1. The completion of stages 1-6 provided the data analysis and evidence base which forms the foundation for Orkney Islands Council’s LHEES Strategy (Stage 7) and Delivery Plan (Stage 8).

IMAGE: Figure 1 shows the eight LHEES methodology stages. Stages 1 to 6 are “Policy and strategy review”, “Data and tools library”, “Strategic zoning and pathways”, “Generation of initial delivery areas”, “Building-level assessment”, and “Finalisation of delivery areas”. These lead to Stage 7, “LHEES Strategy”, and Stage 8, “LHEES Delivery Plan”. Potential heat network zones are identified between the analysis stages and the Strategy and Delivery Plan.

The analysis in Stage 3 separates buildings into four categories, which are primarily based on their suitability for a heat pump retrofit. The categories are defined in the Scottish Government’s LHEES guidance and are based on indicators from the Home Analytics dataset. The table below provides a brief description of each category and the process for categorising all domestic properties.

Table 2: Domestic building categories and category indicators

Category 3 subcategories:

• Category 3 – Heat pump:
  • If the property is currently heated via an oil or LPG system
• Category 3 – Electricity (storage or direct):
  • Properties already using electricity as the main fuel type
  • Flats
  • Properties with double or triple glazed windows
  • Properties in urban areas (1, 2 or 3 in the 8-fold classification⁴)
• Category 3 – Biomass:
  • Properties already using biomass as the main fuel type
  • Detached and semi-detached properties
  • Properties of a solid brick or stone construction type

How this LHEES was developed

Orkney Islands Council’s LHEES was developed in partnership with Changeworks, following the standard methodology published by Scottish Government [see Appendix D].

⁴ Scottish Government Urban Rural Classification 2020

Policies and progress to net zero

Local policies and projects

Orkney Islands Council has several policies relevant to energy efficiency, decarbonising heating, and fuel poverty. The policies and relevant targets are summarised in the table below.

Table 3: Summary of relevant local policies

Heat and energy efficiency projects for Council-owned properties

Carbon Management

Orkney Islands Council has committed to continually improving its CO₂ emissions to meet the 42% baseline by the 2025-2026 financial year. This will be achieved by replacing oil and other fossil fuel heating systems in existing council-owned buildings with electrified alternatives such as heat pumps. Another aim is to improve the energy efficiency of its existing building stock over the next 20 years by upgrading and improving the insulation and heating systems of existing buildings. This target is in line with the ambitious public sector targets detailed in Scotland's Climate Change Plan and Scotland's Heat in Buildings Strategy.

Energy efficiency standards for social housing

Orkney Islands Council has made significant investments to improve the energy efficiency of its housing stock. The Council met the Scottish Housing Quality Standard (SHQS) by the deadline of April 2015 through major investment.

Due to this investment, 93.5% of council-owned homes have an energy efficiency rating of EPC band C or above, meeting the first phase of the Energy Efficiency Standard for Social Housing (EESSH).

EESSH2 has been implemented since December 2020. It seeks to ensure social rented properties achieve the equivalent of EPC Band B or above where it is practically possible to do so. The original EESSH2 milestones of 2025 and 2032 are currently on hold while the standard is reviewed to ensure alignment with the 2045 net zero target.

In accordance with the interim guidance on EESSH2⁵, Orkney Islands Council will undertake an individual building assessment when a property becomes void and take a fabric first approach, focussing on the building fabric before upgrading the heating system. Mechanical Ventilation with Heat Recovery (MVHR) systems will also be installed. These systems provide ventilation while recovering and reusing the heat in the air leaving the property. MVHR systems help maintain healthy air quality while saving energy on heating.

Currently, just under 20% of the Council’s housing stock reaches the energy efficiency rating of band B required for EESSH2 compliance. This is higher than the national level of 7%. Analysis undertaken by the Council in 2022 showed that adopting a fabric first approach and installing MVHR systems in the remaining properties not currently meeting the Social Housing Net Zero Standard would cost £25.2 million.

However, an independent review of the Housing Revenue Account suggests that it will cost even more to update the housing stock to meet the proposed energy efficiency standard (SHNZS). The Council will commission a comprehensive survey to establish up-to-date costs to meet these standards.

⁵ Energy Efficiency Standard for Social Housing post 2020 (EESSH2) review: interim guidance for social landlords

Carbon Trust

The Carbon Trust set out a range of projects aiming to reduce carbon emissions across all 32 local authorities⁶. Orkney Islands Council is now in its second 10-year programme, which is due to end in April 2026.

The current programme saw a total of 12 retrofits, including several schools, a community centre and a care home, which included a variety of measures such as:

• External wall insulation
• Ground source heat pump
• Loft insulation
• Re-roofing
• LED lighting replacement

These retrofits were a success and contributed to an annual carbon saving of 486 tonnes, all at less than £450 per tonne of carbon saved over the lifetime of the measures. Four larger projects—St Andrews Primary School; Kirkwall Care Home; St Margarets Hope Primary School; and Kirkwall Nursery—have since been added to the project list with the expectation of an additional 144 tonnes per annum saved.

⁶ Why Scotland’s public sector needs to rise to the carbon challenge | The Carbon Trust

Heat and energy efficiency projects across the area

Heat and Energy Efficient Scotland: Area Based Schemes (HEES: ABS)

HEES: ABS provides funding for privately owned homes across Scotland, administered by each council. In Orkney, funding increased through HEES: ABS from £785,102 in 2015 to over £1.7 million claimed in 2022/23. In 2023/24, funding totalled £1.86 million to install energy efficiency improvements in private sector housing.

In 2022/23:⁷

• The Council funded 239 energy improvements completed across 176 households.
• The Council offered grants of between £10,500 to £16,100 to households.
• EPC ratings for each household improved by an average of 11.7 points.
• On average, individual households saved £728 per year as a result of the energy improvements.
• 22% of homes referred to HEES: ABS were previously in the worst EPC Bands F or G.
• Energy improvements installed under the scheme have helped to save more than 108 tonnes of CO₂.

Since 2015, a total of 1,521 energy improvements have been completed across 1,184 households.

⁷ Warmworks (2023) Energy Efficient Scotland: Area-Based Scheme (Orkney) Annual Report 2022/23

Orkney Housing Association Ltd. maintenance programme

Orkney Housing Association Ltd. (OHAL) received grant funding from the Scottish Government Social Housing Net Zero Fund to add an additional 49 properties into the 2023/2024 planned maintenance programme. Energy efficiency works will include:

• High efficiency, triple glazed windows
• Replacement high insulation doors
• Loft insulation top ups
• Hot water cylinder jackets

It is anticipated that all properties which receive retrofit works will move to EPC band B or C. OHAL plans to bid for additional funding from the Social Housing Net Zero Fund to enhance the 2024/2025 maintenance programme. Future projects include more fabric improvements and zero direct emissions heating systems such as high retention storage heaters for OHAL properties.

OHAL were unsuccessful in their February bid to improve 130 properties spread across their housing stock. As such, they are moving ahead with a reduced programme that affects 29 properties, with works including:

• High retention storage heaters
• High efficiency, triple glazed windows
• Replacement high insulation doors
• Loft insulation top ups

Fuel poverty advice and assistance for Orkney Housing Association Limited tenants

Over the course of the last three years, OHAL has successfully bid for a total of £325,000 from various Scottish Government funding schemes. This has allowed OHAL to provide direct financial support to tenants for their energy costs. For example, in the financial year 2022/23, every OHAL tenant was able to access a £150 grant to assist with fuel costs.

In addition to this, OHAL has a dedicated Energy Advice Officer who provides bespoke support to tenants experiencing fuel poverty and/or in need of support or advice.

The Orkney Partnership

The Orkney Partnership is made up of the Council and four partner agencies—NHS Orkney, Police Scotland, Highlands & Islands Enterprise, and Scotland Fire and Rescue Service—collaborating with the community to accomplish its key priorities. One of the key priorities is sustainable development for the region, specifically tackling fuel poverty, transitioning to a greener economy, and meeting net zero by 2030.

These ambitions are set out and explained in The Orkney Community Plan 2023-2030. The partnership aims to increase the number of homes with sustainable and affordable forms of heating in the region. The target is to increase the number of homes built per annum with sustainable heating and improved insulation from 92 to 125 by 2030. This development will be undertaken through collaboration with the Council, housing associations, and private developers.

