Building-level energy storage allows consumers to capture cheap electricity or heat when it is available and store it for later use.

This report examines the extent to which such technologies could help to reduce household energy costs when installed alongside zero-carbon heat technologies.

We also present results from a simulation exercise to determine the cost effectiveness of electric batteries, heat batteries and thermal storage installed alongside heat pumps.

The key findings show that currently there is little commercial benefit to the householder installing storage without localised electricity generation. However, the potential role of domestic storage in smoothing peak demand periods on the grid indicates that building-level storage will be required to support the decarbonisation of heat through electrification.

Recommendations
  • Once published, the monitoring results from ongoing projects with building-level storage should be reviewed for evidence of financial savings for consumers. This includes the UK Department for Business, Energy and Industrial Strategy (BEIS) electrification of heat pilot, OVO Energy’s trial with Powervault and various project that are funded by the Scottish Government.  
  • Ensure the Distribution Network Operators (DNOs) in their transition to District Systems Operators (DSO) actively provide support for local and national flexibility markets by engaging with aggregators when planning for the increased future demand on the grid.
  • Where feasible, installers and property owners should be encouraged to pair thermal storage with heat pumps. Although there is limited evidence of the direct financial savings that this can provide for consumers, the benefits of improved system efficiencies, heat pump longevity and the ability to ease pressure on the grid during peak periods will provide indirect financial benefits.
  • Grant funding or some form of financial incentive may be necessary to encourage the installation of thermal storage with heat pumps.
  • Further research is conducted to understand what the identified savings from existing and ongoing research might mean for rates of fuel poverty.

Erratum: Please note that one sentence in the executive summary of this report, related to the middle scenario, has been updated in June 2023 to reflect the data and conclusions.

To meet the Scottish Government’s ambitious climate change targets, there will need to be a significant increase in the deployment of energy efficiency and low carbon heat measures in domestic and non-domestic buildings in the next decade. To deliver this, the supply chain in Scotland needs to be fit-for-purpose in terms of having the capacity and skills to deliver this scale of technology deployment.

This report reviews the current capabilities and skills along the supply chain of the energy efficiency and low carbon heating technologies in Scotland, identifies the skills gaps and analyses the potential options to fill these gaps to meet the targets set out in the Heat in Buildings Strategy.

Future workforce requirements

  • To meet the Scottish Government’s statutory climate change targets, we estimate that the peak full-time equivalent workforce required for energy efficiency and low carbon technologies by 2030 would be between 4,500 to 5,400 installers of thermal insulation, assuming a linear growth in the number of installations.
  • The study explored three scenarios of heat network uptake, alongside heat pumps and direct electric installations. The middle scenario requires 4,600-11,400 heat pump installers, 320-4,000 heat network installers and 530-1,100 direct electric installers.

Other key findings

  • The view of the respondents was that there are current shortages in the energy efficiency and low carbon heat workforce, which adds to the challenge of attracting the required future workforce numbers.
  • Respondents considered the landscape of different funding sources to support upskilling / re-skilling in the energy efficiency area very complex to apply for. Smaller businesses reported finding it a considerable challenge to find the most appropriate funding for their needs and to pursue with the application process. 
  • Employers will need to have the confidence to invest in their future workforce as they will need to play an important part by bringing in new workforce to this field. For certain roles the route in is to take on apprentices and offer them employment after completing their apprenticeships.
  • There is also a need to attract and upskill new entrants for roles which do not have an apprenticeship route. Ways to bring in more new entrants will need to be looked at and companies need to be prepared to invest in training up these new entrants.

Heat pumps are an efficient way of producing heat from electricity; they operate by capturing the latent heat in the air, ground or water and using it for heating.

Heat pumps are expected to play a significant role in decarbonising heat in Scotland; the Climate Change Committee has described them as a ‘low-regrets’ option, and they feature prominently in Scotland’s Draft Heat in Buildings Strategy.

However, heat pump efficiency can vary across the heating season and in different buildings, meaning the costs and impacts on wider energy systems depend on the context.

This desk-based review looks at evidence on how heat pumps currently, or are likely to, perform in practice in Scottish buildings. The research identifies best practice relevant to Scotland and gaps in the available evidence.

The scope of the research was for both domestic and non-domestic buildings. However, the majority of the relevant datasets relate to domestic settings.

Key findings
  • Poor heat pump performance is most likely to arise due to poor design and specification. This means appropriate design and installation are the most important considerations to ensuring heat pumps perform well in Scotland.
  • Heat pumps are a mature heating technology used in several European countries, including countries with colder winters than Scotland. The review found no evidence to suggest that heat pumps could not operate effectively or efficiently in Scotland. 
  • The review suggests there is occupant satisfaction with heat pumps.
  • There is evidence that heat pump performance could be maximised by building confidence in heat pump technology among consumers and the supply chain. 
  • Where running costs were monitored, heat pumps were cheaper to run than previous electric, oil or LPG heating systems and are a key outcome for occupant satisfaction.