Scottish Renewables, the green energy trade body, will underline the massive economic potential of green heat in Scotland at its annual conference tomorrow with the publication of a new independent report into the renewable heat market in Scotland.

But the report is accompanied by industry warnings that red tape could stop the new industry in its tracks.

The research, conducted by IPA Economics, reports that a massive growth in the installation of technologies like wood fuel, heat pumps and solar technology will be required to meet Scottish Government 2020 heat energy targets. It concludes that investment would need to be in the order £2.5bn between now and the end of the next decade and will create or secure 2,000 jobs in Scotland from sales, installation and maintenance alone.

Jason Ormiston, Chief Executive of Scottish Renewables, said: "The challenges to deliver green heat targets are considerable but if we are able to generate 11% of our heat from renewable sources by 2020 then the economic benefits are significant.

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"The IPA Economics report goes to 2020; Scotland will need to go further beyond this date and so the long term economic benefits will be even greater."

In launching the market report, Scottish Renewables has warned that this potential will be lost unless local authorities and the Scottish Government remove the red tape slowing the uptake of renewable heating, in particular wood fuel biomass systems and air source heat pumps.

Local authorities such as the City of Edinburgh Council have had moratoria in place on the approval of wood fuel biomass heating systems over fears about particulate emissions, despite a recent Scottish Government study showing emissions at levels of around half of what had previously been believed and new robust guidance being issued for local authorities to assess the location of systems in sensitive urban areas.

Air source heat pumps were also recently excluded from Scottish Government measures to make technologies exempt from the requirement for planning approval, despite their inclusion in an imminent Scottish Government fuel poverty scheme.

Alice Waltham from IPA Economics said: "Our research has indicated that, based on current installed cost for renewable energy technology, reaching 11% renewable heat by 2020 could generate a turnover of £2.5 bn in the renewables sector (excluding the biomass supply chain)."

(GK/JM)