Energy Company Obligation (ECO)

The Energy Company Obligation (ECO) was first introduced in 2013 and places legal obligations on energy suppliers to deliver energy efficiency measures to domestic premises. The scheme is a UK Government energy efficiency scheme that supports private tenure households on low incomes and vulnerable households.

The aims of the scheme are to improve the least energy efficient homes and help to meet the UK Government’s fuel poverty and net zero commitments. Local authorities are invited to participate in these schemes.

Previously in Orkney, ECO funding was included in Area Based Schemes’ projects. However, the recent iteration of the scheme (ECO4) does not permit blended funding. The Council is considering a separate project to make use of the funds.

Regional projects

Islands Centre for Net Zero

The ICNZ is a ten-year UK and Scottish Government funded project supporting Orkney, Shetland and the Outer Hebrides in reducing their greenhouse gas emissions. The project has £16.5 million to provide:

• Research and demonstration funding and resource
• Direct community resources so that communities can develop their own localised decarbonisation projects
• Capital funding directly for projects that can actively decarbonise the islands
• Resources to identify further funding opportunities

The project is currently in its second funding year and has established a secure Data Exchange on UrbanTide’s uSmart platform, and data governance protocols. Early conversations have been held between ICNZ and the three local authorities to explore how the ICNZ Data Exchange can support LHEES and the councils’ Delivery Plans.

The project team are also developing demonstrations, including a domestic decarbonisation project in the Outer Hebrides, which is expected to have replicability for Orkney properties.

Scottish Government Policy

The following section discusses the most relevant policies from Scottish Government. For a full list of policies, see Appendix A.

In 2018, the Intergovernmental Panel on Climate Change (IPCC) advised that to reach the 1.5°C target set in the Paris Climate Accord, the world needs to reach net zero carbon emissions by 2050.

Achieving net zero is crucial to mitigating the impacts of climate change and worsening the consequences of climate change. With the way we heat our homes, workplaces and other buildings making up the third-largest cause of carbon emissions in Scotland, it is vital the nation decarbonises its buildings. This is done through implementing measures to improve the energy efficiency of domestic and non-domestic buildings, as well as transitioning to zero direct emissions heating systems.

Several national policies are relevant to driving LHEES, particularly the Heat in Buildings Strategy, the Heat Network Act, and the Fuel Poverty Act.

Heat in Buildings Strategy

The Heat in Buildings Strategy, published in 2021, sets out a vision that by 2045 Scotland’s homes and buildings will be cleaner and easier to heat and no longer contribute to climate change. The Strategy prioritises improvements to the fabric of buildings to reduce energy demand, alongside a focus on zero emissions heating systems, such as heat pumps and heat networks.

In the Heat in Buildings Strategy, the Scottish Government committed to the development of a Heat in Buildings Bill to provide the regulatory framework for zero emissions heating and energy efficiency.

In November 2023, the Scottish Government launched a consultation on the Heat in Buildings Bill, which proposes a minimum energy efficiency standard for private landlords by the end of 2028, and for owner-occupiers by 2033. It also proposes a ban on polluting heating systems in all buildings by 2045.

Social Housing Net Zero Standard

The Scottish Government has established targets to improve the energy efficiency of social housing. Previously, these targets have been set through the Energy Efficiency Standard for Social Housing (EESSH). EESSH2 guidance required all social housing to meet an energy efficiency rating of EPC band B by 2032. EESSH2 has been under review to realign the standard with net zero targets and the 2032 milestone has been put on hold.

In November 2023, the Scottish Government launched a consultation on a new Social Housing Net Zero Standard which will replace EESSH2. The proposed new standard includes setting a minimum fabric efficiency rating and introducing a requirement to replace polluting heating systems with clean alternatives by a backstop date of 2045, with possible interim targets before then.

Heat Networks (Scotland) Act 2021

Heat networks supply multiple buildings with heat or cooling from a central source or sources. This avoids the need for individual boilers or electric heaters in every building. The Heat Networks Act defines a heat network to mean either a district heat network or a communal heating system. It provides the legislative framework to both set up and regulate heat networks.

The act requires local authorities to review areas that are potentially suitable for heat networks within their constituency. This LHEES will function as the main vehicle by which Orkney Islands Council will carry out this review.

Fuel Poverty (Scotland) Act 2019

The Fuel Poverty Act was passed by the Scottish Parliament in 2019. According to this Act, a fuel poor household spends at least 10% of their net income to pay for reasonable fuel needs after housing costs have been deducted. A household is extremely fuel poor if fuel costs are 20% or higher.

The first set of targets laid out in this legislation are that by 2030 no more than 15% of households in Scotland are in fuel poverty and no more than 5% are in extreme fuel poverty. Homes with a lower energy efficiency were identified as one of the key drivers of fuel poverty and the LHEES looks to address this pressing issue.

Energy Performance Certificate reform

To date, Scotland’s energy efficiency targets have been articulated through Energy Performance Certificate (EPC) ratings. Recently, limitations of this approach have been highlighted.⁸ One limitation is that the EPC rating is a cost efficiency rating, where the cost of using the heating system is a factor in the rating. This makes the rating less useful for setting targets for the energy demand of buildings.

The Scottish Government has launched a consultation on EPC reform.⁹ It proposes to introduce a range of new metrics, including a fabric rating, which will specifically focus on the fabric performance in terms of heat loss. Recent consultations on minimum energy efficiency standards for buildings indicate that this rating may be used.

⁸ Climate Change Committee - Reform of domestic EPC rating metrics to support Net Zero

⁹ Scottish Government - Energy Performance Certificate (EPC) reform: consultation

Stakeholder engagement

In developing the LHEES, the Council has engaged with a variety of stakeholders on several topics related to the Strategy. The following subsections outline the levels of current and future engagement with various internal and external stakeholders; their interest in the development of the LHEES; their level of engagement; and the potential challenges that could be faced.

Interest and influence mapping

An Influence/Interest Matrix has been used to map key LHEES stakeholders across Orkney. This gives a clear picture of the level of engagement required for each stakeholder and quickly highlights who the high-priority stakeholders are.

The following engagement level is a recommended starting point for each tier, based on LHEES guidance from Zero Waste Scotland and Arup.

Tier 1

Part of project steering group. Ongoing engagement throughout the project at defined workshops, for example identifying priorities and for delivery. Specific engagement plans developed as required. Includes:

• Tackling Household Affordable Warmth (THAW) Orkney
• Orkney Housing Association Limited (OHAL)
• Warmworks – managing agent of HEES:ABS and national operator of the Warmer Homes Scotland Scheme

Tier 2

Participate in workshops and engage with the project at key milestones, if required. Potentially one-to-one contact during data collection stage and one-to-one interviews to be held with these stakeholders to gain further insight and understanding of priorities and delivery contributions. Includes:

• Home Energy Scotland (HES)
• Aquatera
• Island Centre for Net Zero

Tier 3 and 4

Potentially participate in workshops and engage with the project at key milestones, on an ad hoc basis, for example delivery planning. Receive a direct invite to public consultation. Includes:

• SSE
• Orkney Care & Repair
• Orkney Community Planning Partnership
• Orkney Renewable Energy Forum (OREF)
• Community Energy Scotland (CES)
• ReFlex Orkney
• Aspire Orkney
• Community Councils
• Development Trusts
• Orkney Builders
• R Clouston
• Kirkwall Business Improvement District (BID)
• Stromness Township Heritage Initiative (THI)

Engagement plans

Drafting the LHEES Strategy

Participation and consultation with stakeholders are essential to the development of the LHEES. The following outlines the initial stakeholder engagement work undertaken to date with Tier 1 stakeholders.

Warmworks

Since 2020, Warmworks has been the managing agent for Orkney Island Council’s HEES:ABS projects and work to deliver energy efficiency measures for private tenure housing. Warmworks provided detailed data on the number of measures and households it has worked with during this time, as well as laid out the challenges faced. The main priorities are improving energy efficiency in homes and removing energy efficiency as a driver of fuel poverty.

THAW Orkney

THAW is a third sector organisation with the aim to reduce levels of fuel poverty and achieve affordable warmth in Orkney. It has provided information on the type of energy efficiency saving advice given to householders, as well as the funds available to help make homes retrofit ready. THAW’s main priorities are improving energy efficiency in homes and removing energy efficiency as a driver of fuel poverty.

OHAL

OHAL functions as the only housing association in Orkney and currently manages 7% of housing in the region. Focusing on implementing tenant support, as well as by adopting a fabric first approach to retrofit, OHAL prioritises improving energy efficiency in homes and removing energy efficiency as a driver of fuel poverty.

