1. Opportunities in Low Carbon Heat Prof Sir Jim McDonald Principal & Vice Chancellor, Strathclyde University and Scottish Enterprise Board Member 18 th November 2014

2. Summary of Presentation - Opportunities in Low Carbon Heat Drivers for Change Strengths in the Scottish Low Carbon Heat sector Opportunities for Businesses International Opportunities Emerging Opportunities Current Developments

3. Drivers for Change - Technological BiomassHeat Pumps Energy from Waste

4. Drivers for Change - Legislative EU Priorities - EU Energy Efficiency Directive - Obligation on each Member State to set an indicative national energy efficiency target - Energy Savings Opportunity Scheme - Government established the Energy Savings Opportunity Scheme (ESOS) to implement Article 8 of the EU Energy Efficiency Directive (2012/27/EU) - Article 8 of the EU Energy Efficiency Directive requires all member states to introduce a programme of regular audits for ‘large enterprises’. I.E. Non SME’s Scottish Government - Scottish Planning Policy: Issued June 2014 – Guide development to appropriate places - National Planning Framework 3 - Build national and local heat maps into development plans

5. Drivers for Change – Financial Renewable Heat Incentive (RHI) for commercial applicants in operation since 2011 Since April 2014, Domestic Renewable Heat Inventive has been in operation In Scotland, 1,596 Domestic accreditations to date, in 6 months of the scheme (Includes some historic installations) Biomass669 Air Source Heat Pump404 Solar Thermal300 Ground Source Heat Pump223

6. Drivers for Change – Commercial & Customer Led High Energy Bills Fuel Poverty Consumer Choice – Flexible fuel sources Smart Energy Approach Demonstrate best Practice in Linkages of district heating schemes Development of the ESCo – Energy Services Company model More certain Procurement about total lifecycle costs Potential to attract other funding mechanisms such as ECO (Energy Company Obligation)

7. Strengths in the Scottish Low Carbon Heating sector Mechanical and Engineering Innovation that continues... A diverse Industrial Sector Recent Heat Mapping – Work with Local Authorities Renewable Heat Incentive Strong Government Support – Both UK and Scottish Strong Public Sector support Network Strong University Sector BUT Need to adopt a more collaborative approach, working in partnership with regulatory bodies and academic institutions

8. Opportunities for Businesses Definition of Low Carbon Heating / Cooling & Supply Chain Opportunities The four clusters Heat GenerationCoolingEnergy ManagementHeat Distribution Heat pumpsControlsDistrict heat Efficient heat / fossil fuels (eg CHP / fuel cells)SensorsHeat storage Geothermal Heating, Ventilating and efficient air conditioning Heat modellingWaste heat recovery Burning organic matter, biomass Refrigeration Energy monitoring- Solar thermal - Demand management-

9. Opportunities for Businesses – Analysis of Research Purpose: To identify market opportunities arising from the global growth in demand for related goods, services and technologies (in low carbon heating / cooling) and to assess the capabilities of firms in Scotland to exploit these opportunities We Identified 227 low carbon heating and cooling companies, 76 of which completed the survey, equivalent to 33% return rate Majority of the companies were involved in design and installation of equipment although there was also a significant manufacturing base Heat recovery, storage, heat pumps, passive heating and cooling, bio fuels and fuel cell companies present Strong core of companies in the heat control, sensors and monitoring areas Companies in solar and biomass tended to be predominantly installation

10. Opportunities for Businesses – R & D Spend

11. Opportunities for Businesses – Growth in Recent Years

12. Opportunities for Businesses - Export Markets

13. International Opportunities Address New Market Opportunities Exporting target market opportunities – identified through Innovas Report and then Delta-EE analysis Markets with drivers are: - France – Leading country for heat pumps and has strong Building Regulations - Sweden – District Heating and Renewable Heat - USA – State Led Incentives driving the market - China – Air Pollution and Energy Efficiency Developing a Market proposition for exporting products, services and technologies Attracting Investment to Scotland CONCLUSION – Focus on Domestic Opportunities with niche export opportunities

14. Emerging Opportunities Current Work by Scottish Enterprise’s Renewable Energy Team Phase 1 – Covers: – Energy Storage – Biomethane Injection to the Gas Grid – Smart Thermal Grid Phase 2 – Covers: – Analysing Heat Scenarios to estimate Future Deployment Rates – Description of each Technology and Market Drivers such as: Heat Pumps, Solar Thermal and District Heating

15. Current Developments -Integration of 35 university buildings in multiple phases Strathclyde University -Cost £16 million + Won £8 million in funding from SFC -Delivered 2015 to 2018 -Catalyst for local heat network partnerships -Institute for Future Cities o Integrating the DH system with the University’s research agenda o Urbanite project - demonstrating and research low carbon technology. Sensor systems. Optimising energy production and demand. o City Observatory – capturing, joining together, visualising, multiple urban datasets. Enabling the city to be understood in new ways. Platform for Urban Energy Research e.g. advanced bio fuels o Platform for Urban Energy Research e.g. advanced bio fuels -Platform for Urban Energy Research e.g. advanced biofuels -Sustainable Facilities Training Centre

16. Current Developments