Mapping of district heating feasibility studies in Scotland

This study collects, analyses and maps data relating to previous district heating (DH) feasibility studies in Scotland. District heating feasibility study data, obtained primarily from industry stakeholders, was analysed to identify common barriers restricting district heating development and to map study locations. This research aims to support emerging national district heating policy and to enhance the Scottish Heat Map.

We analysed 44 studies, which comprised a total of 76 proposed district heating schemes. We also undertook an additional high-level review, and mapping, of a further 33 ‘in development’ schemes that were included in the Scottish Government’s ‘Low Carbon Heat Database’. Therefore, a total of 109 proposed district heating schemes were reviewed and mapped.

It is worth noting that data collection from stakeholders was severely hampered by the Covid-19 pandemic.

Key scheme characteristics

• Scheme viability: When considering the 76 proposed schemes that were reviewed in detail: 46 proposed district heating schemes were reported by the authors as being viable and 22 schemes were reported as being unviable (with circa 37% being reported to be financially unfeasible). No assessment of viability was reported for the remaining eight schemes.
• Property mix: When considering the 109 schemes: 68 schemes (62%) explored the feasibility of serving a mix type of buildings (domestic, commercial and/or industrial); 29 schemes (27%) explored the feasibility of serving domestic buildings. Ten studies (9%) explored the feasibility of serving commercial buildings. Two studies (2%) explored the feasibility of serving industrial facilities.
• Main heating technologies: 33 schemes were based on a gas-fired combined heat and power (CHP) system; 22 schemes were based on biomass boilers; and 13 schemes did not specify a proposed primary heating technology.

Key barriers

Semi-structured interviews with eight key stakeholders identified the key barriers that the stakeholders believed to be restricting the development of district heating schemes in Scotland, including:

• high capital costs and long payback periods of district heating projects;
• high demand risk (payback period being dependent on consumer demand);
• lack of district heating technical knowledge and skills in the industry;
• lack of investment interest and lack of investor involvement in the process;
• lack of realistic business cases and delivery/procurement models; and
• lack of stakeholder and consumer awareness and lack of stakeholder buy-in.

Recommendations

• The Scottish Government may wish to consider carrying out further research on the financial and technical shortcomings identified in individual district heating network projects. This in turn could provide the opportunity to validate the key findings of this report.
• The Scottish Government may also wish to consider investigating ways in which district heating feasibility studies (e.g. particularly those studies that receive government support) can be analysed and reported in a consistent manner to enable a greater level of cross-comparison between schemes.