Approval and public consultation process

After the draft of the Strategy was finalised, it went through the same consultation process as all Council policies:

• Approval from senior management
• Approval from Orkney Islands Council
• Public consultation

Further stakeholder engagement plans

The Council is already conducting stakeholder engagement as part of the recently passed Local Housing Strategy. The Council anticipates that there will be workshops and working groups around energy efficiency, fuel poverty, and other topics later in 2024. The Council staff responsible for LHEES will be part of these engagement activities.

Feedback from these sessions will be included in the ongoing development of the LHEES Strategy and Delivery Plans.

LHEES governance

The delivery plan will be updated on an annual basis. The following steps will be included:

• Assessment of current funding opportunities will be undertaken.
• Stakeholder group will be approached to update current progress and new opportunities. A short workshop may be used or a round of telephone calls / Team meetings.
• Stakeholder group will be reviewed to update list and level of involvement.
• Current projects will be evaluated in terms of progress, impact, and cost.
• New projects developed over the year will be evaluated.
• New data available will be used to update LHEES datasets. Where new data insights are available, these will be included in reporting and project development.
• Annual LHEES update report will be produced.

The completed report will be taken to the OIC Corporate Leadership Team. A briefing note will then be prepared and issued to the Councillors.

The LHEES Strategy document will be reviewed every five years. The process will include the following steps:

• Update strategy review, including what new legislation, national and local strategies will impact the LHEES.
• Delivery Plan will be reviewed as annual programme above and the highlights will be discussed in the strategy document.
• Revised strategy will undergo a public consultation.

The completed strategy will be taken to the OIC Corporate Leadership Team. A report will then be prepared for the P&R committee, with final approval by Full Council. The updated Strategy and Action Plan will then be published.

Baselining: Heat and energy efficiency in the Council

This section provides an overview of the building stock in Orkney Islands Council at the time of writing. This baseline allows the Council to create an effective strategy and to measure progress towards targets and the ultimate target of net zero by 2045.

Age, dwelling type, wall construction, tenure, and heating fuel are key factors that impact energy performance, operational costs, and living conditions in buildings. Home Analytics data for Orkney Islands Council has been used to benchmark key property statistics against overall national statistics found in the 2021 Scottish House Condition Survey.¹⁰

¹⁰ Introduction - Scottish House Condition Survey: 2021 Key Findings - gov.scot

Domestic buildings

Property age and construction type for domestic buildings

The majority of properties in Orkney Islands Council were built before 1950 and between 1984-1991. These properties are likely to require fabric measures to improve the level of insulation, due to the insulation standards in place at the time of their construction.

Table 4: Property ages per property type within Orkney Islands

IMAGE: Figure 2 is a stacked bar chart showing the distribution of property ages within property types in Orkney Islands. Detached houses are the largest property type, followed by semi-detached houses. Each bar is divided into the age bands Pre-1919, 1919-1949, 1950-1983, 1984-1991, 1992-2002 and Post-2002.

Property age can be used to predict construction type, which is useful when planning appropriate retrofit interventions across a large number of buildings.

The majority of properties in Orkney fall within two categories of construction: solid brick or stone (37% of total housing stock) and timber frame (32% of total housing stock). Additionally, 27% of total housing stock are of cavity construction, and 4% are system built. Within the total housing stock, 25% of properties are solid brick or stone and are uninsulated.

Properties of the same construction category provide an efficient opportunity for retrofit, as fabric measures can be standardised and installed at a larger scale. However, there will be a range of different thermal performances within each archetype.

Properties built before 1919 are likely to be of a solid wall construction, from brick or stone, with timber floor and roof construction. Stone buildings are likely to have a high conservation value, and might be within conservation areas or listed. Retaining the facing stone in such buildings is often essential to the character of the area, however, it also presents unique retrofit challenges and is expensive. In Orkney, 25% of all domestic properties have uninsulated solid walls.

Cavity wall construction became more commonplace from the 1920s onwards and is still built today. Like traditional construction, cavity wall construction commonly uses timber for floors and roofs. Walls are constructed in two layers, rather than a single leaf. In comparison to solid wall construction, unfilled cavity walls are almost twice as thermally efficient. In Orkney, 8% of domestic properties have uninsulated cavity walls.

In Scotland, timber frame construction superseded cavity wall construction as the primary method of housebuilding in the early 1980s. Older properties may have minimal mineral wool insulation between timber studs whereas newer properties may have up to 140mm of phenolic foam or air tightness barriers. In Orkney, 9% of domestic properties have uninsulated walls with a timber frame construction.

System-built usually refers to post-war, non-traditional construction housing that is not cavity wall constructed. It is generally found in mass social house building programmes of the period. Such housing is normally utilitarian in design with low conservation value. This is advantageous for potential external wall insulation interventions; however, these properties have a range of unique designs making standardised retrofit plans challenging.

A very small percentage of domestic properties in Orkney are system-built (4%). Half of these have uninsulated walls (2% of all domestic properties).

Table 5: Wall insulation by construction types of properties within Orkney Islands

Tenure of domestic buildings

Property tenure will have a direct impact on the pace and extent of retrofit installations across Orkney. Specific tenure-targeted policies such as EESSH2 for social housing have been proven to accelerate change. Conversely, the private sector has seen slower progress due to property owners not seeing a strong return on capital investment without government stimulation.

Approximately 14% of homes in Orkney are social housing: 7% council-owned and 7% housing association-owned. While these properties are eligible for various government funding streams for retrofit, the existing funding is not often sufficient to meet the energy efficiency requirements while keeping rent affordable.

Most properties in Orkney are owner occupied (72%) and a smaller proportion are private rented (14%). Private tenure properties will require a different approach to retrofit and heating upgrades than the social housing sector.

Table 6: Tenure split of properties within Orkney Islands

IMAGE: Figure 3 is a pie chart showing the tenure split of properties within Orkney Islands: owner occupied 72%, privately rented 14%, housing association 7%, and local authority 7%.

There are a small number of mixed tenure properties in Orkney. Mixed tenure provides an additional retrofit challenge due to multiple owners within the same property. Council-owned properties in mixed tenure buildings could be targeted first to develop a retrofit plan addressing challenges and opportunities.

Table 7: Mixed tenure properties in Orkney Islands

IMAGE: Figure 4 is a pie chart showing that 11,428 properties, or 96%, are single tenure and 531 properties, or 4%, are mixed tenure.

Fuel poverty

Box 1: Data sources for understanding fuel poverty

The Scottish House Condition Survey (SHCS) provides data on fuel poverty in Scotland. This data has been used to assess the fuel poverty of Orkney Islands. Scotland-wide data is published annually, with the latest data being from 2022. No data was published in 2020 and 2021 due to the COVID-19 pandemic. Local authority figures for fuel poverty are based on three years’ worth of SHCS data in order to achieve sufficient sample sizes. The latest data is from 2017-19. This is no longer accurate but may provide an estimate of how Orkney compares to the Scottish average.

The Scottish Index of Multiple Deprivation (SIMD) is a tool for identifying areas with relatively high levels of deprivation. It is a relative measure of deprivation across small areas, or data zones, in Scotland. “Deprived” does not necessarily mean “poor” or “low income”. It can also mean people have fewer resources and opportunities, for example in health and education. SIMD data is split into ten deciles covering the whole population, where one is most deprived and ten is least on the scale. The latest data was published in 2020.

Based on 2017-19 data from the Scottish House Condition Survey, Orkney’s fuel poverty rate¹¹ was 31%. This is above the Scottish average¹² in the same period, which was 24%.

Although there is no SHCS data available, it is likely that fuel poverty rates in Orkney now are far higher than 31%, as a result of the cost-of-living crisis and the sharp rise in energy costs. In 2022, the SHCS estimated that the national rate of fuel poverty had increased to 31%.

Table 8: Scottish House Condition Survey figures showing the three-year average fuel poverty rates across Orkney Islands and Scotland

¹¹ Scottish Government (2022) Scottish House Condition Survey: Local Authority Analysis 2017-2019.

¹² Ibid.

IMAGE: Figure 5 compares three-year average fuel poverty rates across Orkney Islands Council and Scotland. Orkney rates are 65% in 2013-15, 59% in 2014-16, 57% in 2015-17, 30% in 2016-18 and 31% in 2017-19. The chart notes that no local authority-level data was surveyed during 2019-2021 due to COVID-19 restrictions.

