Talk title: A Just Transition & Lothian Heat
Speaker: Simon Kerr, SAV Systems
Event: CIBSE Scotland Conference 2026: Heating the Future, 27 May 2026
Video: https://youtu.be/6oPhOtOXsi4

[00:00] Thank you, CIBSE Scotland, for allowing me or allowing Martin Hayman, who was meant to be here, to tell you all about Lothian Heat. And sadly, he couldn't make it. So in his infinite wisdom, he suggested that I could step in. And I'm going to try my best. He's given me his slides, which I've added to it. And you'll be very easy to tell which slides I've added.

[00:36] But I wanted to talk about heat networks. And in the policy workshop that we sponsored, the kind of just transition, how do we create heat? People can afford, if we can afford it. If we can't do that, no one's going to connect. And we're just flogging a dead horse. So creating a just transition is, I think, is core to a successful heat network industry.

[01:00] Most of you probably know SAV. That's us. We are aligned a lot with Danish manufacturers. The two owners of SAV are Danish. They grew up in Denmark. They moved over here in the early 90s. So started the company SAV in 95. I joined in 2006, when SAV was the first company to start a company in 95. I joined in 2006, when SAV was the first company to start a company in 95. I joined in 2006, when SAV was the first company to start a company in 95. I joined in 2006, and part L kicked in. And they quickly realized the way that the UK was trying to regulate to low carbon.

[01:29] Denmark did it in the 70s through necessity, because 90% of Denmark's energy was imported. And so when OPEC cut the oil, Denmark as a country was in trouble. And so it created a market for manufacturers to produce energy-efficient products. And solutions and so we were in the lucky position that we could cherry pick the ones that we wanted to work with and those are some of them up there and I'm not going to turn this into a sales pitch so I'm not going to go through each one but interestingly that one of the owners lars and the reason where the east lothian question and that I coined that phrase the east lothian question some of you may remember the west lothian question with the political question about so the east lothian question is this a way forward for decarbonizing heat at a price people could afford and when we were on a train trip we

[02:29] Were going around with the danish board of district heating and we're on a train trip with a guy called cern from covey who's now opened up in glasgow covey are an engineering consultancy that specialize in energy danish and danish board of district heating with cern and lars and the east lothian question is this a way forward for decarbonizing heat at a price and traveling between newcastle to edinburgh then edinburgh to glasgow and it was a train trip between edinburgh and glasgow that cern said what's the distance between the two cities I've said oh that's 35 40 miles maybe I mean oh perfect for a heat network you should connect them and we thought who is this crazy dude I mean we have a heat network at edinburgh st james and we have a heat network at the top of leith walk at engine yard which is 400 homes or so in each and retail and you get no chance of connecting those together so the thought of connecting cities so then he said no this is this isn't crazy and he sent us through the map of the copenhagen heat network and we superimpose that onto the central belt and if you shift it across a little bit it connects kilmarnock glasgow sterling

[03:30] And edinburgh that's copenhagen the copenhagen heat highway transmission lines heat transmission pipe we'll call it what you want it heats 98 of the greater copenhagen area so that's what we could use and so I started to think we created a brochure and part of my clean edinburgh forum one of the guys in there was I think it was daniel friedrich was speaking with martin hayman martin hayman was a geologist was looking at mine water at blind wells all the mine water coming out that could be used he said can I give this to martin gave it to martin and then martin said oh my god that heat at dumb bar the energy for waste power at the bar that we have said we cannot use for the last 10 years we can use that if we have this and so we're going to be able to use that and we're going to be able to use that and we're going to be able to use that and we're so that got them thinking.

[04:16] And now get into Martin's theory. So the Scottish heat map shows you where the heat demand is. The heat demand is in Edinburgh with various pockets across Midlothian and East Lothian, but the bulk of the heat demand is in Edinburgh. The three local authorities kind of connected Midlothian, East Lothian and Edinburgh all created their alleys and Hilary very eloquently explained the evolution of their network, and we've got the copy of the Turner Towns NWSP, the kind of re-looking at the zones and rethinking and was linear heat density the be-all and end-all, and it is for clustering heat demand but not for heat supply.

