John Laing and the Green Investment Bank (GIB) are to jointly invest in a new £74m biomass power plant in Speyside – to be provided by Estover Energy.
The Speyside project is the first of a portfolio of similar plants that Estover is developing around the UK.
The new wood-chip (biomass-burning) combined heat and power (CHP) plant near Craigellachie, Moray, will generate 87.4 GWh per annum of renewable electricity – enough to power more than 20,000 homes. It will also generate 76.8 GWh per annum of renewable heat.
Together, the carbon saving equates to 42,000 tCO2e per annum – the equivalent to taking more than 18,000 cars off the road. The project will create 123 jobs (100 in peak construction and 23 permanent) and support one of Scotland’s most important export industries – whisky.
The new CHP facility will contribute to reducing the cost of energy at The Macallan distillery by providing around 90% of all of the steam needed in the distillation process. By using biomass to generate heat instead of natural gas, the distillery will reduce its greenhouse gas emissions by over 17,500 tCO2e, equivalent to taking almost 8,000 cars off the road.
John Laing and GIB intend to invest £26 million in the project. The remainder of the funding, in the form of debt, will come from a bond to be listed on the London Stock Exchange. When issued, the bond will be guaranteed by Infrastructure UK, part of HM Treasury. GIB and John Laing’s investment is conditional on the successful conclusion of the bond process.
The project is being developed by Estover Energy, an Edinburgh-based renewables company specialising in developing biomass CHP projects. The plant will be fuelled with sustainable forestry by-product sourced from the local area, one of the UK’s most productive forestry areas.
A consortium of local growers and forest industry suppliers – including Stobart Biomass Products Ltd. and UPM Tilhill will supply the plant.
UK Business Secretary, Vince Cable – to whom the Edinburgh-based Green Investment Bank reports – said: “This investment in Speyside will not only help secure jobs, boost a vital industry and support the local supply chain but also generate renewable energy for homes in Scotland. Through our industrial strategy we are working in partnership with business to give companies the confidence to invest, securing green jobs and a stronger UK economy.”
Max Aitken, Joint Chief Executive, Estover Energy, said: “This is a great step forward for Estover. To attract such high-quality investors for our first project is a ringing endorsement of the experienced team we’ve built up, and we look forward to financing our wider portfolio over the coming months.”
Marcus Whately, fellow Joint Chief Executive, Estover Energy, added: “The Speyside project is the first of four similar projects that bring together some of the most respected names across several industries. The result is low-carbon energy for British industry, creation of rural jobs, and a major infrastructure investment for this part of Scotland.”
Lord Smith of Kelvin, Chairman, Green Investment Bank, commented: “This project is a great example of the wide ranging benefits of renewable energy. It generates power from a sustainable source, reducing the UK’s greenhouse gas emissions. It generates heat for a local business, the iconic Macallan distillery, helping to save it money and reduce its carbon footprint. It supports local landowners who are providing much of the fuel. And it creates and supports local jobs.
“This will be a significant investment in Scotland’s rural economy, creating modern, green infrastructure that will benefit local people as well as the environment.”