According to the Scottish Index of Multiple Deprivation, no properties in Orkney Islands fall within SIMD deciles one and two, the most deprived. However, this does not mean that deprivation does not exist. SIMD demonstrates that Orkney’s ferry-linked isles experience higher ongoing levels of deprivation, with these areas found to be in the bottom 28% across Orkney’s 29 datazones.¹³

With a priority of alleviating fuel poverty, Orkney Islands Council has used the LHEES process to investigate areas where fuel poverty has contributed to poor energy efficiency, particularly in social housing and the private rented sectors. This is detailed in the Delivery Plan.

¹³ Orkney Child Poverty Strategy 2022-2026

Primary fuel type for domestic buildings

The primary fuel type for domestic buildings in Orkney is very different from the Scottish national average because the Orkney Islands have no mains gas network. The majority of properties use electricity as the primary fuel type, approximately five times higher than the national average. There are also a high number of domestic properties using heating oil (37%), approximately seven times the national average.

Table 9: Primary fuel type statistics for domestic properties in Orkney Islands

IMAGE: Figure 6 compares domestic primary fuel types in Orkney Islands and Scotland. Orkney uses electricity in 56% of properties, oil in 37%, biomass or solid fuel in 6%, LPG in 1%, and mains gas in 0%. Scotland uses mains gas in 82%, electricity in 11%, oil in 5%, LPG in 1%, and biomass or solid fuel in 1%.

Energy Performance Certificate data for domestic buildings

Orkney has more properties across all tenures that are within EPC bands A-B, the most energy efficient, compared to the Scottish national average. Most properties within the local authority are within EPC band D. Orkney also has a far higher percentage of properties in bands E-G, the least energy efficient, compared to the national average.

Table 10: EPC data for domestic properties in Orkney Islands and national averages¹⁴

¹⁴ 3 Energy Efficiency - Scottish house condition survey: 2019 key findings - gov.scot

IMAGE: Figure 7 compares EPC bands across Orkney Islands and the Scotland average. Orkney has 8% in A-B, 20% in C, 32% in D, 26% in E and 14% in F-G. Scotland has 6% in A-B, 47% in C, 34% in D, 9% in E and 4% in F-G.

The social housing sector in particular has high levels of energy efficiency, with only 10% of properties in band E or F. It is also the tenure type with the largest share of properties in bands A-B.

Owner-occupied properties have a wider distribution across EPC bands compared to the national average. Overall, most of the owner-occupied properties in Orkney (76%) are band D or below.

The private rented sector is similar to the owner-occupied sector. Most properties (75%) in this sector are in band D or below.

Table 11: EPC data for domestic properties in Orkney Islands

IMAGE: Figure 8 compares EPC bands across owner occupied, private rental and social housing properties in Orkney Islands and Scotland. The chart presents the percentages listed in Table 11.

Carbon emissions from domestic buildings

Carbon emissions from buildings are often measured by kilograms of carbon emitted per square meter in the property. Carbon emissions across the Scottish national housing stock are relatively consistent between 67.4 kg/m² and 70.5kg/m² for all types of dwellings.

In Orkney Islands, the estimated amount of carbon emitted per m² across all property types except “other flats” is significantly lower than the national average. This is mainly because the majority of properties rely on electricity for heating, compared to the rest of Scotland where most homes rely on mains gas. Terraced housing and other flats have much higher emissions compared to detached, semi-detached and tenements in Orkney Islands.

IMAGE: Figure 9 compares estimated carbon emissions in kilograms per square metre per year for Orkney Islands and Scotland. Orkney and national figures respectively are: terraced 68.8 and 70.4; other flats 73.5 and 68.2; detached 63.0 and 70.5; semi-detached 65.8 and 69.8; tenement 64.5 and 67.4; and all dwelling types 64.4 and 69.3.

Non-domestic buildings

Figure 10 provides a breakdown of the number of domestic and non-domestic buildings in Orkney Islands Council. There are 11,578 domestic buildings in Orkney Islands, amounting to 85% of the total building stock in Orkney. By comparison, non-domestic buildings make up only 15% of the total building stock, of which 12% are publicly owned.

Non-domestic buildings include short term residential accommodation, offices, retail, hotels, industry, education and leisure facilities.

Heat demand

Despite making up only 15% of buildings, non-domestic buildings account for 25% of total heat demand across Orkney Islands. This demonstrates that average heat demand is higher in non-domestic buildings than domestic. Due to their higher relative heat demand, non-domestic buildings have the potential to be used as anchor loads to improve the feasibility of heat networks by providing guaranteed demand.

Table 12: Total property count for domestic and non-domestic buildings in Orkney Islands

Table 13: Total heat demand for domestic and non-domestic buildings in Orkney Islands

IMAGE: Figure 10 compares property counts and heat demand. Non-domestic buildings account for 2,098 properties (15%) and 67,575 MWh/yr (25%) of heat demand. Domestic buildings account for 11,578 properties (85%) and 207,324 MWh/yr (75%).

Figure 11 demonstrates that the relationship between number of properties and heat demand is not always directly proportional and is dependent on property end use. Non-domestic typologies such as hotels, residential uses¹⁵ and retail properties have higher average heating demands per property when compared to offices, education and industry.

Hotels have the highest heat demand of all non-domestic building typologies, accounting for 14% of non-domestic heat demand despite making up only 3% of non-domestic buildings. The category of hotels includes care homes, traditional hotels, hostels, guest houses and/or bed and breakfasts, which have very high heat demands.

Whilst offices make up 6% of total non-domestic buildings, they only contribute just under 4% of non-domestic heating demand. Similarly, although sports and leisure facilities generally have very high heating demands, there are only 42 buildings of this typology, contributing 2% of total non-domestic heating demand in Orkney Islands.

¹⁵ In the context of non-domestic buildings, residential use refers to short-term accommodation such as holiday lets.

IMAGE: Figure 11 compares non-domestic building counts and heat demand by building typology. Residential, retail and storage/distribution have the largest counts and highest heat demand. Hotels have a relatively small count but a high heat demand. Other typologies shown include military and prison, large entertainment sites, museums and galleries, places of worship, health, emergency services, heavy manufacturing, clubs and community centres, sports and leisure, cafes and restaurants, offices, education, light manufacturing, screened-out properties and other buildings.

Primary fuel type in non-domestic buildings

Nearly 80% of non-domestic properties across Orkney Islands use electricity as their main fuel source, a total of 1,664 properties.

Table 14: Non-domestic property count by main fuel type

While only 19% of non-domestic buildings use oil as the primary fuel type, oil is used to meet 32% of total heat demand, providing 21,307 MWh/yr of heat. This means that properties which use oil as a main fuel type have a higher average demand than those that use electricity.

Table 15: Heat demand by main fuel type (MWh/yr)

IMAGE: Figure 12 compares the count of non-domestic properties and their respective heat demands. Electricity accounts for 1,664 properties (80%) and 43,722 MWh/yr (66%); oil accounts for 409 properties (19%) and 21,307 MWh/yr (32%); and other fuels account for 25 properties (1%) and 2,546 MWh/yr (4%).

Heat networks

Heat networks are a key part of the transition to net zero in Scotland.

Previously, Orkney Islands Council explored initial feasibility of heat networks in the centre and outskirts of Kirkwall. The assessments conducted by an external consultant highlighted three potential network routes based on areas of high heat demand. One route explored the possibility of a heat network connecting the main council buildings in Kirkwall; the second followed the first route and extended to public buildings identified by the Council; and the third followed the first route and extended out through the Hatston Estate to the proposed Energy Centre to the west of the Industrial Estate. For all three routes, the return on investment was very low.

Based on LHEES analysis, there are 15 potential heat network clusters of varying area size and heat demands located in Kirkwall and one in Stromness. These are detailed in the Delivery Plan. Orkney Islands Council is seeking to explore the viability of connection opportunities between outputs from LHEES, prior and current assessments.

IMAGE: Figure 13 is a map showing potential heat network opportunities in Orkney Islands. It identifies clusters in Central Kirkwall, Stromness and the outskirts of Kirkwall. Red outlined priority heat network clusters surround anchor-load points, which are classified by annual heat demand from up to 70 MWh to above 750 MWh.

