Scotland launches green heat challenge


04 October 2022

Scottish Enterprise has launched a Green Heat Hub Grand Challenge to encourage innovation around the green heat solutions of the future, from heat pumps to battery technology, that will lead to the creation of a centre and focal point for collaboration.

The project invites consortia groups across industry, academia and the third sector to submit proposals for a Green Heat Hub that will position Scotland as the leading location in Europe for green heat manufacturing and Stage 1 pre-proposal applications are open until November 18.

Demand for greener heating is rising and decarbonising heat is a key priority in achieving net zero targets worldwide to address the climate emergency, with heating accounting for more than 40% of global CO2 emissions, according to the World Economic Forum.

Scottish Enterprise director of economic opportunities and climate, Suzanne Sosna, said: “The Green Heat Hub Challenge will create a centre of green heat excellence and help us find new ways of decarbonising our heating systems.
“The challenge is one of several ways we are accelerating progress in this area, including initiatives like HeatSource, as well as through manufacturing, supply chain development, innovation, and investment support. 

“Collaboration on greener heating solutions is vital as we meet the rising market opportunities, whether that is around heat pumps, networks or local energy systems, especially at a time when we are also facing rising heating costs, security of energy supply and the impacts of climate change.”

Recent announcements across Europe have shown billions of pounds invested in manufacturing heat pumps to meet the increasingly growing market and UK innovation agency NESTA has produced a report showing that heat pumps could be greener and cheaper in Scotland. 

Energy transition consultants at Delta EE have noted that 2021 was the most successful year for domestic heat pump sales in Europe and this trend is set to continue and highlights the growing demand for green heat solutions. 

Scottish Enterprise, alongside its sister agencies and Scottish Government, have created the Green Heat Hub Grand Challenge to provide a base for collaboration and build an attractive asset for investment in Scotland.

The project will look to: 

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  • Develop a centre for collaboration for companies and customers
  • Act as a window of green heat solutions of the future
  • Anchor companies in Scotland through support for their growth ambitions
  • Provide a focal point for inward investors and drive industry leadership

Scotland is committed to reduce emissions by 75% by 2030 and to reach net zero carbon emissions by 2045. Heat accounts for 52% of Scotland's energy demand and is the single largest source of carbon emissions in Scotland - at around 41%.

At least £33 billion of investment will be needed to meet Scotland’s 2045 target. The Scottish Government has kick-started investment in this transition with £1.8 billion of capital funding over the next 5 years. 
By 2030, it's estimated that 28,000 jobs could be created by the shift towards low carbon heating, with net additional jobs of 16,400.

Zero Carbon Buildings Minister Patrick Harvie said: “It is vital that we cut emissions from our homes and buildings to deliver on our climate obligations. We can do this in two ways: installing more green heating systems and improving energy efficiency. It is an enormous task, and one that will require us to, collectively, find ways to increase the pace and scale of progress whilst ensuring we get the transition right for every community. 

“If we invest wisely, it will be good for the planet, good for energy bills, and also a substantial opportunity for our economy. We need champions within industry to grasp hold of this opportunity and I look forward to the Green Heat Hub Grand Challenge inspiring further innovation and collaboration to help ensure Scotland is at the centre of the green heat revolution.”

The Grand Challenge will follow a two-stage application process: consortia will submit a pre-proposal application. Successful applicants will then be invited to the full proposal stage, with a grant of up to £75,000 to support development costs.

Decarbonising heat will play a crucial role in meeting Scotland’s net zero targets. It's also a growth opportunity for Scottish businesses and Scottish Enterprise has also recently launched a new Green Heat Accelerator, a three-month training course designed to support ambitious businesses involved in decarbonising heat.

Scottish Enterprise has also published research on the key technology and innovation needs for low carbon heat.