[05:00] Midlothian, their heat alleys also included heat networks. And what I liked about East Lothian is 21 years to net zero. That was 2024. We're now 19 years to net zero. And we haven't put a single pipe in the ground yet. So we're on a ticking clock. It keeps coming down and down and down. We're wasting year after year after year. We just have to get on and do this at some point. Now, talking about, again, Haseen mentioned about the feasibility and all the dials we go through.

[05:29] Well, Martin, we introduced Martin to a Danish consultant called Vian Mahou, and it was, and Lucas, you'll probably tell me I've pronounced that wrong, as I always do. But they were then employed to do a feasibility study for East Lothian. And that's it. And it's very favourable. There is a, you can download a copy.

[05:56] But if we get into, so Edinburgh we've touched on. Hilary's shown us the latest kind of thinking. And this is part of the thinking as well. This is a great step forward because now Edinburgh are thinking, okay, maybe the heat sources, we're going to struggle for heat sources being a built-up city. Maybe we should look a little bit further afield. And you've got Shaw Fair, the red dot at the bottom, and then the big red dot on the right is Kakenzie. Now that has got a potential of a sea source heat pump using the pipes from Kakenzie Power Station, four metres wide.

[06:29] Dave Pearson, who some of you may know, Star Refrigeration, Star Renewables, did the river source heat pump on the Clyde, has said that there's enough volume of water that can be taken for the sea source. From those pipes to pretty much heat Edinburgh just with that one source alone. So that's the potential. Now, there's also a hell of a lot of electricity coming into Kakenzie and a data centre is coming into Kakenzie, massive one.

[06:56] And so there's a lot of this heat. So there's, people always say, where's the heat coming from? There is an abundance of this heat available out there if we have the pipes in the ground. Midlothian, a slightly smaller county, smaller networks based upon L. Not an awful lot of heat sources, although there is a data centre at Easterbush and potential mine water. East Lothian, East Lothian is, by 2030, East Lothian will be landing 6.2 gigawatts of electricity onto its shore.

[07:35] And to put that into perspective, Denmark currently uses 7 gigawatts of electricity. So East Lothian, a population of 100,000 against a country of 5 million, has got the same electricity access. So we have the potential in East Lothian and further afield in Scotland to utilise the otherwise curtailed electricity that we are paying to turn off to turn it into something good for fuel poverty, for energy security, to get rid of these energy spikes.

[08:05] And that's the best is that and the abundance of waste heat at Dunbar from tarmac and the energy for waste plant. But those two alone throw away more heat than the gas residential demand in East Lothian every year. And so if East Lothian are trying to look you in the face and say, well, we're trying to do all our best for fuel poverty, but we'll let those guys throw away all your heat that you need for a year. Well, it is, there's something not squaring up. We've got to start thinking about this on a long-term basis, on a just transition basis and a common sense basis.

[08:37] Because Einstein said that energy couldn't be wasted or destroyed, just converted from one to another. We can't just keep throwing, turning electricity off and throwing heat away. Let's turn it into heated water and get it into the pipes and into the ground. And what I like, this is, we've seen Copenhagen, this is Tvis. And Tvis again in Denmark is a transmission pipeline. And it's four municipalities own the transmission pipeline and they sell heat to nine authorities and some private.

[09:11] And what it's a hundred, it says 123, it's not 130 kilometers long. And what I like about this, and I'm going to put my glasses on here because I'm trying to play. I think this looks a little bit like the Firth of Forth in East Lothian. So just bear with me a little bit. Vamdrup, Vam, Vamdrup, Dumb, Dumbar, maybe. Colding, Haddington.

[09:41] Middelfart, Midlothian, Frederica, Edinburgh, Garusland, Garuslund, Grangemouth, maybe. Yelling, Stirling, possibly. And I've probably ran out there. But you can see what I'm kind of, it's visually, it looks a little bit like the Firth of Forth and East Lothian.

[10:08] And they use, they use their, all the waste heat that they throw away and they put it into a transmission pipe. And each substation, each local authority that takes money from the, or takes heat from the transmission line is contracted to buy a certain amount of heat every year. If they need more, they pay extra. If they need less, tough, you're contracted to that level, it's a minimum level. And that gets the money into the transmission line for the four municipal, municipalities own.

[10:34] And so that's the model of ensuring that all public buildings, all new buildings, any planning permission for data centers. Yeah, you're coming here, but we're taking your heat. There's no, there's no yes or no, or that's it. And the data center love it. Hydrogen companies love it. The industries love it because their environmental social governance, their ESG is good. They're doing social good. Their marketing department love it because we're doing something good for the, for the people.