Priority A: Making Orkney’s homes energy efficient

Summary of Priority A: Making Orkney’s homes energy efficient

• The Council is focussed on improving energy efficiency for all tenures of homes.
• The Council has a “fabric first” approach meaning that improvements to the building’s walls, roof, floors, doors, and windows should be considered before installing new heating systems.
• Warmworks delivers Area Based Scheme funding, on behalf of the Council, to improve energy efficiency for owner occupied and private rented homes.
• In accordance with Scottish Government legislation, almost all social housing run by the Council and OHAL is EPC band C and above.
• There is upcoming legislation that will increase the energy efficiency standards for social housing. Once this is announced, the Council and OHAL will move forward with developing specific plans to further improve energy efficiency.
• Relevant policies: Local Housing Strategy (2024-2029, Draft), Council Plan (2023-2028), Strategic Housing Investment Plan (2021-2026), Carbon Management Programme (2016-2026), Energy Efficiency Standard for Social Housing, upcoming Scottish Government Heat in Buildings Bill and Social Housing Net Zero Standard.

Overview

Making Orkney’s homes energy efficient is a key priority for Orkney Islands Council. The approach the Council takes to improve energy efficiency depends on the tenure of the building.

The majority of homes (72%) in Orkney are owner occupied. A further 14% are privately rented. The Scottish Government’s upcoming Heat in Buildings Standard is likely to include a minimum energy efficiency standard for owner occupied and privately rented homes.

Owner occupiers and private landlords can access funding through the Heat and Energy Efficient Scotland: Area Based Scheme, delivered by Warmworks. Social housing properties are owned and managed by either the Council or Orkney Housing Association Limited (OHAL). These properties are required to meet different standards and are eligible for different types of funding from Scottish Government to improve energy efficiency.

The majority of homes with poor energy efficiency (EPC band D and below) are owner occupied and privately rented.

IMAGE: Figure 14 is a stacked bar chart showing EPC bands across all property tenures in Orkney Islands. It shows that OHAL and Orkney Islands Council properties have higher proportions in the more efficient bands, while owner occupied and privately rented properties have larger proportions in bands D, E and F-G.

Owner occupied & privately rented homes

As outlined in Section 4.1, there is a lot of work to be done to make owner occupied and privately rented homes more energy efficient in Orkney. Figure 15 shows the distribution of owner-occupied and privately rented homes that are EPC band D and below across Orkney.

IMAGE: Figure 15 is a strategic zoning map of owner-occupied and privately rented properties of EPC Band D and below across Orkney. It covers the Orkney Islands and provides inset maps for Stromness and Kirkwall. Data zones are shaded according to the percentage of properties in EPC Band D or below: less than 45%, 45%-55%, 56%-65%, 66%-75%, and over 75%.

Heat and Energy Efficient Scotland: Area Based Scheme

The Scottish Government provides funding to every local authority to improve energy efficiency in owner occupied and privately rented homes in areas with high levels of fuel poverty. This funding is called Heat and Energy Efficient Scotland: Area Based Schemes (HEES:ABS). A grant of up to £10,500–£16,100 was made available per customer in 2022/23, with a higher grant award available in certain circumstances.¹⁶ The main aim of HEES:ABS is to upgrade homes to at least EPC band C.

In Orkney, the scheme is run by a managing agent called Warmworks. Warmworks oversee delivery of the funding from start to finish, to install measures such as insulation and new, efficient storage heating. In many local authorities, the scheme is targeted at specific geographic areas with higher rates of fuel poverty. However, in Orkney the scheme is open to people living everywhere who meet the criteria.

In 2024/25, the following measures will be offered by Warmworks:

• High heat retention storage heaters
• Interlinked fire alarms
• Internal and external wall insulation
• Loft top-up insulation
• Underfloor insulation
• Virgin loft insulation

In 2015/16, Orkney Islands Council received nearly £800,000 in HEES:ABS funding. In 2024/25, the Council will deliver £1.2 million worth of energy efficiency projects. The Council intends to lobby for additional funding, as the original bid was for £2.25 million.

In 2023/24, the HEES:ABS scheme funded 229 energy efficiency improvements in 172 households in Orkney. In 2022/23 the scheme:

• Increased the energy efficiency of homes, with the average SAP score increasing by 11.7 points.
• Helped some of the least energy efficient homes in Orkney, as 22% of homes referred to HEES:ABS were in EPC bands F and G.
• Saved 108 tonnes of CO₂ by improving energy efficiency and reducing emissions.

¹⁶ Warmworks (2023) Energy Efficient Scotland: Area-Based Scheme (Orkney) Annual Report 2022/23

THAW Flex Fund

THAW, Orkney’s fuel poverty charity, also provides funding for owner occupied and private rented homes to make energy efficiency upgrades. Households must be in extreme fuel poverty, spending a minimum of 20% of their income on energy bills, to be eligible.

Council-owned social housing

The Council owns 7% of the total housing in Orkney. Improving the energy efficiency of the Council’s housing is a key priority and allows the Council to lead by example in delivering retrofit.

The Energy Efficiency Standard for Social Housing (EESSH) requires social housing properties to be EPC band C or D at a minimum. A stricter standard called EESSH2 was brought in more recently for all properties to be EPC band B, or as close as possible. EESSH2 is currently on pause as it is undergoing review. The Scottish Government intends to replace EESSH2 with a new standard called the Social Housing Net Zero Standard (SHNZS).

96% of Orkney Islands Council housing stock meets the current EESSH standard. Only 20 properties did not meet the standard due to various reasons described in the Local Housing Strategy.

The new standards are expected to be much more difficult to achieve. To prepare, the Council has been trialling approaches when properties become empty.

IMAGE: Figure 16 is a strategic zoning map of Orkney Islands Council-owned social housing properties of EPC Band C and below. It shows the Orkney Islands with inset maps for Stromness and Kirkwall. Data zones are shaded by the percentage of council-owned social housing properties in EPC Band C and below, ranging from below 1% to over 11%; areas without council-owned buildings are hatched.

Energy efficiency standards for new homes

Based on an analysis of new social rented housing needs and the Council’s Housing Revenue Account, the Council has a target to build 14-15 new social rented homes every year for the next ten years, or 140-150 by 2034. These homes need to meet a certain energy efficiency standard.

• Summarise specifications for energy efficiency in new build properties

Orkney Housing Association Limited (OHAL)-owned social housing

OHAL is the only housing association operating in Orkney. OHAL owns 7% of the housing in Orkney, half of the social housing.

Energy efficiency standards for new homes

OHAL’s Business Plan sets a target for 20 new homes to be built every year. These homes will be built to the Scottish Government energy efficiency standard required for social housing.

Retrofitting existing homes to improve energy efficiency

OHAL’s approach to improving the energy efficiency of its housing stock involves tenant support and a fabric first approach—making the building itself more efficient so less energy is needed to heat a home.

97% of properties run by OHAL meet current EESSH standard. Only 13 properties fail these standards due to various reasons described in the Local Housing Strategy.

IMAGE: Figure 17 is a strategic zoning map of OHAL properties of EPC Band C and below. It shows the Orkney Islands with inset maps for Stromness and Kirkwall. Data zones are shaded by the percentage of OHAL properties in EPC Band C and below, ranging from below 6% to over 25%.

Priority B: Alleviating fuel poverty

Summary of Priority B: Alleviating fuel poverty

• Nearly every home in Orkney is at risk of fuel poverty, if not already experiencing it.
• A large number of homes in Orkney are experiencing extreme fuel poverty and fuel poverty rates are worse in more remote areas, such as the Outer Isles.
• There are many causes of fuel poverty. Energy efficiency is one of the most straightforward ways that the Council and partners can alleviate extreme fuel poverty in Orkney.
• Warmworks, THAW and OHAL all provide support for households in extreme fuel poverty to improve energy efficiency.
• Relevant policies: Local Housing Strategy (2024-2029, Draft), Orkney Sustainable Energy Strategy (2017-2025), Regional Spatial Strategy (2011), Orkney Integration Joint Board: Joint Strategic Needs Assessment (2016), Fuel Poverty (Scotland) Act 2019.

Fuel poverty in Orkney

A household is in fuel poverty if they cannot afford to heat their home to a reasonable and healthy temperature. Across all of Scotland, the four main causes are:

• High fuel costs
• Poor energy efficiency in homes
• Low household income
• How energy is used in the home

In Orkney, these factors are made more extreme and there are additional causes:

• Cold, wet and windy climate
• Higher fuel costs than other parts of Scotland, due to reliance on electricity, heating oil, or LPG
• High cost of housing
• High cost of living
• High rates of underemployment and unemployment
• Ageing demographics
• Limited access to support services because funding is limited, or support is dispersed across rural and remote areas

Nearly every household in Orkney is at risk of fuel poverty. According to the Scottish Government definition, a fuel poor household spends at least 10% of their net income to pay for reasonable fuel needs after housing costs have been deducted. A household is extremely fuel poor if fuel costs are 20% or higher.

