SCOTLAND could become the first part of the UK where a new licensing system will be used to encourage people to move away from using gas central heating systems.

The Scottish Government will introduce plans for regulation and a licensing system for district and communal heating – in a bid to accelerate their use across the country.

Rather than use traditional gas central heating, district and communal networks provide heat from a central source using insulated pipes to homes and other buildings. The idea has the potential to reduce or remove emissions through heating buildings across Scotland.

The Heat Networks (Scotland) Bill, introduced by Transport, Infrastructure and Connectivity Secretary Michael Matheson, would set up a regulatory framework for the projects.

If passed, the legislation would enable more networks to be built to heat small communities, lowering the need for less efficient single boilers along with the possibility of the networks being powered by renewable sources.

The initiative generates heat at a central source, with either hot water or steam transported to homes and other nearby buildings using insulated pipes, according to District Heating Scotland.

But district heating systems are regarded as businesses and taxed more than the utilities which supply gas or electricity to personal boilers.

Energy minister Paul Wheelhouse said there are currently more than 800 networks across the country but the Bill will allow for further expansion.

The Scottish Government believes the passage of the Bill would help to meet climate targets set out in the Climate Change Act last year, which aims to reduce greenhouse gas emissions to net zero by 2045.

Mr Wheelhouse said: "We are facing a global climate emergency and one of the major challenges is reducing and ultimately stopping the impact from heating our homes and buildings, which is where more than half the energy we consume as a society currently goes.

"Heat networks have huge potential to reduce that impact by providing more efficient, environmentally friendly solutions.

"The Scottish Government is determined to unlock the potential for that sector wherever possible and stimulate local jobs across Scotland in the process of delivering projects."

He added: "We have done much to support the sector in recent years - there are currently more than 830 networks operating in Scotland, including significant projects we have supported in locations such as Glenrothes - but the sector is currently lacking a coherent regulatory framework and the Heat Networks Bill therefore marks the beginning of a transformational change as we seek to create a supportive market environment for the necessary expansion of heat networks.

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"The benefits of heat networks are not only environmental, they can save space, remove combustion risk within buildings, and have been shown to save householders and businesses up to 36 per cent in fuel costs, with consequent benefits for tackling fuel poverty and reducing costs faced by businesses and public bodies."

Under the draft legislation, a local authority could designate an area that is “particularly suitable” for the construction of a heat network – while Scottish Ministers could also designate an area for the technology to be used.

The introduction of the Bill comes as the Scottish Government is expected to pass its budget on Thursday with the support of the Scottish Greens.

The budget features £180 million of funding to decarbonise heating across Scotland.

But the Scottish Greens have called for ministers to be bolder through the proposals.

Scottish Green energy spokesperson, Mark Ruskell, said: “I welcome some progress on heat networks, but this bill needs to be bolder if it is going to be an emergency response to the climate crisis. Decarbonising the heating of our homes must now be an urgent priority for the Scottish Government.

“District heat networks are not a new idea. Copenhagen has been doing it since the 1970s, and new networks are being rolled out across the Netherlands. The Scottish Government has some catching up to do.

“Four out of five Scottish households currently use gas central heating. Not only are we building more, there is so much we can do to make our existing buildings more efficient. We managed to extract more money from the Scottish Government for energy efficiency in the Scottish budget, but there needs to be more ambition going forward.”

Citizens Advice Scotland (CAS) has welcomed the proposals, having previsouly called for the regulation of heat networks.

CAS chief executive Derek Mitchell said: “The Heat Networks Bill is an important step forward in the bid to tackle the climate crisis and establish oversight of what currently is an unregulated sector.

“Although there are benefits of having your home on a heat network, without a regulatory framework we do see examples of Scottish consumers not getting a fair deal.

“Currently, if your home is on a heat network you cannot switch energy supplier, you might pay your heating bills to an unregulated management company or housing association and you might have to pay for maintenance costs.

“This leaves people without many options and without clear routes for redress when something goes wrong."

He added: “So although this Bill is welcome, CAS will also be calling on the UK Government to strengthen consumer protection, which is currently a reserved matter, as part of its current consultation on heat networks and we will continue to work closely with both governments as this legislation progresses for the benefit of all consumers.”