[11:02] So there's a lot of, to be said for this sort of model. Right. So the South East Scotland Regional Heat Network vision, is as you see, now that doesn't go up to Grangemouth. Although I was speaking to, speaking to a chap today, I'm not going to say his name, but he sits on the Grangemouth body for a body there that they may be starting to think about their heat and not just throw it away, which would be very good because Grangemouth throws away more heat than probably Edinburgh needs.

[11:37] And so again, getting in the mentality, if the pipes were in the ground, we wouldn't be throwing it, we would be using it. So how do, you know, let's get the pipes in the ground. If we look a little bit closer at East Lothian, and I have talked about Virador. So Virador is a energy for waste plant in Dunbar. It was built to take all of Edinburgh's waste. And beside Virador, you have Tarmac, which is Scotland's last cement factory, cement works.

[12:08] They've got their quarry that they're digging out. They throw away, like I said, more heat than the residential gas demand in all of East Lothian. And the other nice thing about that is you've got Tornes, not the nice thing, you've got Tornes power station right beside it. It's going to be decommissioned eventually. It keeps getting delayed, but eventually. Otherwise we could have had a hell of a lot of heat from the cooling from Tornes. There's a data centre going into Dunbar that's going to, a relatively small one, that we're looking then to feed across the A1 into a whole, 800 homes.

[12:40] We've got home holiday, static caravans that are currently on LPG. And they have said, yes, we will take your heat. So we got, so that's the, it's starting. The reason why I mentioned that the Virador takes all Edinburgh's waste and burns it and turns it into electricity and heat, a CHP plant, is that our fantastic friends Vattenfall and Schoffer have got an energy for waste plant that was built on the outskirts of Edinburgh to take all of East Lothian's heat.

[13:05] So you've got the lorries coming from Edinburgh down to East Lothian, passing the lorries from East Lothian. Going up to Edinburgh to give the, which always seemed slightly odd. But the data centre in Cakenzie, coupled with a sea source heat pump, will allow the network expansion into Mid Lothian and into Edinburgh.

[13:30] How much Edinburgh wants or needs, it's almost they can have as much as they want or need. As long as the pipes are in the ground and everything is connected. Now, I talked about the feasibility study. And this is, this is one of the pages from it. The heat price for the heat in the transmission pipe is four pence a kilowatt-hour, which is blinking good.

[13:57] However, once you, so once you get into the distribution pipe work, when there's all the small connections, all the small holes, it goes up to 14 pence a kilowatt-hour, which isn't so good. That 14 pence, however, is based upon electricity. This is the 20 pence a kilowatt-hour, which is quite high. And it's very conservative. And no funding. No grants. And so, over the years, there's going to be, and the interest rate, the counterfactual for heat pumps is more expensive than the 14p.

[14:29] So if you're just looking at purely, we must decarbonise, it's that or that, then you would choose the heat network. Because the counterfactual for upgrading electricity grid to take the heat pumps, the maintenance of heat pumps, and the renewal of a heat pump after maybe 10, 15 years. So this is, this is looking at the cost over a 40-year period, I think it was. So the capital upfront cost of the pipe work is spread out over that long period of time.

[15:00] But that's the counterfactuals. The price of gas, we think, can only go up if we're serious about getting off gas. And the price of electricity for energy centres, the funding for national infrastructure will all come and put downward pressure on that price. So that was the feasibility. And if you compare it, like I said, to a counterfactual, then it becomes a no-brainer.

[15:27] From a national grid and national infrastructure point of view, the reason why heat networks are the golden child, the facilitator, the... The thing that will make everything work is that they can flex. So here's an example of the wholesale electricity prices on the 30th of April to 1st of May. So in these examples, when it's blue, you get grid balancing. And again, this is a very common thing in Denmark.

[15:53] So you've got massive electric boilers. First of all, you need a massive thermal store. I mean massive. Whatever you think is big, you double it. Big. The one in, the proposal for Dunbar is the quarry. That they're quarrying the land. I'm so annoyed I have to make the cement. That, on its, if we used all of it, would be the largest thermal store in the world. The current largest thermal store in the world is in Finland, in a village, a town called Vantaa, something like that.