The Scottish Housing Condition Survey reports that 31% of households in Orkney are in fuel poverty. However, this was from 2017-2019 before the energy crisis and does not include a number of important factors that have since impacted levels of fuel poverty.

According to Warmworks, nearly every household in Orkney would be considered fuel poor if assessed. This means nearly every household is likely to be eligible for HEES:ABS grant funding.

Extreme fuel poverty

80% of households who THAW supports are in extreme fuel poverty. One in six THAW clients would need to spend nearly all of their income to keep warm at home. As a result of the high costs, 60% of THAW clients are not heating their home to a healthy or warm level.¹⁸

¹⁸ THAW (2023) Annual Review 2023.

Fuel poverty on the Outer Isles

Fuel poverty is not evenly distributed in Orkney. Organisations like Warmworks and THAW report that fuel poverty is more extreme on the Outer Isles than it is on the Mainland. This is because the cost of living is higher, the climate is more exposed, and buildings are less energy efficient.

Changeworks analysed how likely it was that households are in fuel poverty due to inefficient housing across Orkney. The analysis indicates that energy inefficient housing plays a larger role in fuel poverty in the Outer Isles than the Mainland.

IMAGE: Figure 18 is a strategic zoning map showing energy efficiency as a driver of fuel poverty in Orkney Islands. It covers the Orkney Islands with inset maps for Stromness and Kirkwall. Areas are shaded by weighted fuel poverty scores, with higher scores indicating a higher level of fuel poverty and more uninsulated walls. The score bands are 0-28, 29-34, 35-39, 40-46 and 47-60.

Addressing fuel poverty by improving energy efficiency

Improving energy efficiency is one of the most straightforward ways to reduce extreme fuel poverty in Orkney. This section outlines the various schemes and organisations addressing fuel poverty by making people’s homes more energy efficient.

THAW Orkney

THAW Orkney is a fuel poverty charity in Orkney. It addresses fuel poverty through energy efficiency advice and funding retrofit projects.

THAW energy advisors provide bespoke advice to householders about energy efficiency. This advice can help people use heating systems more efficiently, identify small draughtproofing projects to do at home, and more.

THAW has introduced a new type of grant called the Flex Fund. The Flex Fund provides between £250 and £2,000 to households in extreme fuel poverty. The funding can go towards repairing heating or hot water systems or providing additional funding alongside other schemes such as HEES:ABS.

HEES:ABS Extreme Fuel Poverty uplift

The Heat and Energy Efficient Scotland: Area Based Scheme, delivered by Warmworks, provides additional grant funding to households who are in extreme fuel poverty, assessed on a case-by-case basis. In 2022/23, households who received HEES:ABS funding saved an average of £728 on their energy bills annually because of the energy improvements installed.

Warmworks also has a Local Engagement Manager who works with other organisations to increase the number of households outside of the Mainland applying for funding.

OHAL Energy Advisor

OHAL has a dedicated Energy Advice Officer who provides advice to tenants experiencing fuel poverty and/or needing support or advice around their energy. The Energy Advice Officer can offer information specific to the tenant’s situation to help them use energy more efficiently.

Priority C: Improving carbon efficiency in council buildings

Summary of Priority C: Improving carbon efficiency in council buildings

The Council has a responsibility to improve the energy efficiency of its operational and leased buildings. However, there is limited data on these buildings. 17% of the Council’s operational buildings and 29% of the Council’s leased buildings have EPCs.

The Council will increase the carbon efficiency of these buildings, which means improving energy efficiency and changing heating systems away from fossil fuels, like oil or LPG.

• Operational buildings: There are a number of projects underway to improve the energy efficiency and replace heating systems in operational buildings.
• Leased buildings: The Council will collect more data on these buildings and explore ways to help tenants improve energy efficiency and upgrade heating systems.
• Relevant policies: Carbon Management Programme (2016-2026), Orkney Sustainable Energy Strategy (2017-2025)

Overview

The Council has a responsibility to improve the carbon efficiency of the buildings that it operates and leases. Measures to improve carbon efficiency include energy efficiency measures and decarbonising heating systems. A number of Council operated and leased buildings will need to replace their fossil fuel-based heating systems to meet the 2045 net zero target.

The Council is already working on several projects to improve the carbon efficiency of its operational buildings. The biggest barrier to taking further action in this area is energy and building data. The Council is interested in developing a tool to track EPC information live.

Operational buildings

The Council owns and operates 271 non-domestic operational sites across Orkney. Operational buildings include schools, council offices, sports centres and more. Only 17% of the Council’s operational buildings currently have valid EPCs. The Council is legally bound to do EPCs for the remaining 83% of operational buildings without EPCs.

The 2016-2026 Carbon Management Programme identifies a list of projects on Council-owned operational buildings to improve carbon efficiency:

• Hamnavoe House – replacement of existing care home with high efficiency building using zero direct emission ground source heat pump
• Stromness Swimming Pool – thermal upgrade and heat pump replacement of boiler plant
• Stronsay Junior High School – thermal upgrade and heating systems upgrade
• Shapinsay Primary School – thermal upgrade and heating system upgrade
• Hatston Pier & Ferry Terminal – LED lighting upgrade
• South Pier, Stromness – LED lighting upgrade
• Kirkwall Pier, Marina Breakwater – LED lighting upgrade
• Papdale Primary School – thermal upgrade
• Pickaquoy Centre – LED lighting
• Stromness Academy – thermal upgrade
• Hope Primary School – air source heat pump replacement of oil boiler plant
• Smiddybrae Care Home – ground source heat pump replacement of oil boiler plant
• St Andrews Primary School – ground source heat pump replacement of oil boiler plant

For the past 10-15 years all major new build projects in the county have employed renewable heating systems, with ground, air and sea source heat pumps all being used to make best use of the renewable resources available.

Building fabric is of primary concern when addressing energy efficiency. High levels of insulation are specified for all building elements in the new build programme and where possible U-values will exceed current building standards requirements. With the maritime climate of Orkney, buildings are frequently exposed to windy conditions, so the airtightness of buildings is very important. All new build properties are now tested to ensure air infiltration is low. The use of warm roofs has been adopted in new build projects to ensure a continuous insulated envelope both at handover and in later operational use.

Existing operational buildings have also benefited from building fabric upgrades including external and internal wall insulation, triple glazing, underfloor insulation and airtightness improvements.

Leased buildings

In addition to operational buildings, the Council owns and leases 89 buildings in Orkney to other stakeholders. Examples include offices, storage and multi-use spaces including workshop and/or storage.

The majority of leased properties are let on a full repairing lease, which means the Council has less control over how these buildings are operated compared to operational buildings. Tenants are normally responsible for arranging their own utility contracts. The Council has EPCs for 29% of leased buildings in Orkney. It is a priority for the Council to do EPCs on the remaining leased buildings without EPCs.

Priority D: Exploring heat networks for Council buildings

Summary of Priority D: Exploring heat networks for Council buildings

The final priority for Orkney Islands Council is exploring heat networks for non-domestic Council buildings. Heat networks can provide reliable and decarbonised heating to buildings. The Council has the opportunity to explore the implementation of these heat networks for its non-domestic buildings due to them possessing large, reliable and long-term demands for heat.

• Areas of interest: Central Kirkwall, West Kirkwall, Stromness, and Dounby.
• As buildings in Orkney are not very densely built, it will be difficult to make a heat network cost effective. Further analysis is needed to see if any of the potential heat networks will be feasible.
• Each of the potential heat networks has been chosen because there is at least one building owned by the Council that requires a replacement heating system of either a heat network, heat pumps, or other electric heating system.
• There is some funding available for heat networks, including the Central Energy Efficiency Fund and the Scottish Public Sector Energy Efficiency Loan Scheme.
• Relevant policies: Local Development Plan (2017), Heat Networks (Scotland) Act, upcoming Heat in Buildings Bill.

The Council has commissioned feasibility studies for several potential heat networks across Orkney. However, to date none have been identified as feasible or cost effective. The main reason is that heat networks need a large and consistent demand for heating to be feasible, which is difficult to provide from a dispersed building stock.

The Heat in Buildings Bill would require a ban on polluting heating systems in all buildings by 2045. Many non-domestic council buildings would need to transition to zero direct emission heating systems. Heat networks are one kind of permitted system under the bill.