[16:24] And it's underground caverns. 1.1 million cubic meters. And it takes heat from data centers and. It can heat the town of 30,000 homes for one year. With no input. Now that's long-term energy storage. Battery long-term energy storage is eight hours. So the benefit to the grid of being able to store heat whenever you want, and store it for as long as you want, is the thing that makes heat networks, the national infrastructure, missing piece of the jigsaw.

[16:58] So you have your balancing when it's minus. When it's green and yellow, you have your heat pump generating heat. And when it's red, you stay off and you use your thermal store. You deplete your thermal store. And that way, you're creating heat at the cheapest possible price. And it's the dumb old thermal store that makes that possible. So it's technically bloody simple. And in the era of global boiling, why are we still freezing in our homes?

[17:28] This is, this is an advert we took out on Private Eye for the political world. Because we think it's a political thing. Because we think it's a political disgrace that we're all still freezing and fuel poor in our homes while heat, if it was food that these industries were throwing away, there'd be a national uproar. But nobody cares about heat. And that's what we're trying to emphasize, that we have a massive resource here that we're allowing to throw away and dissipate.

[17:55] And keep it simple, stupid. This may be controversial. I don't care. But I think any long-term just transition, you have got to make it as simple as possible for the person who owns the device. The person in the household that looks after it. The person that's got to service it. The person that's got to replace it in 10, 15, 20 years.

[18:20] It's got to be simple technology. And that's, I think, why in Denmark, heat networks are now serving 70% of the population. And in 10 years' time, or 20. 30, 80% of the population. Why Copenhagen is 98% of the population. Because it's just simple for people. People love it. It's easy. I don't know whether our Danish friends here have got holiday homes on the islands, but I know some that do.

[18:47] Which have heat pumps. And you ask them, heat pump or heat network? And it's heat network. Every time. Because they can fix that. It's a strainer. If it gets bit blocked, it's a strainer. It's a, if it's a component change, it's a plumber. We've got plumbers. There's no skill shortage in plumbing. There's no skill shortage in plumbers. So that's the keep it simple, the just transition. That's why heat networks and the likes of an East Lothian heat highway, the East Lothian question, which is why I think it's, I think it's the only way we can do it.

[19:23] So critical infrastructure by 2045. That's the plan. And I was meant to be talking about Lothian heat. So here we are. If that, if that Lothian heat, I made this as my first ever QR code that I made on Google. I asked Google how to do it. And that's, they've come up with this. I tried it at home and it works perfectly, but that takes you to Lothian heat's website, which is coming up shortly anyway.

[19:48] But if anybody wants to take a photograph of that and tell me how wonderful it is, that would be, that would be great. But so Lothian heat's motto is no heat is wasted. No home is cold. Nobody gets left behind. Establish heat. Establish in 2025 as a community interest company, a CIC. So not for profit. Which East Lothian council weren't entirely happy with. They have now got a memorandum of understanding as I believe Edinburgh has got a, an understanding to recognize and talk with Lothian heat about how to do this.

[20:22] They have their first employee. Which has come from funding from a wind community benefit from Penn-Caitlin. Because there's only so many scout huts that can get painted and playgrounds that the kids can play in. So they said, do something about our heat please. So they're taking, they've given them their wind community fund money and given it to Lothian heat. And they can, they've now employed a person. So their priorities are heat network projects where the heat is readily available.

[20:47] So it'll start in Dunbar where there's, we stop throwing away all this heat. We'll start using it. So it starts in Dunbar. It could start with Shaw Fair, with Vattenfall. Possibly feeding into, to that side of Musselburgh. Who knows? It's possible. And develop the business case for the regional supply transmission network. So finally working with Transition Finance Scotland to unlock investment. And we talked about this in policy.

[21:12] We've talked about it before. Long term low interest fund. 40, 50 year. Patient capital. Low interest government backed loans. So the hardest part of a heat network journey is the start when there's no customers. It's the highest risk. So you pay the highest interest. If we can get money, government backed money at a low interest to start, then we can refinance that. Because we can now finance the first phase because there's customers.

[21:40] So we can get cheaper loan on the private side. And we can move that, refinance that, move that to the second phase. And use that one lump sum of maybe a couple hundred million all the way through. So that's the, that's the idea. And pretty close. That's it. Let's create a just transition. Keep an eye on the, on the just I think is the only way we're going to make this work.