Based on an initial analysis, the Council has identified potential heat networks in central Kirkwall, west Kirkwall, Stromness, and Dounby. The map below identifies the four potential heat network zones in Orkney.

IMAGE: Figure 19 is a map titled “Shortlisted Heat Network Opportunities”. It shows four areas: Central Kirkwall, West Kirkwall, Stromness and Dounby. Coloured outlines identify the potential heat network areas, with symbols showing potential anchor loads and oil-fired council-owned buildings. A legend identifies the Central Kirkwall, Stromness, West Kirkwall and Dounby heat networks, OIC new housing development, and anchor-load heat-demand bands from up to 70 MWh to above 750 MWh.

Challenges

Challenges for domestic buildings

Owner occupied properties

In Orkney Islands Council, 72% of properties are owner-occupied. Of these, 24% are in EPC bands A-C, meeting the proposed 2033 requirements for energy efficiency. The remaining 76% will require improvements to the building fabric and/or heating system within the next 10 years.

Private rented sector

In Orkney Islands Council, 14% of properties are privately rented. Almost half, 49%, are in EPC bands D or below. Under the upcoming Heat in Buildings Bill, privately rented properties will likely be required to meet a minimum energy efficiency standard equivalent to EPC band C by 2028.

There is a “split incentive” for landlords to upgrade their properties. Whilst the private landlord is responsible for paying the cost of energy efficiency upgrades, they do not gain the financial benefits from cheaper energy bills.

Social housing

In Orkney Islands Council, 14% of properties are social housing, with half of these being owned by the Council. A new energy efficiency standard is being developed for social housing. Social landlords will need assurance of long-term and adequate funding to fund projects and avoid rent increases, which would worsen fuel poverty.

Mixed tenure

In Orkney Islands Council, 4% of properties are in mixed tenure buildings. Mixed-tenure buildings are often slow to renovate because, for some measures such as external wall insulation, all occupants in the building must agree to the installation and pay towards funding the project.

Exposed climate

Orkney is made up entirely of islands, leaving many households located near the coastline at risk of exposure to extreme weather. Over time this degradation can force homes into disrepair, most notably through leaky roofs and damp walls. Disrepair makes homes hard to heat and hard to treat or retrofit.

Geography

Orkney’s population is sparse as it is spread across 20 permanently inhabited islands,²¹ meaning 66.5% of the population live in areas classified as remote rural.²² This results in just 22 people per km², significantly lower than the Scottish average of 70 per km².²³

This low density and rural setting can result in households becoming isolated and having far higher rates of heat loss compared to those in urban environments. The exposed climate and high level of heat loss can leave Orkney residents requiring far longer periods of heating, at a far higher price, compared to the rest of Scotland.

²¹ Orkney Islands – Scotland.org

²² Scottish Government Urban Rural Classification

²³ Orkney Islands Key Statistics

High upfront capital costs

Many properties in Orkney require significant improvements to the building fabric to overcome the consequences of the region’s geography and exposure to the climate. The combined effect of travelling between islands and having a poor economy of scale means retrofit costs are often much higher for Orkney householders compared to the rest of Scotland.

Building archetypes and bespoke properties

Orkney has a high percentage of unique or custom-built building archetypes and extensions compared to other local authorities. Retrofitting custom-built properties can be challenging because each building is unique, and each home may have uncommon or varying wall and floor types.

Cost of professional surveying

Due to the diverse range of archetypes across the region, it is essential that every house in Orkney being retrofitted receives an assessment. This is so that the correct measures and retrofit design are undertaken, based on the building’s data.

Piecemeal funding

It can be difficult for the Council, OHAL, and other stakeholders to commit to large-scale retrofit projects because of the varied archetypes in the building stock and low density of buildings. As a result, the Council must instead apply for smaller scale projects. This piecemeal funding structure can be challenging and time consuming.

Funding restrictions

Most of the funding for energy efficiency and heat decarbonisation work in Orkney is provided by Scottish or UK Government. The requirements for funding are often designed for the entire country rather than tailored to Orkney specifically.

Grid constraints

Switching all buildings to electricity from oil and LPG will put additional pressure on the electricity grid. The grid will need to be reinforced to enable large-scale heat decarbonisation.

Challenges for non-domestic buildings

Poor data accuracy

More accurate fuel poverty data and updated EPC data is essential to making correct models in LHEES. Council-owned, non-domestic operational buildings are largely up-to-date. However, there is limited data on Council-owned buildings that have been leased out externally long-term.

Data for non-domestic properties not owned by the Council is difficult to obtain. The EPC register has very few entries due to the low turnover of properties. The Building Assessment Reports required to be completed as part of the heat networks assessment may provide useful information in the absence of an EPC.

Funding avenues

Most funding streams available are focused on domestic rather than non-domestic properties, due to the greater impact this will have on alleviating fuel poverty and reducing carbon emissions across the region. This makes it difficult to find funding options focused on improving the energy efficiency of Orkney Islands Council’s non-domestic buildings.

Barriers to developing heat networks

Low heat density in Orkney

Orkney has a low population density, and buildings are generally dispersed. There are a small number of non-domestic council buildings with heat demand high enough to warrant the exploration of a heat network.

High use of heat pumps by commercial properties for heating

Housing tends to be electrically heated. Moving to heat networks would require wet heating systems to be installed.

Anchor loads

Anchor loads tend to be some distance from one another, which creates a further heat-density challenge.

Existing low-carbon heating

Major non-council loads are already on low-carbon heating, including Balfour Hospital and Highland Park Distillery.

Opportunities for Orkney Islands Council

Decarbonising heat and improving energy efficiency provide a range of economic and development opportunities for communities, the Council, businesses, charities and individuals in Orkney.

Domestic retrofit opportunities

Supply chain development

The LHEES Delivery Plan will outline the substantial pipeline of work required to achieve the net zero targets in Orkney. A clear pipeline will help to improve the local availability of “green skills” in Orkney by encouraging the existing labour force to invest in upskilling young talent and provide opportunities.

There is a shortage of electricians in Orkney which limits the number of heat pumps that can be installed. Warmworks has already supported contractors to complete their accreditations and is working to boost the number of electricians in the region.

Addressing disrepair

Identifying house disrepair is one of the main barriers to undergoing retrofit works. THAW has developed the Flex Fund grant, which offers between £250 and £2,000 for households in extreme fuel poverty. The grant can go towards small-scale repairs, such as fixing leaky roofs or replacing outdated septic tanks, as well as clearing out homes.

Retrofit assessment upskilling

THAW is looking to train staff in a retrofit assessment qualification to offer detailed home assessments. This could make retrofitting more accessible and enable widespread home assessments across the region.

Area Based Scheme

The Area Based Scheme has been effective at improving energy efficiency and fuel poverty rates in Orkney. The scheme has grown from providing £800,000 worth of retrofit projects in 2015/16 to £1.7 million in 2022/23.

The Council aims to increase HEES:ABS funding to £4 million by 2026, pending Scottish Government approval, as detailed in the Local Housing Strategy. Expanding this funding provides opportunities to help tackle private-tenure households with poor energy efficiency, particularly those in more isolated areas.

Stakeholder collaboration

Fuel poverty stakeholder collaboration

Fuel poverty is a pervasive challenge across all of Orkney, and many organisations across the area collaborate to support householders. Examples include the Cost of Living Task Force, the Orkney Money Matters project and the Fuel Poverty Task Force.

One outcome of collaboration is a strong referral system between fuel poverty organisations, including the Council, Warmworks, and THAW. The network enables those suffering from fuel poverty to be referred to Warmworks to access funding for energy efficiency measures. It also directs people to THAW, which offers energy efficiency advice and access to other grants and funds.

Next steps

Summary of context

Orkney Islands Council’s LHEES sets out how to improve energy efficiency of domestic and non-domestic buildings, address fuel poverty through energy efficiency, and explore heat network options. This Strategy informs, and should be read alongside, the LHEES Delivery Plan.

The Strategy will support the Council and its community planning partners to scale up and align existing programmes, and to increase the scale and pace of retrofit and heat network development needed to meet the national target of net zero by 2045.

Overall, the content of Orkney Islands Council’s LHEES has been informed primarily through a data-driven approach and by working with close partners of the Council. The Strategy outlines challenges which need to be overcome to decarbonise Orkney Islands Council’s buildings. It also highlights opportunities, including four potential heat networks.

There is a statutory duty on the Council to update the LHEES every five years. Due to the urgency of the climate emergency and the rapidly evolving policy landscape, the Strategy and Delivery Plan will both be reviewed and updated on an annual basis, where relevant.

Summary of priorities and actions

Orkney Islands Council identified the following priorities for heat and energy efficiency:

• Making Orkney’s homes energy efficient
• Alleviating fuel poverty
• Improving carbon efficiency in Council buildings
• Exploring heat networks for Council buildings

LHEES Delivery Plan

The Council’s LHEES Delivery Plan identifies tangible and specific actions in the next five years to achieve the four priorities set out in this Strategy. The actions are organised by tiers:

• Tier 1: actions that are immediate and/or already in progress
• Tier 2: actions to take in the next 1-2 years
• Tier 3: actions to take in the next 3-5 years

This document and the Delivery Plan will be reviewed regularly.

Glossary

Defining terms

Appendix

Acronyms and abbreviations

Appendix A: Additional national policy drivers

Appendix B: Datasets used in the development of this LHEES

Appendix C: Datasets and Limitations of the LHEES approach

Home Analytics

Home Analytics Scotland provides essential data on the Scottish housing stock. The core datasets are:

• Energy Performance Certificate data
• Home Energy Efficiency Database (HEED) data
• Energy Saving Trust Home Energy Check (HEC) data
• Ordnance Survey AddressBase, MasterMap Topography layer and StreetMap data
• Scotland Gas Networks data
• Scottish Census data
• Scottish Index of Multiple Deprivation (SIMD) data

While there is full coverage of the Council’s property stock, the data is not entirely accurate given that not all properties are surveyed. Where gaps exist, property information will have been estimated based on neighbouring characteristics using statistical modelling.

Fuel poverty figures in the dataset only act as an indication. The fuel poverty data is probability driven and users should not treat figures as an absolute number or percentage but rather a likelihood of fuel poverty.

Fuel poverty data is calculated using:

• Probability of wall being uninsulated
• Loft Insulation Prediction
• Loft Insulation: 0-99mm
• Loft Insulation: 100-249mm
• Loft Insulation: >250mm
• No loft
• Excess Cold Category 1 Hazard
• Probability of Fuel Poverty (Fuel Bill >10% of Income)

Non-domestic Analytics

Non-domestic Analytics is a dataset developed by Energy Saving Trust on behalf of Scottish Government. It brings together property details from sources such as the Scottish EPC Register, Ordnance Survey, Scottish Assessors and BEIS.

There are limitations on the confidence of using Non-Domestic Analytics due to the lack of robust information from the non-domestic sector. Much of the data relies on significant modelling. Users should not take figures as an absolute number or percentage but rather an estimation.

Scotland Heat Map (2020)

The Scotland Heat Map contains domestic and non-domestic heat demand data and is an important resource for identifying opportunities for efficient heat supply projects. As the dataset was captured in summer 2020, demand data exists only as a snapshot in time. Since network viability is based around the demand of individual buildings, differences between modelled and expected demand may affect viability.

PEAT-OR tool

The PEAT-OR tool accompanies Home Analytics and is used to investigate cost intervention options for a portfolio of up to 500 properties.

Limitations include:

• Individual measures cannot be isolated or removed.
• Costs and carbon savings are calculated for all possible measures.
• Fuel cost data used within PEAT-OR was released at the start of July 2023 and is not totally accurate because fuel costs change frequently.

These limitations affect the outputs from Stage 5, which should be understood as estimates only.

Ordnance Survey

Various mapping data is central to the development and use of Scotland’s Heat Map and other GIS information sources. OS product data and licences are required to use SHM and other OS-derived datasets.

One Scotland Gazetteer

The One Scotland Gazetteer is a central database for all addresses within an authority and is key to GIS elements of LHEES for identifying multi-tenure non-domestic properties.

Appendix D: LHEES stage descriptions

Stage 1: Policy and strategy review

A policy review was carried out to highlight national, regional and local policies that are linked to, impact, or could be impacted by LHEES. Results from this review, along with initial stakeholder mapping, were logged in the policy review template for reference during subsequent stages of the LHEES.

Stage 2: Data and tools library

This stage involves identifying and maintaining a record of the data and tools used to support analysis in the subsequent stages of the LHEES process. The record captures data sources, ownership rights, requirements for the LHEES Considerations and data format.

Stage 3: Strategic zoning and pathways

The purpose of LHEES Stage 3 is to support local authorities to understand the current energy efficiency and heat decarbonisation performance of the building stock at a local-authority-wide level. It also supports analysis to set out Strategic Zones and pathways for each LHEES Consideration.

These Strategic Zones identify potential solutions for inclusion in the LHEES Strategy (Stage 7). The analysis sets out the strategic starting point for generation and prioritisation of Delivery Areas (Stage 4), as well as further engagement and actions for the Delivery Plan (Stage 8).

LHEES Stage 3 is supported by both the Domestic Baseline Tool and the Non-domestic Baseline Tool. The Domestic Baseline Tool was developed by Zero Waste Scotland using Home Analytics. The Non-domestic Baseline Tool was developed following the release of Non-Domestic Analytics.

According to the LHEES methodology, the level of heat pump “readiness” in domestic properties is sorted into four categories:

For Orkney Island’s LHEES, only wall insulation was accounted for in Stage 3 because this was the most relevant factor to the local domestic property stock.

Stage 4: Generation of initial Delivery Areas

Stage 4 is informed by the LHEES Strategy and analysis from Stages 1-3. Its purpose is to support the Council’s decision making by generating initial Delivery Areas for each LHEES Consideration.

This analysis is the starting point for more detailed engagement, building-level assessment of interventions and cross-checking against the policy and strategy review to enable finalisation of the Delivery Areas in Stage 6.

Stage 5: Building-level pathway assessment

The purpose of LHEES Stage 5 is to establish in more detail the type of interventions required to decarbonise buildings from a heating and energy efficiency perspective. This stage provides an understanding of the costs and the energy and carbon savings associated with interventions.

Stage 5 enabled Orkney Island Council to select and analyse domestic buildings for assessment in the Energy Saving Trust’s PEAT-OR. A PowerBI report was developed to enable the Council to explore potential decarbonisation results in an interactive and customised manner.

Stage 6: Finalisation of Delivery Areas

During this stage, Strategic Zones, initial Delivery Areas and any building-level assessment were considered alongside the detail included as part of the policy and strategy review and all stakeholder engagement undertaken. The outcomes from this stage are documented in the Stage 8 Delivery Plan.

Appendix E: Deviations from standard LHEES methodology

Appendix F: Detailed methodology for the identification of potential heat network zones

Analysis was undertaken to identify the areas where heat networks present a decarbonisation pathway that could be of strategic importance for Orkney Islands Council.

Heat Data Point non-domestic properties were filtered to include only semi-public and public buildings. These were refined using OS AddressBase classification codes identified as semi-public or public by the Green Heat in Greenspaces project. A sense check of building names was also carried out to identify council-owned buildings.

This approach was chosen so that only non-domestic buildings that the Council has full or partial control over are treated as potential anchor loads in the heat network zoning. When defining anchor loads, public and council-owned buildings have been prioritised because the Council has greater control over their operation.

Heat network zones have been identified based on a 4,000 kWh/yr/m linear heat density, a means of relating annual heat demand to a distance. Areas of greatest potential for heat network development have been further identified based solely on heat demand, where at least two anchor loads were required to exceed 500 MWh/yr.

Further analysis through feasibility studies and constraints analysis was required to understand the viability of heat network development in each identified area. Existing heat networks have been added to potential heat network zones to identify viability of heat network expansion. For the purpose of LHEES, a 500m radius buffer has been drawn around existing heat network points to provide a sensible estimate of the area within which heat demand can serve.

The methodology for identification of heat networks has been summarised in the figure below. For a comprehensive methodology, please see the Heat Network Zoning methodology in the LHEES documentation.

IMAGE: Figure 20 is a flow diagram summarising the Scottish Government heat network methodology for LHEES. It begins with the Scotland Heat Map, imports point data with heat demand greater than zero, filters domestic, semi-public and public buildings, updates the All_Buildings template and imports it into ArcGIS, performs buffering around anchor loads and domestic buildings, creates clusters with more than two anchor loads and dissolved buffers, performs proximity analysis of opportunities and resources, performs proximity analysis of barriers and constraints, summarises priority clusters, resources and constraints in an Excel table, and produces Stage 4 heat network outputs consisting of a summary table, ArcGIS shapefiles and a GIS data guide.